5 Essential Tips for Completing the FAFSA Successfully
Filling out the FAFSA can be a challenging task, much like taxes. However, these helpful tips can simplify the process.
On October 1, 2020, the Free Application for Federal Student Aid (FAFSA) became available for the 2021 academic year at StudentAid.Ed.Gov. If you're looking at college applications soon, getting this done is a must. The top mistake parents make is not filing, according to Mark Kantrowitz, VP of Research at SavingforCollege.com. His analysis from the 2015-2016 application period revealed that 2 million individuals who missed filing could have received some aid through Pell grants, totaling $10 billion left unclaimed. Notably, around 2% of those eligible had six-figure incomes.
If your financial situation has significantly changed since filing your 2019 taxes, remember that FAFSA will consider your pre-pandemic income. After submitting, reach out to your chosen colleges to discuss your financial aid needs. But for now, focus on completing the FAFSA early for a smoother experience that may extend into 2021.
Completing the FAFSA
In the spirit of Nike, just do it! While filling out the FAFSA isn't a carefree task, keeping these five crucial tips in mind can ease the burden.
Utilize the app
Skip the paper version—it's not worth the hassle. The Department of Education has optimized the online application, making it user-friendly. Completing the FAFSA online is free, and this year, there's even a mobile app that's been described as “nicely designed” and “almost fun” by Kantrowitz after reviewing it.
Start early
Students who file their FAFSA within the first three months tend to receive double the grant money compared to those who file later, according to Kantrowitz. This is especially true in states where aid is allocated on a first-come, first-served basis. Some parents worry that applying for aid could affect their child’s admission status, but only about 100 schools are genuinely need-blind. Most do consider financial need, but this rarely influences admissions decisions, except for those on waitlists where funding may already be limited.
Use the IRS data retrieval tool
In past years, verification affected about one-third of FAFSA submissions, requiring additional documentation to confirm income accuracy. By using the IRS data retrieval tool, you can import your tax information directly into the application, reducing the likelihood of verification. However, note that this feature was absent in the app demo, as pointed out by Kelly Peeler, founder of nextgenvest.com, which assists families with financial aid via text messaging.
Prepare your documents beforehand
Before opening your computer, gather all necessary documents—not just your tax returns, but also bank statements and investment records. A complete list can be found here. Having everything ready will expedite the process. Additionally, you’ll need to create two passwords—one for you and one for your child. “Keep them secure and easily accessible,” Peeler advises. Lost passwords are a common reason many students abandon their applications.
Think long-term
Consider that assets can be maneuvered. For example, using cash to pay off a mortgage increases your home equity, which can be beneficial. By shifting reportable FAFSA assets like cash into non-reportable ones such as retirement accounts, you can enhance your eligibility for financial aid. Kantrowitz notes that 200 private colleges do evaluate home equity. In summary, using available cash to reduce debt and contributing to retirement funds can be beneficial both now and in the future.
For more insightful financial information in a supportive environment, feel free to reach out to us at info@thevouchers.co.uk.