FAFSA Explained
FAFSA is the Free Application for Federal Student Aid. This form is a critical element in the college planning process and determines how much money the government is going to give you. It is attached to all of the federal grants but also for other financial aid such as loans, institutional scholarships, and state aid.
Seniors submit it to qualify for any of the financial aid opportunities. The FAFSA asks questions such as dependency status, demographics and financial situations. If all materials are ready, the process can take approximately 30-60 minutes to fill out and submit.
FAFSA Changes (2023)
The FAFSA Simplification Act was included in the Consolidated Appropriations Act of 2021. The changes will be effective starting on July 1, 2023, for the 2023 – 2024 academic year.
The FAFSA application will be shorter and more user-friendly for families. The EFC will change its name to Student Aid Index and referred to as SAI. This redefined system is supposed to streamline what is an unwieldy process and should transform it to properly characterize the eligibility index for distributing financial aid and funding to students.
Who files the FAFSA?
Every student, regardless of income, needs to fill out the FAFSA.ON It will determine how much money the government is going to give you and is a critical element in the college planning process. It is not just for the poor—if you get the knock on the door from Publisher’s Clearing House, receive an inheritance or win the lottery, still apply! Every student is entitled to money, but it is generally on a first-come first-served basis.
Opening date is October 1 of your senior year. Fill it out as close to that date as possible. The FAFSA must be filed every year of college and if attending post grad school. Trade school scholarships can still require a need to fill it out as well.
Ten Schools Listed
Students can initially list ten schools on the FAFSA, but they can add more colleges once the school confirms it has received the information.
There should be a mixture of three-types of colleges listed:
Safety Schools: Colleges where there is probably an 80% chance of getting in. Notate 2-3 of these on your list.
Target Schools: here is probably a 40-60% chance of acceptance with grades and test scores. Notate 4-5 of these on your list.
Reach Schools: Unlikely admittance and a low acceptance rate and/or require high-test scores. Don’t rule them out and notate 2-3 of these schools on your list.
The order of the ten schools you list on the FAFSA does matter. Some states require that you list the state university first in order to be considered for that state’s financial aid when it is that's tied to the FAFSA. Same for university-based aid.
Make sure there is a financial balance represented when comparing schools: Be prudent and keep affordability as one of your most important criteria. Input your info at College Board so you don’t have to re-key it everywhere. If the college isn’t represented on this site, you can either use the NPC net price calculator on the school’s website or search online by typing “NPC + college name.”
What documents are needed?
- Register for FSA ID. (Parent and student.)
- Your prior-prior tax returns. (2020 for current seniors applying in Fall of 2022)
- Parent and student Social Security numbers.
- Driver’s license number.
- Records of taxed and untaxed income.
- Information on cash; savings and checking account balances.
- IRS 1040
- Information on your assets (or those of your parents if you are a dependent student). Includes cash; savings and checking account balances; investments, including stocks and bonds and real estate (do not include your family home); and business and farm assets (check for exemptions).
- List of schools that you want the information sent to. Ten can be listed and one will drop off if you add an eleventh one. See information about changing the list and adding more schools where required.
- Your Alien Registration number if you are not a U.S. citizen.
- Foreign tax return, IRS 1040NR, or IRS 1040NR-EZ.
- Tax return for Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Marshall Islands, the Federated States of Micronesia, or Palau.
FAFSA Mistakes
80% of families make several crucial mistakes on the FAFSA and lose out on financial aid. There are over 60 identified errors made; here are some of the top mistakes:
- Too little--Parents don’t notate information about other students in college or in private school; these can greatly increase their financial aid eligibility
- Too much-They disclose home equity and retirement accounts which counts against them, and this is information is not asked for on the FAFSA.
- Too late-They fill out the documents in April or May when in fact they should have everything prepared and filled out on or near October 1.
- Too quick- Most families hit the start button on the FAFSA without having all their information at hand. This causes stopping and starting, forgetting information, or coding incorrectly.
- Don’t file-They believe they make too much money and won’t qualify so they don’t file at all. No matter what your income is, everyone is eligible for some type of money, whether it is federal government aid(50K) state aid, (100K) or institutional aid. (250K)
Always fill out the pdf worksheet first to make sure everything is correct. It can be like an act of Congress to get it back to edit it once it’s submitted. Triple check the information before ever submitting the actual FAFSA.
Secret College Funding Formula
The secret college funding formula is: COA – EFC = Need: Cost of Attendance (COA) can be discovered using each college’s Net Price Calculator. Estimated Family Contribution (EFC) can be calculated here. Need (not needy) is what colleges determine is the amount they may or not meet to fill in the gap.
Paying for College
The EFC for most families is an unrealistic joke, but families can find affordable, even full rides. Low-income families can look for schools meet 100% of need. Middle-high income households can chase merit by searching the Common Data Set to find schools where the student’s stats (test scores, GPA) are above the seventy-fifth percentile.
Make sure test prep is a priority since colleges use these to level the playing field for all students since each high school weighs and calculates their scores differently. Most students, even smart ones, bomb standardized tests; they are logic-based and not content-based. The questions are purposely misleading, and the wrong answers are tricky and easy to pick.
Every college will take the SAT or ACT, and many are now accepting the CLT. Students can learn to beat these tests which can open up more opportunities for colleges on a student’s FAFSA list.
