It’s FAFSA season for seniors! Guest blogger Todd Kelly of Summit College Funding and College Planning Relief has timely advice to avoid common mistakes.
January is the month that millions of families disclose their financial data to the Department of Education through the Free Application for Federal Student Aid (FAFSA). Specifically, more than 20 million FASFA applications are submitted each year. Anywhere from 70—90% are submitted with errors. An error filled FASFA will likely reduce the amount of aid you might receive. The FAFSA has been called “the gateway to financial aid”. With the ever increasing costs associated with college, it is imperative to eliminate mistakes in completing it. Here are ten ways to reduce the likelihood of your FAFSA containing errors.
1. Failure to Submit because of Income (high or low).
Many believe they make too much to qualify or they make less and think they will get everything covered. Income is one of seven factors to determine aid eligibility…you should always complete the FAFSA regardless of income.
2. Waiting to Submit
A misconception of many is to wait until they have all of their financial documents in place and taxes done before submitting their FAFSA. Since some money is distributed first-come, first-served basis, it is imperative to submit as early in January as possible. Using estimates is expected.
3. Divorce Situations
Whose financial information is used – mom or dad? Wherever the student spends the majority of their time and receives a majority of their support.
4. Understating Income
If you contribute a 401K, 403B, etc. or any other pre-tax retirement account, you must add back any contributions in the previous year to your income for FAFSA purposes. This, in effect, produces a higher FAFSA income than what might be shown on your tax return.
5. Overstating Assets
Many families mistakenly include retirement assets as part of their investments or net worth when in fact retirement assets are not to be included.
6. Real Estate
For FAFSA purposes, primary residence home equity is not included. However, equity in rental property and vacation homes can be included.
7. Misplaced Information
Always remember the FAFSA is written from a student perspective, as if they are the one completing it….which they probably won’t be. When the FAFSA refers to “you” and “yours”, it is in fact referring to the student.
8. Not Submitting Electronically
Online submission provides built-in edit to help prevent errors, is timelier, has an online help feature,
and a much simpler renewal process.
9. Taking Your Time When Answering Questions
Give yourself time to think through the questions and what they are asking. Answering questions a certain way can preclude you from receiving aid or valuable information. The following two questions
highlight this fact. When asked if you are interested in work study, always answer “yes”. It does not mean you will get it nor does it mean you have to take it. But what if the award is a great offer for the hours expected? When it asks for the student’s email address, always put your email address. This
ensures all information communicated to you or your student comes to you to review.
10. Failing to Save as You Go
Every page to two pages, be sure to save your file as you go. You don’t want to get halfway through and find your computer or the government’s server has locked up.
CRITICAL (okay #11): And last but not least, I want to include the one mistake you definitely do not want to make. Please be sure to complete the correct FAFSA application. Remember to complete the FAFSA for the year your student will be in college for the upcoming fall school year, NOT the school year you are currently in. This is a huge, but common mistake. Make this one and your student will receive no aid in the following fall.