If you’re the parent of one of the 20 million high school seniors or college students applying for federal financial aid, navigating the Free Application for Federal Student Aid (FAFSA®) can be an intimidating process.
For example, to complete the FAFSA, one needs to answer more than 100 questions, ranging from your family’s financial situation to how many of your children are in college.
Then, factor in that everyone applying is vying for a piece of the $150 billion set aside by the U.S. Department of Education, and it’s easy to see how both students and parents can feel uneasy.
“Applying for student aid is competitive,” Carl Buck, former Director of Financial Aid and senior consultant with Discover Student Loans said. “It's all about timing, which means applying January 1 or soon thereafter.”
However, not all parents – let alone students – are experts in filling out the FAFSA; mistakes can happen. Luckily, these trip-ups may be avoidable. According to Jodi Okun, founder of College Financial Aid Advisors (and Discover Student Loans Brand Ambassador), parents should “break the information down to the basics” when filling out the application.
Here are five common mistakes parents might make when completing the FAFSA and tips on how to avoid them.
Skipping the FAFSA altogether
Many think that family income dictates whether an applicant is eligible for some form of federal aid. This is not true.
“There is no income that is too high to file a FAFSA,” Buck said.
Completing a FAFSA is necessary to be considered for most types of financial aid regardless of financial need, including grants, scholarships, work-study and federal loans. If you also plan on taking out a Parent PLUS Loan for your child’s education, filling out the FAFSA is required.
Filling out the correct FAFSA
Your child may be currently enrolled for the 2015–2016 school year; however, you don’t want to fill out the FAFSA for it. When you’re applying for financial aid, it’s for the year ahead. Make sure to double-check you’re selecting the application for the 2016–2017 school year.
Otherwise, even if you’ve provided all the correct information but on the wrong application, you won’t receive any aid.
Okun added that some parents might fill out the wrong application because they’re trying to submit too early. “While it’s tempting to get a head start, just keep in mind that January is the earliest you can submit a FAFSA for the upcoming school year,” Okun said.
However, 2016 is unique because it will have two FAFSAs. The FAFSA for the 2017–2018 school year will be available in October 2016. The government made this change so you can use the tax information from two years prior. For example, in October 2016, you will use your 2015 tax return for estimating your income. This change should make it easier for families to complete the FAFSA each year they have a student in college.
Waiting too long to file your FAFSA
Don’t let the federal deadline of June 30, 2017 for filing your FAFSA lull you into procrastination. Many of the individual state deadlines note that it’s best to apply as early as possible. This applies to federal aid, too, which schools give out on a first come, first served basis.
It may also be tempting to wait to submit your FAFSA until you’ve filed your taxes, but this could affect your student’s financial aid award. Buck says don’t wait – you should submit your FAFSA as quickly as possible with estimated figures and then go back and make updates once your 2015 taxes have been filed.
“All you have to do is take a look at your income from a couple of years ago and do your best estimate,” he advises.
Additionally, for the purposes of your FAFSA, your income may be higher than what appears on your tax return. Any pre-tax contributions to a retirement fund need to be included in your income, not in your assets. Make sure to carefully review any contributions and assets to ensure that you are correctly reporting them.
Inaccurately reporting information for a stepparent
If you are the custodial parent and have remarried, stepparents are required to provide their information on the FAFSA, as well. If your child doesn’t live in your home, make sure to carefully read through theguidelines on providing information. If incorrectly filled out, your Expected Family Contribution (EFC) could negatively impact your financial aid prospects. The Department of Education defines EFC as “a measure of your family’s financial strength and is calculated according to a formula established by law.” (Schools use the EFC to determine student aid eligibility and financial aid award.)
Forgetting to double-check your information
Mistakes as small as putting information in the wrong box can affect your student’s eligibility. Double or triple checking your entries before submitting the application is advised.
Buck explained that he recently advised a parent who accidentally reported her income as her daughter’s; as a result, the EFC was incorrect, and the student wasn’t considered for a Federal Pell Grant.
Sites likeCollegeCovered.com (brought to you by Discover Student Loans) can help students and families by providing tips and guidance to help complete the FAFSA.