It’s hard to have a conversation about higher education without broaching the topic of money.
And rightfully so. Why? Because college is expensive.
According to College Board data, tuition at a public, in-state school now costs an average of $,9,410 per year. One year of tuition at a public, four-year out-of-state school, on the other hand, costs approximately $23,893. Tack on changing majors, attending graduate school, transferring colleges, and dropping a class here and there, and the amount you’ll pay for higher education will grow fast.
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Fortunately, there are steps to make these costs more bearable. One of the most important things you can do to help pay for college is to fill out the FAFSA. The U.S. Department of Education awards $150 billion per year in grants, work-study funds, and low-interest loans to more than 15 million students, and filling out that form is the only way to get a piece of the pie.
Whether or not you’ve heard of the FAFSA, it could seem a little daunting. Before you start, here is our guide to filling it out:
What is the FAFSA?
FAFSA stands for the Free Application for Federal Student Aid. This is the form you need to fill out to determine what type of federal aid you qualify for.
This aid includes federal loans, which have all sorts of benefits over private loans: income-based repayment plans; generally a lower interest rate; the possibility of the government paying the interest when you’re in school or other deferments; and even the possibility of these loans being forgiven.
Besides loans, this is also your chance to qualify for federal grants — money you do not need to repay unless you withdraw from school — and work-study, in which you earn money through your school.
But this isn’t just about federal aid. The FAFSA could also determine what type of aid you’ll receive from your school or from your state government. In some instances, you aren’t eligible for private scholarships unless you’re eligible for the Federal Pell Grant, which the FAFSA will determine.
Regardless of your or your parents’ income, you should always fill out the FAFSA. Those who fail to fill it out because they think they earn too much are often proved wrong.
Filling Out the FAFSA
When Should I Fill Out the FAFSA?
Where students once had to wait until January 1st to fill out their FAFSA form, President Obama recently announced changes that will let students submit their form as early as October 1st. Starting in 2016, for example, a student who plans to attend college July 1, 2017 to June 30, 2018 can fill out a FAFSA form any time between October 1, 2016 and June 30, 2018.
And this isn’t a one-and-done thing. You need to fill out the FAFSA every year you’re in school to remain eligible for aid.
What You’ll Need
You’re going to need to gather a bunch of information and documents before you get started, and there are a few things you need to figure out.
Before you start, double-check that your anticipated college as well as the Department of Education have your correct e-mail and mailing addresses. This will ensure you’re getting updates on your FAFSA processing.
You’ll need to determine whether you’re a dependent or independent student. If you’re a dependent, you’ll need to gather your parents’ information as well.
You’ll also want to check out this list of questions to determine whether you’re independent or not. Factors include your marital status, whether you’re working on a master’s or doctorate program, if you’re a veteran or currently serving, if you have children who receive half their support from you, if you were ever in foster care, an emancipated minor, homeless, or if you’re a certain age.
If you’re considered a dependent, you will need to provide your parents’ financial information — even if you don’t live with them. As the U.S. Department of Education reports, students will be required to report income information from an earlier tax year than in the past starting in late 2016. “For example, on the 2017–18 FAFSA, students (and parents, as appropriate) will report their 2015 income information, rather than their 2016 income information,” they write on their website.
For some, getting parental information could be tricky. Fortunately, the Department of Education offers guidance on what to do in situations where your parents are divorced, if you have a step-parent, if your parents are unwilling to provide you with their information o you’re unable to get it for whatever reason, if you live with someone other than your parents, or if your parents are in a same-sex marriage.
Here are the other documents and information you need:
Here’s What You Need to Fill Out a FAFSA Form
- Your PIN
- A password
- Social Security Number
- Driver’s license number
- Your federal tax information
- Your parent’s federal tax information
- All your income and financial information
Your PIN. This is (generally) a four-digit number that’s used to access your personal information and legally sign documents electronically. When you apply for your PIN, it’s conditional and will need to be verified with the Social Security Administration. It generally takes one to three days for this, but you can still sign your FAFSA (and nothing else) with the conditional PIN.
If you forgot your PIN, visit the Department of Education’s website to request a duplicate PIN. If your PIN was stolen or lost, you can disable or change your PIN. Keep in mind your PIN can expire if you don’t use it for 18 months. (Note that the Department of Education recommends never giving your PIN to anyone, even someone who is helping you fill out the FAFSA. This could put you in danger of identity theft.)
A password. When you fill out the FAFSA, you’re also going to need a password. You’ll use this if you need to save your FAFSA while you’re working on it and go back to it later or if you need to make changes.
Your Social Security number. If you’re a dependent, you’ll need your parent’s Social Security number.
Your driver’s license number.
If you aren’t a U.S. citizen, you’ll need your Alien Registration Number.
If you’re a dependent, you’ll need your parents’ federal tax information for the previous year. Note that if you or your parents haven’t filed taxes yet, it’s OK to estimate the amounts based on last year’s tax return. After filing, you’re required to go back to FAFSA and correct any information you estimated that was wrong.
If you’re independent, you’ll need your own federal tax information.
Amount of any untaxed income for you (and your parents if you’re dependent) such as interest income, child support, and veterans benefits.
Amount you have in cash, your checking account, and savings account. (If you’re a dependent, you’ll need this information for your parents’ accounts.)
Amount in stocks, bonds, real estate (not the home you live in), and any business assets of yours (or your parents if you’re a dependent).
You’ll also need to specify at least one college that you want to receive this information. If you’re reapplying for federal aid, simply put the college you attend. But if you’re thinking about transferring or not sure what school you’ll attend, you can send to multiple schools (up to 10, or four if you’re filing a paper application). The Department of Education recommends listing state schools first to be considered for state aid. This doesn’t matter for federal aid.
Now you’re ready to fill out the FAFSA by visiting FAFSA.gov. If you need to, you can also order a paper FAFSA or download the .pdf of the FAFSA and print it out. If you have trouble filling it out, contact your college’s financial aid office for questions or further assistance.
What Do I Do After I Fill Out the FAFSA?
So you gathered your documents, worked with your parents, took the (estimated) 45 minutes to fill out the FAFSA, and hit submit. What’s next? That isn’t the end of the rainbow when it comes to getting your money, so listen up:
You can check whether your FAFSA has been processed by visiting FAFSA.gov.
After it’s processed, which takes from three days to three weeks, you’ll be sent an SAR (Student Aid Report), which is the summary of everything you submitted on the FAFSA. Look it over to verify there are no mistakes. If you made a mistake, follow these instructions on how to make changes.
There is a chance you could be selected for verification. If so, you’ll need to submit the appropriate documentation your school is seeking. Contact its financial aid department to find out what you need to do and the deadline to ensure you receive the aid.
If you have already applied and been admitted to one of the schools you indicated when filling out the FAFSA, you’ll receive an award letter from that school. This letter will inform you of how much and what type of aid you’re eligible for through that school.
Once you receive your award letter, understand any conditions to this aid and how it works. For example, certain scholarships may require you to maintain a specific grade point average.
Federal loans, loans from your college, and state loans have great benefits, but you’ll still owe whatever you accept plus interest. Understand these loans. For instance, subsidized loans don’t start accruing interest until you leave school, so they would be a better option.
And just because you’re offered this money doesn’t mean you must take all of it. If you’ve earned a scholarship, have been saving in advance, or found other smart ways to reduce your loans before college, you may not need to take out these loans.
Once you’ve determined what aid you’re going to accept, follow the directions on your award letter or contact your school’s financial aid office for your next steps. Colleges can have different methods for you to accept the aid — some may require you to sign something, while others may ask you to complete a form online to indicate what you’re accepting.
Keep in mind that some forms of aid may require additional steps. Just because you qualified and accepted work-study doesn’t mean you’re automatically going to get a work-study job. You may need to find a position that accepts work-study and go through the application process to start receiving that work-study income.
Once you receive aid, you need to maintain certain eligibility requirements. Some of these include:
- Continue to be a U.S. citizen or eligible noncitizen.
- Be in an eligible degree program.
- Be enrolled at least half-time for any Direct Loan Program funds.
- Not go into default on any federal loans. Default is when you fail to repay your federal loans on the agreed terms. In many cases, your loans go into default when you don’t make a payment for 270 days.
- Maintain “satisfactory” academic progress, which your college determines.
- Not be convicted of certain crimes.
Final Thoughts
If you’re interested in learning more about recent FAFSA changes and requirements, make sure to check the U.S. Department of Education website periodically. With the amount of student aid you receive up in the air, it’s crucial to fill out your FAFSA form correctly – and on time.
Have you ever filled out a FAFSA form? How will the new FAFSA changes affect you?
The post College Financial Guide: Filling Out the FAFSA appeared first on The Simple Dollar.
