The high cost of attending college today makes financial aid unavoidable for most students. This means dealing with the lengthy and often complicated Free Application for Federal Student Aid, commonly known as the FAFSA.
The form can be confusing- so much so that each year about 25% abandon the application mid-process, leaving any aid unclaimed. The form is written in a slightly counterintuitive way- it is to be filled out by the student rather than the parent or guardian. And there are many parts to the application. There is good news. There is a bipartisan agreement in Congress that the process must be simplified. And last year, FAFSA was made available earlier, and with more-accessible tax information.
But in the meantime, the form continues to confuse, especially for those with limited means. Often families don’t have simple answers to questions about their household income.
Here are some guidelines to the basics:
- Who qualifies to Apply? Any citizen or individual with a Social Security number. Plenty of students who are not citizens are still eligible. Refugees, permanent residents with green cards and conditional residents can apply using their alien registration numbers. DACA students should also fill out FAFSA because they can receive aid from some states and schools even if they don’t qualify for federal aid. Information is not shared with Immigration.
- Decided on college, Undecided where? Students are often confused that FAFSA asks what schools they are applying to and that the form requires them to declare their intended major degree. Because it is early in the process, you may not know where you are headed in the fall or what you will study. Don’t leave those sections blank. What you enter on the form won’t determine where you go or what you study, but the FAFSA cannot be submitted without it. If you are undecided on a college, just put down 4 colleges you are going to or have applied to and include at least one state school. You can always change schools after you submit.
- Counting heads. When FAFSA asks you about your household size, it’s not asking how many relatives you have. The only people that should be counted are those you personally, as a student, financially support. This may include children, half-siblings, and parents. If you are under 24 and a dependent student, the only people you should include in your household are those your parents financially support.
- Who is my primary parent? For FAFSA, a legal parent is defined as a biological or legally adoptive parent. This does not include legal guardians like grandparents, aunt or uncles or older siblings, even if they claim you on their taxes. Additionally, if your parents are divorced and have close to equal custody, always indicate the parent with the least amount of income as the primary custodial parent.
- More money, more problems. Even if your parents are extremely wealthy, but you are estranged or otherwise disconnected from them, you still qualify for aid. As long as you can prove that you are not receiving financial assistance from your parents and are under the age of 24, you can file as an independent student.
- Down to the last cent. It will seem like you have to account for every last cent when filling out FAFSA. You will be asked for your current bank balance. To answer, check your bank account the day before payday: you should indicate the dollar amount that is in your checking and savings accounts on your most strapped day of the month.
- Got assets? Not all of what you consider assets are supposed to be reported on the FAFSA. The home you live in with your family, if your family owns it, doesn’t count as an asset on FAFSA. A small family business your parents own doesn’t count as an asset. The 401K your parents saved for is not considered an investment for FAFSA. There are some assets that are considered- income from alimony, for example. By and large, only account for assets that are liquid and cash-based.
College Savings plans do count as assets. If you have a 529 college savings or Coverdell ESA plan, it is best to have it in your parent’s or grandparent’s name. When a student owns the 529, the plan is counted as student income and the eligibility for aid is lowered.
- ABCD….EFC. Declare any household income in your parents’ name. What you will be expected to pay out-of-pocket, your Expected Family Contribution (EFC), will be calculated using a complicated 36 page formula that uses information for your FAFSA forms. Your EFC could change depending on the number of people in your family, your length of residency in the state you live in , or any life-changing events for you or your parents, like a divorce or job loss.
Because of this multi-variable approach to determining aid, you don’t have to settle for the first financial aid package you are offered. If you think it is too low, you can and should appeal for more money. There is often more money available and is usually allocated to those families who appeal. If you need it, why shouldn’t it go to you?