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Applying for Financial Aid? The FAFSA Application Explained

April 02 2018 • by Adam DeFrias • Money Management


With the average cost of college continuing to increase, it’s no wonder that many students – and their parents – look to financial aid for some relief. According to the National Center for Education Statistics, a whopping 86 percent of first-time, full-time undergraduate students at 4-year colleges received some type of financial aid during the 2014-2015 school year. Financial aid refers to any form of funding that helps pay for a college education. It can take the form of scholarships, grants, loans, and even work-study programs. If college is on the horizon for you or your child, and you’d like to be considered for some type of financial aid package, you’ll need to fill out a FAFSA form to get the process started.

FAFSA stands for Free Application for Federal Student Aid. It is a form that should be submitted each year by both current college students, and prospective college students – in other words, those students who have applied, or will be applying, to college. The FAFSA application is administered by the U.S. Department of Education, and determines a student’s eligibility for financial assistance.

While financial aid is an obvious benefit to college students, a recent study by Nerdwallet showed that more than one million high school graduates didn’t submit a FAFSA application for the 2016-2017 school year, and the reasons are plentiful. Some students don’t apply for financial aid because they believe their parents make too much money for them to qualify. Others think they’ll be ineligible because they already have some type of education savings account like a 529 plan. What many don’t realize however, is that most college students are eligible for some type of financial aid, even those with college savings plans. Of course, it’s always a good idea to consult with a tax advisor or investment professional before making any major decisions regarding education savings strategies.

So, just what does an applicant need to do to get the ball rolling on a FAFSA application? Well for starters, the FAFSA needs to be submitted annually. It’s free to submit, and the due date will depend on the state you live in, and the school year you’re looking to obtain funds for. To view the deadline for your own particular situation, visit https://fafsa.ed.gov/deadlines.htm. It’s also important to remember that some colleges award financial aid on a “first-come, first-served” basis, so it’s best to submit your FAFSA application as soon as possible. Students can submit their application as early as October 1st each year.

It’s also worth noting that the FAFSA application can be a bit complicated to fill out. That’s why it’s a good idea to get your “ducks in a row” before actually jumping in to complete the form. One thing students should determine before they start the process is whether they are considered a dependent student, or an independent student. A dependent student will need to report both their own information and their parents’ information on the FAFSA, while an independent student will only need to report their own information (and their spouse’s information, if married). To determine whether you qualify as a dependent student, or an independent student, visit https://studentaid.ed.gov/sa/fafsa/filling-out/dependency.

Here is some additional information you should gather before starting in on your FAFSA application:

• Social Security numbers for students and parents, or Alien Registration Numbers for non-U.S. citizens
• Driver’s license or other eligible government ID
• Tax returns for students and/or parents from the previous year
• Asset records such as bank statements and investments
• Records of untaxed income, such as child support
• Federal school codes for the schools you will apply to

If at all possible, you should consider applying online. Your application will be processed faster if you apply online, and it’s likely to be more accurate because the FAFSA website is designed to catch common errors. The site also allows you to skip questions that don’t apply to your situation.

Another benefit of applying online – you can save and continue your application at any time using your FSA ID. An FSA ID consists of a username and password and can be used to log onto the FAFSA website. While you are not required to have an FSA ID to submit your application online, it is highly recommended. An FSA ID also allows you to pre-fill an online application with information from a previous year’s FAFSA.

If you’re applying online, just be sure to do so through the official FAFSA website: https://fafsa.ed.gov/. There are some websites out there that charge a fee to help students file their application. These sites are not affiliated with or endorsed by the U.S. Department of Education. The official FAFSA website will never request your credit card information, or require you to pay a fee to submit your application.

If college is in your future, do yourself a favor and submit a FAFSA application. If you don’t, you could end up leaving money, and opportunity, on the table.