What is FAFSA?
FAFSA is an application for government financial aid.
The application gives colleges and the government a simple look at how much your family is expected to contribute to your education.
You tell them what you can afford and they help you out with the rest.
More than $150 billion in grants, work-study funds, and loans are given out each year as a result of FAFSA applications.
One of the main purposes of the FAFSA is to calculate your estimated family contribution (EFC). Your EFC is the amount you and your family will be expected to pay for college – it is used determine the amount of federal student aid you are eligible to receive. The results of the FAFSA are used for:
- Student grants
- Loan amounts
The average student loan debt is around $30,000, and graduating from college with this burden is a hard way to begin your adult life. Filling out the FAFSA is a must if you want to qualify for need-based aid.
A common misconception that some people falsely believe in is that they’re too rich for the FAFSA. This is not true at all. Even though you may not get a lot of aid, most people get varied amounts of money and government loans without interest. Also, some private colleges use the EFC to give students their university-specific aid amount.
Calculator: Who wants to be a millionaire?
When should I fill it out?
The application opens on October 1st.
How long does it take to fill out?
Approximately: 1 to 5 hours
You can find your state’s deadline here, but check with your college for its deadlines to make sure. A common mistake is to wait until your acceptance letter to start filling out the FAFSA – don’t do this! Some colleges give out money on a rolling basis, so it’s best to turn in the FAFSA early. And remember that you have to fill out the FAFSA every year that you are in a postsecondary institution.
How do I fill it out?
Before you start filling out the FAFSA, make sure you have the following available:
- Your Social Security Number
- Your Alien Registration Number (if you aren’t a U.S. citizen)
- Your most recent federal income tax returns, W-2s, and other records of money earned
- Bank statements and records of investments
- Records of untaxed income
- An FSA ID
If you are a dependent student, you’ll also need information from your parents as well.
A breakdown of FAFSA
There are five sections to the FAFSA that you must complete.
- Student Demographic Information – basic information like your date of birth, mailing address, e-mail address, social security number, etc.
- School Selection – the schools that you want to send the FAFSA to with ten as the limit
- Dependency Status – eleven questions that determine if you are a dependent student (scroll over: one who will report his or her parents’ financial information)
- Parent Demographics – basic information about your family such as household size and number of family members in college
- Financial Information – longest part of the FAFSA with information from your 1040A, tax forms, and deductions; if eligible you can use the IRS Data Retrieval Tool here
You can qualify to use the IRS Data Retrieval Tool if your family income tax returns were:
- Filed electronically at least two weeks before you complete the FAFSA
- Mailed to the IRS at least eight weeks before you complete the FAFSA
This tool saves you time and effort by transferring your income tax data directly from the IRS to your online FAFSA.
After you submit the FAFSA, your family’s financial information is organized using the federal need formula. You will receive a Student Aid Report (SAR) by email.
Make sure that you review the SAR for errors and make a copy for your records. The SAR will also tell you your EFC, which will be sent to your state scholarship agency and the colleges that you selected on the FAFSA. It is important to note that some colleges also require the CSS Financial Profile – check your colleges’ requirements.
President Obama has announced an easier and earlier FAFSA. Starting for the 2017-2018 school year, students can:
- Submit their FAFSA starting on October 1st, instead of January 1st
- Report income tax information from an earlier year – for example, for the 2017-2018 school year, students can report tax information from 2015
Due to these changes, students will be able to know their aid amount before they commit to a college!
- Schools ask families to verify information on FAFSA forms, meaning that you’ll be requested to mail actual tax and other documents to the school.
- Consumer debt doesn’t enter into the equation for the EFC, but savings do.
- Retirement accounts don’t factor into the FAFSA, so don’t include 401(k), IRA or other such funds among your assets. They hurt your chances for aid.
- Although private colleges may seem more expensive, they might also offer more aid than public colleges.
- In unusual circumstances, a student can appeal their case to a financial aid office.
- Over $135 billion in financial aid is available to students and their families.
- Nearly a third of eligible students miss out on millions of dollars in education benefits through tax breaks.
- The Seinfeld Scholarship Program was established by Jerry Seinfeld and gives $40,000 to NYC residents.
- The National Candy Technologists Scholarship gives $5000 to students who have demonstrated an interest in confectionary technology.
- The Chick Evans Caddie Scholarship is a full tuition and housing college scholarship for golf caddies.
- The Kor Memorial Scholarship recognizes students with interests in different languages – including Klingon.
As Michelle Obama states in her rap video, You Should Go To College – filling out the FAFSA is a huge step in right direction.
Don’t delay – fill out your FAFSA today!
FAFSA glossary of terms
Cost of Attendance (COA) – total amount it will cost you to go to school
Expected Family Contribution (EFC) – used to determine your eligibility for federal student aid; results from the financial information you provide in your FAFSA
Federal Pell Grant – federal grant for undergraduates with financial need
Federal Perkins Loan – federal student loan, made by the recipient’s school, for undergraduate and graduate students who demonstrate financial need
Federal Student Aid Pin – electronic personal identification number that served as a student’s or parent’s identifier; hasn’t been used since May 2015
Federal Work-Study – federal student aid program that provides part-time employment while you are enrolled in school to help pay your education expenses
FSA ID – username and password combination that serves as a student or parent’s identifier to allow access to personal information; replaced the pin
Grant – financial aid, often based on financial need, that does not need to be repaid
Student Aid Report (SAR) – summary of the information you submitted on your FAFSA