There are several steps that students and parents can take in advance to prepare for filing the Free Application for Federal Student Aid (FAFSA). The FAFSA is a free form that is used to apply for financial aid from the federal government, state governments and most colleges and universities.
The FAFSA application season begins on October 1. It is important to file the FAFSA as soon as possible on or after October 1, since some financial aid is awarded on a first-come, first-served basis or until the money runs out. So, students who file the FAFSA sooner will get more financial aid funding, on average, as compared with students who file the FAFSA later.
The FAFSA is filed annually, once for each year in college. File the FAFSA even if you think you earn too much money to qualify for financial aid. Most applicants will qualify for at least some student loans. File the FAFSA every year, even if all you got was just loans last year. Subtle changes in family circumstances, such as the number of children enrolled in college at the same time, can have a big impact on eligibility for need-based financial aid.
These steps must be taken each year, before filing the FAFSA.
- Determine the student’s dependency status. The student’s dependency status will affect whether parent information is required on the FAFSA.
- Determine whether parent information is required on the FAFSA. This depends on whether the student is a dependent or independent student, whether the parents are divorced or separated and whether the student’s parents live together.
The student should create a FSA ID at fsaid.ed.gov. The FSA ID is an electronic signature, used to sign the FAFSA. Write down the username, password, email address and challenge questions and keep this information somewhere safe (e.g., take a picture of it with your smartphone). Also provide your cell phone number when registering for a FSA ID. This will make recovering a lost or locked FSA ID much easier. Even though the FAFSA season starts on October 1, you don’t need to wait until then to get a FSA ID.
If parent information is required on the FAFSA, the parent should get their own FSA ID. The parent should not create a FSA ID for the student. Many problems are caused by parents swapping the student’s FSA ID with their own or the FSA ID of the student’s sibling.
Gather important documents, such as your Social Security card and driver’s license (if any). If you are not a U.S. citizen but an eligible non-citizen, get your alien registration number and permanent resident card (green card).
Gather financial records relating to income. The FAFSA uses income and tax information from the prior-prior year (two calendar years prior). For example, the 2019-2020 FAFSA requires information from your 2017 federal income tax returns. Ideally, you should use the IRS Data Retrieval Tool to transfer income and tax information from your federal income tax return to the FAFSA. Otherwise, you’ll need a copy of your tax return, W-2 forms and 1099 statements. It is also a good idea to get a tax return transcript by filing IRS Form 4506-T or using the IRS Get Transcript tool. Also get records of untaxed income, child support paid and received.
Gather financial records relating to assets. Assets and demographic questions are answered based on the date the FAFSA is filed. Usually, one relies on the most recent bank and brokerage account statements prior to the date the FAFSA is filed. But, one can also use a printout from the account’s web site, if there has been a recent change. (One can reduce reportable assets by using assets to pay down debt. One can also shift child assets into parent assets by rolling custodial bank and brokerage accounts into a custodial 529 plan account.) Gather a list of all stocks, bonds, mutual funds and other investments, including 529 plan accounts. Also, gather business records.
Create a college list. You do not need to have applied for admission to a college to list it on your FAFSA. You must provide at least one college on the FAFSA for the FAFSA to be processed. It is a good idea for the college to be an in-state public college, since listing a state college first is often required for the student to be considered for state grants. You can add more colleges later.
- If the student is a dependent student, parent information will be required on the FAFSA.
- If the student’s parents are married or are living together, information from both parents will be required on the FAFSA.
- If the student’s parents are divorced or separated and do not live together, then only one parent’s information is required on the FAFSA. This parent is the parent with whom the student lived the most during the year ending on the date the FAFSA is filed (or, failing that, the parent who provided the most financial support to the student).
- If the student is independent, then parent information is not required on the FAFSA.
If you file the FAFSA online, at fafsa.ed.gov, you may have the opportunity to file a renewal FAFSA, which prefills the answers to the demographic questions based on the previous year’s FAFSA. You should review the answers carefully, to make sure that none of the information has changed.