Understand The FAFSA
1: The FAFSA Defined
The FAFSA, or Free Application for Federal Student Aid, is the basic application form that is required from any student who wishes to apply for federal financial aid. The FAFSA is the measuring stick for your EFC, or Expected Family Contribution. Video: Do You Know What The Acronym Means?
2: Need-Based Qualification
Your EFC is how much the government believes your family can contribute to your college tuition that year. If your EFC is less than the cost of attendance, you qualify for need-based aid. Many families qualify for need-based aid, but this can only be determined if you fill out the FAFSA.
3: Foregoing Filing for Aid
If you don’t file the FAFSA, you forfeit your chance to receive federal aid. This can mean leaving thousands of dollars in low-interest, potentially subsidized, federal loans on the table. Most colleges and universities also require the FAFSA to determine your eligibility for their own grants and scholarships.
4: Initial Submission Process
Federal aid is limited and awarded on a first-come, first-served basis, so applying early is recommended. If an applicant has already submitted a FAFSA, that applicant can still submit a FAFSA for renewal or alteration to the previous information given. After review by a federal processor, the student will receive a Student Aid Report that summarizes the information provided on the FAFSA. If there are no errors, an electronic version is sent to the schools the student selected on the FAFSA.
Eligibility Criteria for FAFSA and Financial Aid:
- Be a U.S. citizen, or an eligible non-citizen with a valid Social Security number.
- Have a high school diploma or GED
- Should be registered with the U.S. Selective Service if they are a male ages 18-25.
- Promise through FAFSA that the financial aid will be used for educational purposes only.
- Not be in default on any student loan or owe any money for any federal grants.
- Not be found guilty of possession or selling illegal drugs while being a recipient of federal financial aid.
The most commonly sought after financial aids through FAFSA are Pell Grants, Perkins Loans, Subsidized and Unsubsidized Stafford loans, and the Federal Work-Study program in which the students can work part-time and have 75% of their payments refunded by the government.
A FAFSA provides a snapshot of a family’s ability to cover the costs associated with higher education. Not surprisingly, then, there’s a significant amount of paperwork involved, and families have a lot of data to gather, such as:
- Social Security numbers for the students and parents
- Driver’s license number if applicable
- Alien Registration Number for student, if applicable
- Federal tax returns or tax information for students
- Federal tax returns for spouses, if students are married OR returns for parents, if students are dependent
- Records of income not subject to taxation, like child support or veterans non-educational benefits.
- Bank balances, including checking and savings accounts
- Investment information
The FAFSA can be a complicated form, and it’s imperative for students to go slowly and deliberately. Setting aside the proper amount of time can help. Typically, families who prepare to spend a half hour on form completion will have more than enough time. The average amount of time needed is 22 minutes.
Options for Filing
Many important functions that were once completed with pen and paper are now done electronically. The U.S. Department of Education has joined this trend, and as a result, the FAFSA is available online.
Filling out the form this way can be beneficial, as it can provide students with:
- A faster turnaround time
- Automatic error correction
- Online help
- Ease of use
- Income estimation tools, in case taxes aren’t done yet
- Retrieval tools that can pull info directly from the IRS
1 in 5 households in 2013 had no internet access according to the United States Census Bureau. Thankfully, lots of colleges and universities computers available in their financial aid offices, so students can fill out the FAFSA online, regardless of whether or not they have computers at home. This is a better option than using a public computer with unsecured access to the Internet, especially since you need to provide a great deal of confidential information when completing the FAFSA.
Avoiding Common Problems
As mentioned, the FAFSA is a difficult form, and not surprisingly, some students fail to get things right, much as they might try to do so.
- The value of the home the family lives in
- Life insurance plan values
- Amounts held in retirement accounts, such as 401k plans, IRAs or pension funds
- Amounts held in Keogh plans
While most individuals submit their FAFSAs with no errors, 22% of submissions contain some type of error.
Families that own a small business are required to state the value of that business, but those small businesses with fewer than 100 employees might be exempt from this rule altogether. Reading the rules carefully will be vital for students that come from families like this.
- Forget to sign the document
- Omit their Social Security numbers
- Leave themselves out of the number of people living in the household
- Leave some items blank
These are silly-seeming mistakes, but they can have a big impact on a student’s ability to get needed funding. Checking the paper form, and then checking it again, is the best way to prevent these errors. Luckily, many of these errors can be avoided by completing the electronic form which will prevents families from proceeding and/or submitting the form.
A similar number of students might hate working with the FAFSA, especially since they’re expected to work with the form each and every year that they attend school. But if students hate the form because it’s time consuming and confusing, there are educational resources that can help. In fact, the U.S. Department of Education suggests that students in trouble can:
- Click on the “Help and Hints” button sitting next to each question in the online form.
- Click on the “Need Help?” button sitting at the bottom of the online form.
- Click on the “Help” item on the FAFSA website, and chat in real time with an expert.
- Schedule a meeting with an advisor in the financial aid office of the institution the student has chosen.
It might be a hassle, even though it doesn’t take all that long to complete, but you only have to do it once a year, which isn’t so bad. Plus, once you actually submit the FAFSA, you’ll be (hopefully) well on the way to getting a much-needed financial aid award.
- FAFSA Home
- Deadlines for Filing
- Demystifying the FAFSA
- FAFSA Season and the Financial Aid Reality Check
- Exit Counseling
- Filling it out for the Self-Employed
- Financial Stability
- How the FAFSA Challenged Us to Find Alternative Funding
- How to Determine Independent or Dependent Student Status
- Making Corrections
- Requirements for Filing
- Revising: A Primer for Parents
- The Calculations Behind the Application
- The FAFSA: That Wasn’t So Bad After All
- The FAFSA: Your gateway to financial aid
- Tips on Filing the Free Application for Federal Student Aid (FAFSA)
- To-Do Lists, Anxiety, and Preparing for College
- What Happens After the FAFSA?
- Why Submit the FAFSA?
- You filed the application, but do you know what it stands for?
EFC stands for Estimated Family Contribution, which plays an important role when applying for federal financial aid. The formula by which federal aid is awarded includes estimated family contributions toward the cost of attendance. Dependent students are required to include their parent’s W2 and income tax information. And if the student is applying as an independent, they need to include their own financial information.
Is there a FAFSA deadline for my application?
Yes, there are deadlines for FAFSA applications for each state and college.You can submit the FAFSA every year, and you must continually renew it. To get more information about the FAFSA deadline, visit fafsa.ed.gov.
Can you tell me about FAFSA student loans?
Students who need to apply for financial assistance have to fill out the Free Application for Federal Student Aid (FAFSA). This form allows the government to calculate the amount of a student’s financial need based on the information provided.
Should I apply for FAFSA financial aid even if I think I am not eligible?
If you think that your family income is too high for you to be considered for financial assistance then you should apply anyways. There are plenty of assistance packages and you may be eligible for some of them regardless of your family income. You should fill out the Free Application for Federal Student Aid (FAFAA) and see what assistance programs you qualify for.
What is the procedure for FAFSA renewal?
The Free Application for Federal Student Aid (FAFSA) must be renewed each year. Even if your financial information has not changed, all applicants for financial aid are required to participate in FAFSA renewal. The FAFSA renewal application has to be resubmitted each year so the authorities can access the financial condition and decide the amount to the awarded to the applicant after an entire year.
What are FAFSA school codes?
FAFSA school codes are codes given to every college or university where enrolled students can receive financial aid. To streamline the system, the United States Department of Education has given code numbers to all schools and colleges. Students should supply the FAFSA school codes for each institution they are applying to or for the institution they are enrolled in to ensure proper delivery of their information.
How do I check my FAFSA status?
In order to find your Free Application for Federal Student Aid (FAFSA) status, you need to login to your online account at the United States Department of Education, the same site where you submitted your online FAFSA. You can check the status of your application at any time after you have submitted it. The amount of federal aid awarded depends on the student’s need for finances, and this is determined from the information on your FAFSA. Students can look for other funding options if the awarded federal aid does not satisfy their need.