FAFSA Basics – 7 Questions Answered About the Free Application for Federal Student Aid

Chris Ladd

If you have a high school senior, a child in college, or are considering higher education for yourself and you haven’t yet completed your FAFSA form for this year, then put that at the top of your To-Do-List this coming weekend!

1) What is FAFSA and what is it used for?

FAFSA is the Free Application for Federal Student Aid. Colleges use the information provided in the FAFSA form to determine your federal financial aid eligibility. Many colleges and states also use the FAFSA information to award their own aid. Aid can include grants, scholarships, federal work-study programs, and federal student loans.

2) Why is it important?

Even if you believe you or your child will not be eligible for federal financial aid, it’s still a good idea to complete the FAFSA form. Not only do states and colleges use the FAFSA information for grants and loans, but many offer scholarships based on the information. Since scholarships do not have to be repaid, you could be passing up free money by not applying.

3) Who needs to complete it?

The student and parents each need a FSA ID for the FAFSA system, and financial information for both is needed. Sharing of FSA IDs is not allowed and can create potential problems and delays with processing the financial aid applications. The student or a parent can start a FAFSA application for the student, and they can then coordinate completion of the FAFSA form. If parents have multiple children in college or will have additional children in college in the future, the information saved under the FSA ID can be used again. It is a good idea to create your FSA ID a few days ahead of time if possible, as some activities are limited until information is matched with the Social Security Administration for verification.

4) What information is needed to complete the form?

At a minimum, you need the following information to get started with the form:

  • Social Security number
  • Driver’s license number (if you have one)
  • Tax return information for you and your child for the tax year two years before your child will start school. (For example, if your child will start school in the fall of 2021, you need your 2019 tax return.)
  • Details about untaxed income such as child support, tax-free interest income, workers compensations, and disability benefits
  • Balances or value of non-tax deferred assets, such as checking and savings account balances, investment accounts, real estate (excluding personal residence), and businesses. (Note that retirement accounts such as 401k’s and IRA’s are not included.)
  • Schools your child is considering attending so the financial aid departments of those schools will automatically receive the FAFSA information

This article on the Federal Student Aid website has more details about Things You Need Before Filling Out the FAFSA Form.

5) When is the deadline for completion?

The FAFSA application form is available each year beginning October 1st for the following academic year and must be renewed annually for financial aid consideration. In other words, federal aid is granted for the 2021-22 academic year based on information you provide as early as October 1, 2020. Technically the form is not due until June 30 of the academic year (June 30, 2022 for the 2021-2022 school year). However, many states and schools have limited funds and typically distribute those funds based on application date. So get your application completed as close to October 1st as possible. Even if you did not complete your FAFSA form early and find you could use financial aid for the current academic school year, go ahead and complete the FAFSA form prior to June 30th. You may still receive federal grants and loans to cover what you have already paid for the academic school year.

Colleges and states have their own financial aid deadlines. If you or your child has a specific college in mind check with both the college and the state to determine their specific application deadlines. The Federal Student Aid website has a page dedicated to financial aid deadlines.

6) How long does it take to complete the FAFSA form?

Gathering the needed information and completing the FAFSA form typically takes about an hour or less. If this is your first time applying for financial aid, it may take a little more time to read about how financial aid works and what to expect from the process.

7) How much does it cost?

There is no cost for completing the FAFSA form. All that is required is a small investment of your time.

Ready to get complete your FAFSA form or want to learn more about FAFSA? Head over to the Federal Student Aid website, or read more about what to expect when completing the FAFSA form.

By Chris Ladd

TriPrescient Insights

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