With college costs continuing to rise, prospective students are becoming increasingly dependent upon financial aid to make their dreams of higher education a reality. The biggest step students can take to access any aid they qualify for is by filling out the Free Application for Federal Student Aid (FAFSA).
While filling out the FAFSA may seem straightforward, here are four things you should keep in mind before getting started.
1. Why is the FAFSA Important?
The FAFSA is beneficial for students because it helps them receive grants, loan programs, scholarships, and federal work-study. Any opportunity a student can take to secure grants should be prioritized – grants are free money you’ll never have to repay. If the students do qualify for other financial aid, filling out the FAFSA can get them lower interest rates on student loans.
2. How to Fill Out the FAFSA?
The FAFSA isn’t a short document, you should pencil in about an hour to complete the entire application. To fill it out online, you’ll have to create an FSA ID by creating a username and password. This FSA ID will work on the federal student aid websites you visit.
Once that account is created, you’ll head to fafsa.gov and find the option for starting a FAFSA. From here, you’ll enter the student’s name, date of birth, and Social Security number.
You’ll have to enter information, such as what schools you want to receive your child’s info. You should enter every school your child is even thinking about going to. You’ll also have to enter dependency status questions – this will help you figure out if the student must also disclose their parent’s information on the form.
All pertinent financial questions must be answered. You’ll want to have federal income tax returns and W-2s on hand while filling out the form.
It can take anywhere from three to ten days to process your FAFSA. The process is quicker if you’ve filled out the form electronically online. If you’ve filled it out on paper and mailed it in, it will take a few days longer.
3. What is the Expected Family Contribution?
The expected family contribution (EFC) is how much money the federal government and colleges anticipate your family will be able to pay each year for your college education. This number is important for determining what kind of aid, and how much, the student will qualify to receive.
Once the EFC is calculated, it will be subtracted off the cost of attendance for the colleges you’re interested in, the end number is your financial need. For example, if the cost of attendance is $25,000 and your EFC is calculated as $10,000, your financial need would be $15,000.
The EFC is calculated by considering the household income of the student’s family and how many family members there are. It doesn’t consider any debt the family has, so having more debt won’t mean you’re expected to pay less. But it can consider assets and benefits as well as income.
It’s hard to calculate your own EFC because the formula isn’t widely known, and colleges interpret that data differently – some include the value of your family home in their figures while others don’t.
4. What’s the Deadline for FAFSA?
For the 2020-2021 academic year, online FAFSA forms must be turned in no later than 11:59 p.m. Central time on June 30, 2021. You can apply as soon as October 1 of the year before the start date of your freshman year in college.
Be aware that each college might have a separate deadline – you should check with the colleges you’re considering.
Furthermore, every state also has its own deadline. Check these and always fill out your form by the earliest date listed out of all your sources.
The FAFSA is your greatest ally when it comes to finding financial aid to help you pay for college. If you don’t think the results were fair, you can appeal for more financial aid.
Your EFC can be different based on which college you’re selecting, so it’s important to research your opportunities and list multiple colleges on your FAFSA form.
Once you have received your EFC, you should start looking for other funding alternatives outside the federal government, such as individual scholarships and private student loans.
About the Author
Andy Kearns is a Content Associate for LendEDU and works to produce personal finance content to help educate consumers across the globe. When he’s not writing, you can find Andy cheering on the Lakers, or somewhere on a beach.