Both new and returning college students should complete a FAFSA to qualify for federal, state and school-based financial aid. Even if you think your family’s income disqualifies you from monetary help, it is still a good idea to submit the application.
For college students seeking financial aid for the 2016-17 academic year, January is the time to fill out the Free Application for Federal Student Aid, otherwise known as the FAFSA.
You don’t have to say the acronym three times fast to maximize aid with the FAFSA. But you’ll want to consider these pointers.
• Who should apply: Both new and returning college students should complete a FAFSA to qualify for federal, state and school-based financial aid. Even if you think your family’s income disqualifies you from monetary help, it is still a good idea to submit the application.
First, you need to complete the FAFSA to apply for federal student loans.
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Second, by filing a FAFSA you give yourself the ability to appeal to a college’s financial-aid office, especially if your financial situation changes later in the year.
“The biggest mistake families make is not filling out the FAFSA,” said Jodi Okun, founder of College Financial Aid Advisors, which helps guide families through the financial-aid process. “You should keep all your doors open.”
• When to file: Most colleges and universities want completed FAFSAs by February or early March. Check with your school’s financial-aid office for specific dates.
But the sooner you complete the application the better. That’s because some funds are distributed out on a first-come, first-served basis. Once the money runs out, you are out of luck.
“You want to get in line as soon as possible,” said Rick Castellano, a spokesman for Sallie Mae, a private student-loan lender.
• How to do it: You can complete the FAFSA for free at fafsa.gov. (Avoid any sites or services that charge you to fill out an application.)
Before getting started, Okun suggested signing up for an FSA ID, which students and parents will need to complete and electronically sign the FAFSA. To do so, go to fsaid.ed.gov.
The FSA ID was introduced last May and replaces the four-digit personal identification number once used to complete a FAFSA.
Okun also said families should gather key documents, such as bank and investment statements, as well as their 2015 tax return.
If you haven’t filed your 2015 return yet, don’t sweat it. You can complete the FAFSA using an estimated number (based on, say, your 2014 return) and then adjust the figure on the FAFSA later.
This will be the last year that families will have to make estimates.
Starting Oct. 1, students can complete the FAFSA for the 2017-18 academic year (rather than having to wait until Jan. 1) and use data from their 2015 tax returns. (And for every year thereafter, students will continue to fill out the FAFSA using “prior, prior-year” tax returns. So, for the 2018-19 school year, 2016 tax returns will be used.)
“It streamlines it quite a bit for families,” said Kathy Ruby, director of college finance for College Coach, a college-admissions consulting firm.
For this year, though, Ruby said families shouldn’t delay submitting the FAFSA just because they haven’t filed a tax return.
“It’s always better to do your FAFSA on time with a good estimate rather than do it one day late with the actual number,” she said.
• Mistakes to avoid: Carefully read the instructions about what financial information you have to include on your FAFSA.
For example, money held in retirement accounts, such as a 401(k) or IRA, should not be included in your assets. However, contributions that you made toward retirement last year are considered taxable income.
“I see that cause a lot of confusion for families,” Ruby said.
Finally, nearly 300 colleges and universities award grants and scholarships through another application known as the CSS/Financial Aid Profile. Don’t miss out on these funds. To see if your school accepts Profile, go to student.collegeboard.org. A fee of $25 or $16 applies, depending on how many applications you submit.