January 5, 2015
What You Should Know about FAFSA
The new school year is right around the corner. If you’re preparing to head to college, one important task you’ll have to attend to is filling out the FAFSA, also known as the Free Application for Federal Student Aid. It is important to properly fill out this form since it can help you with your efforts to receive financial assistance. It also determines your eligibility for all federal student aid, including scholarships, loans, grants, and work-study.
Dr. Frank Mussano and Dr. Robert iosue, authors of College Tuition: Four Decades of Financial Deception, offer this list of what parents should know about the FAFSA.
Don’t count yourself out. There is no income cut-off for federal financial aid. Many factors are considered in the needs analysis formula in addition to income. The bottom line is that students should not assume they are not eligible for financial aid.
There are many ways to complete the FAFSA. The FASFA can be completed via paper application or online, but the online application is recommended because it offers many advantages. The FASFA must be resubmitted every academic year.
Know the best time to complete the FAFSA. Although tax information from the previous year is required to complete the form, FASFA allows applicants to estimate information and correct it after taxes are finalized. It is best to fill out the FASFA as soon as possible after January 1 of the year the student plans to enter college.
Know what information is needed to complete the FAFSA. Collect the necessary financial records prior to sitting down to fill out the FASFA. You should have:
- The most recent year’s tax forms or end-of-year pay stubs
- W-2 forms and other records of money earned
- Records of the most recent untaxed income from agencies such as welfare, veteran benefits, Social Security, etc.
- Current bank statements and records of stocks, bonds, mutual funds and other investments
- Current mortgage information (FASFA does not assess home equity or personal assets)
- Student’s driver’s license and Social Security number
- At least one, and up to 10, federal school codes for colleges the student is interested in attending (available via the school’s financial aid offices)
Know how assets in the FAFSA needs analysis formula can be minimized. Under current federal financial aid formulas, all assets of the student are assessed at a 20% rate while parents are assessed at a maximum rate of 5.65%.
You can call the Federal Student Aid Information Center with questions about the online or paper FASFA application process at 1-800-433-3243.