The FAFSA or “Free Application for Federal Student Aid”– comes out Oct. 1st for students who plan on attending college in the fall of 2020. College application deadlines may be months away right now, but I can’t stress enough that students and their families should file their FAFSA as soon as possible after Oct. 1st.
The Department of Education administers the FAFSA – it’s the financial aid form that helps students qualify for loans and financial aid. Household data gathered from the FAFSA –such as annual income, household members and savings – is then determined by the Education Department how much a family could pay toward college. Your EFC “aka” Expected Family Contribution is the formula that determines what you must pay.
The FAFSA form is also sent to the Colleges which serves as the basis for their financial aid offers to applicants, as well as state agencies. Scholarships are generally given on a “first come, first served” basis until the budgeted money is gone, so don’t wait! - get it done!
When Is The FAFSA Deadline?
The FAFSA federal deadline is June 30, 2021 for students enrolling in the 2020-21 academic year. But, as I mentioned earlier, many states and colleges apportion financial aid to those who apply first, which is why I urge students and their families to apply as soon as possible. Students can find a list of state deadlines on the website for the Office of Education.
Below are three pitfalls to watch out for with the FAFSA
1. Should I Skip Completing The FAFSA?
According to research from student loan company Sallie Mae, about 25% of families never complete the FAFSA form. The most common reason is families don’t believe they won’t qualify for any financial aid, which is a huge mistake….if you don’t ask, you shall not receive!
Majority of the families qualify for financial aid, unlike most people think, It's not all need-based money. There are a lot of scholarships and merit-based scholarships a school might grant you, but you must take the first step and fill out a FAFSA for a school to qualify for them. In addition, federal loans are available only to students who complete a FAFSA, which means you’ll need to submit the form if your child intends to borrow through a Stafford loan or other types of loans offered by the government.
2. Should I Wait To File Our FAFSA?
Because the FAFSA requires students to list at least one college they plan on applying to in order to complete their application, some families hold off and wait. That delay given the first-come first served approach could result in lost aid used by some states and colleges. More importantly, if you only list one school, the school knows they don’t have any competition, so why would they offer you any scholarship money? They typically will not.
It’s important to be prepared - gather the information you’ll need before taking the time to fill out the FAFSA form. According to the Department of Education says you’ll need your 2018 tax returns, your bank statements, Social Security number and driver’s license.
According to the Sallie Mae survey, other families say they delayed because they weren’t aware of the deadline or didn’t have all the information they needed. To apply, both you and your student will need to register for your own Federal Student Aid ID.
3. Inputting The Wrong Data
This is probably the biggest factor we see is people making mistakes which can end up costing you literally thousands of dollars if filled out incorrectly. 75% of FAFSA forms are reported to have some type of mistake or improperly reported information. Now since the tax laws changed it may even complicate the process due to compatibility issues between the IRS Data Retrieval Tool, which automatically grabs your tax return data for the aid form, and the FAFSA information.
Errors on your FAFSA, which could get the form flagged for review is called “verification” from either colleges or the Department of Education itself. If your FAFSA gets pulled for verification it can slow down your FAFSA application process, allowing others to skip ahead of you in the line. Start getting used to the front of the line!