If you have a high school junior, you have probably begun worrying about how to fill out the FAFSA. As a single mother getting ready to send her high school senior off to college this fall, I assure you it can be done.
You don’t need to be afraid, although you’ll need to set aside some time. But honestly, with the kind of buildup the FAFSA gets, I thought it would be worse than it was.
FAFSA stands for Free Application for Federal Student Aid. Enjoy the “free” part of this — you won’t get much of that with the college experience. It starts out with the fees you have to pay the College Board to take AP tests and continues with SAT and ACT test fees, then college application fees.
While it’s important to fill out the FAFSA with care, it’s really not as difficult as you might imagine. Get the basic information you need first. Besides knowing when to fill out the FAFSA for fall 2018-2019 you will need documentation related to your income. We’ve broken the process down into 4 steps..
1. Don’t panic. If your child’s high school forced you to complete the Naviance survey, that was much worse. What makes the FAFSA better is that there is an answer to each question and no one asks you to interpret anything. With the FAFSA, there is also a sort of reversal in the laws of the universe — the less money you have, the happier you feel filling it out.
People say if you make less than $60K, you don’t have to pay for anything for college and if you make more than $60K, you have to pay for all of it. This isn’t exactly true, but there’s some truth to it. If you make a lot of money, you will likely have to pay for a big portion of college costs.
2. Dig up your tax returns. The most important document for filling out the FAFSA is your tax return. What a lot of people don’t realize and can be critical information is that you submit your return from two years ago, not the previous year. So if your child will start college in the 2018-2019 school year, you will submit your 2016 tax return, not your 2017 return.
If you’ve been working at the same job for many years, this will mean little to you. But if you have changed jobs, if you’re self-employed and have fluctuating income or you lost your job, this rule can deal a catastrophic blow. What if, for instance, you were making $150K in 2016 but then your company went bankrupt and laid you off and now you’re making $55K while looking for a better job?
What if you own a business and 2016 was a great year, but 2017 started a downward trend? You might be out of luck. FAFSA calculates an “expected family financial contribution” and forwards it to every college your child applies to.
However, new FAFSA rules allow you to note if you have been laid off from your job or if you have debt due to medical bills, and colleges may award you more aid based on this. Also, once your child has gotten accepted to college, there is sometimes an appeal process available if your FAFSA doesn’t reflect the amount you can pay.
On the other hand, some crafty types who know about the two-years-ago rule work hard to make less income in their first FAFSA year, and thereby qualify for more aid.
Now that you know what tax year you’ll be dealing with, make electronic copies of your return to submit.
If, like me, you are divorced, your child may need their other parent to upload copies of their returns as well. (They can do this on their own, privately, so you can’t see them.) Most public colleges do not count the noncustodial parent’s income when calculating financial aid awards. Also, some divorces include provisions that each parent must pay a certain percentage of their children’s college costs, but this depends on what is included in your agreement or judgment.
If your child worked that year, you will also need to upload his tax returns, or if he didn’t file any his W2 can be used.
3. Collect other pertinent financial information. FAFSA will ask you how much money you (and your child) have in the bank, how much is in your retirement accounts (if you have any), how much your house is worth and how much you have in investments. Many of these figures are dependent on the stock market and the economy and can change daily, so you’ll need to check each one while filling out the FAFSA. You are not expected to sell your house or liquidate your retirement account, but they still want to know how much you have. Don’t lie. If they find out, you will be humiliated, fined, possibly jailed and forced to pay back any money they gave you.
4. Set aside a chunk of time. The FAFSA will also ask you tons of questions like whether your child is married or divorced or has a child of their own; if your family received child support, food stamps or welfare payments; whether your child is a legal U.S. resident; what type of degree they are seeking; and literally about 100 other questions.
One way to make the task more approachable is to understand that it likely cannot be completed all at once. You are allowed to save your FAFSA application and come back later to make changes and additions. Go through it the first time and fill out everything you can and make notes on what other information you need to get.
Do not procrastinate on getting the info and finishing the application! Colleges award financial aid on a first-come, first-served basis (to those who are qualified) and if you’re late to the party, everyone will have taken the cake and you will only get crumbs.
Applying to so-called “reach schools” can be especially important if your child is ivy-league material. These schools have such vast endowments and many kids of families earning less than a quarter-mil a year get free rides.
While the FAFSA determines your expected family financial contribution, how much aid your child is awarded depends on more than just your FAFSA documentation. Merit aid, for example, is a financial award based on merit only, not on how much money your family makes. Your child’s chances of receiving merit aid are higher at a school where their test scores and GPA are higher than average.
Learn More About How to Fill Out the FAFSA for 2018-2019
If your child’s school holds informational sessions about how to fill out the FAFSA, try to attend these. You will get critically important information — such as the earliest date you are allowed to submit your FAFSA — and learn about any changes that have taken place since the previous year. FAFSA deadlines vary depending on the state you live in; check yours here.
You’ll also learn about the CSS Profile (College Scholarship Service) and when you need to submit that. Also, this one isn’t free, although some may qualify for a fee waiver.
How to Interpret Your Aid Award
When your child gets a financial aid offer from a school, look at it carefully. Sometimes it is a grant, which doesn’t need to be paid back, but sometimes it’s a loan.
If the cost for a year of in-state college is $25,000 and your financial aid award is $20,000, you may need to take out a loan to pay the $5,000 balance. This doesn’t seem so bad, but if $10,000 of your financial aid award is a loan that needs to be paid back, then your child will graduate with about $60,000 of debt.
It’s important to look at the offer not just to see what you can afford, but to compare it to offers from other schools that might give more in grant money and less in loans.
Other portions of your child’s financial aid package might include scholarships, which are free money, and work-study, which is an on-campus job that guarantees the student a certain income.
There is no big secret to how to fill out the FAFSA — you just have to do it.