Filling Out the FAFSA® Form: Free Application for Federal Student Aid

The Free Application for Federal Student Aid — also known as FAFSA® form — is the starting point in applying for college financial aid. The name of this statement is kind of misleading because you may assume that you’re completing to qualify for student aid through or sponsored by the federal government. While you are, the FAFSA® form information and the analysis of the answers you provide on it are also used by many colleges and universities as a starting point for determining your aid eligibility and ultimately how much a given school will charge your offspring to attend. For a look at the complete FAFSA® form, see the figures at the end of this article.

Many schools also require completing other financial aid forms because they like to gain additional detailed information beyond what the FAFSA® form captures.

Following are highlights of the important parts of the FAFSA® form and how to best complete them.

Completing the FAFSA® form online versus on paper

You can complete the FAFSA® form online or print and complete a PDF version by hand. With every version, you work on it as you have time — the website enables you to save your work to return for completion later.(There is an app for the FAFSA® form, but I don’t recommend using it and entering your personal and financial data through your cellphone.)

There is an important difference between completing the FAFSAâ form online versus doing so on paper. The online version information can be sent to up to ten schools versus only four for the printed version. If you’re applying to more than that many schools, you can have your FAFSAâ form sent to additional schools by jumping through some hoops.

I recommend that you go with the online version of the FAFSA® form if at all possible. Like the paper version, you can complete it over time, and the website allows you to save your work and return later. Filling it out by hand means you need to be neat, and if you want to make changes or revisions, you’re going to have to complete at least two versions so that your final one is clean and accurate. Also consider that another potential downside to the paper version is that you have to mail it, which means that like any other piece of mail, it could be lost by the U.S. Postal Service. And, finally, the online version enables you to zap your information out to up to ten colleges at a time whereas the paper version only allows sharing the information with up to four colleges at a time.

Sending your FAFSA® form to more than the “allowed” number of colleges

According to the U.S. Department of Education, you can list up to ten colleges on your Free Application for Federal Student Aid (FAFSA®) form. Once you receive your Student Aid Report (SAR), which provides you with the info you submitted on your FAFSA® form and summarizes your eligibility for federal student aid, you can make the information available to more than ten colleges through one of the following options. Each option will allow the college to receive an electronic copy of your SAR, and you will also receive an updated SAR.

• Option 1: Click Log In on the home page and log in to your FAFSA® account. You will be given the option to Make FAFSA® Corrections. Remove some of the colleges listed on your FAFSA® form, add the additional school codes, and submit the corrections for processing.
• Option 2: Call the Federal Student Aid Information Center (800-433-3243) and have them add the colleges for you. When you call, you must provide the DRN from your SAR or confirmation page. Refer to the Help page for contact information.
• Option 3: If you have a paper SAR, you can replace the colleges listed on the SAR with other colleges and mail the SAR back to Federal Student Aid. Note that the paper SAR allows you to change up to four colleges — not all ten.

Important note: If there are ten colleges on your FAFSA® form, any new school codes that you add will replace one or more of the school codes already listed. When this change is made, any college removed from the list will not have automatic access to any new information you provide after you’ve removed that college. However, the college will still have the data you submitted when you listed that college on your FAFSA® form. You are not deleting your FAFSA® form information from the college’s system.

A Federal Student Aid (FSA) ID

If you want to complete, sign, and file your FAFSA® form online, you will need to get what is called an FSA ID, which, “. . . allows students and parents to identify themselves electronically to access Federal Student Aid websites.” Per the FAFSA® website,

“An FSA ID is made up of a username and password and can be used to log into the online Free Application for Federal Student Aid (FAFSA®) form. While you aren’t required to have an FSA ID to complete and submit a FAFSA® form, it’s the fastest way to sign your application and have it processed. It’s also the only way to access or correct your information online, or to prefill an online FAFSA® form with information from your previous year’s FAFSA® form.”

Student is applying for aid

As you begin to complete the FAFSA® form, keep in mind that the questions presume that the student is applying for aid. There is an aspect of this that some people find perplexing and frankly annoying, and dare I say a tad disrespectful, to the people who generally foot most and in some cases all of the college bills — the parents! There also seems to be an assumption that parents are comfortable providing all of their financial details to their teenager in order for them to complete the form.

The student is the one applying to college and hence the one applying for aid, at least in the minds of those folks running colleges these days. That doesn’t mean that students are the ones actually completing these financial aid forms unless they are independent of their parents (for example, a student age 25 or older). I generally think that parents should be the ones completing the forms.

Questions like name, address, social security number, date of birth, and so on in the beginning part of the form refer to the student. Parent information is collected later in the form. Entering parent information in a student section is a common mistake, and when it’s an important field like social security number or income, it can cause big problems for your financial aid application. The form could stand some design improvements to address so many people making mistakes like this!

Selective service registration

Many parents and their sons are surprised by the question on the FAFSA® form pertaining to whether the student is registered with United States’ selective service, which is the system used to draft young adults into the armed services.

Males 18 years of age and older must be registered in order to be considered for federal aid (which for most people would be loans). You can check a box to initiate and complete that registration process.

Registering doesn’t commit a person to serve in the unlikely event that there is ever a future draft.

Interested in work-study consideration?

The FAFSA® form asks if the student is willing to consider “work-study,” whereby students are simply given low-paying, on-campus, part-time jobs (working in the dining hall, library, gym, and so on). The time commitment is generally quite minimal and probably no more than ten hours per week, and the schedule is quite flexible so as to not interfere with a student’s academic and other campus obligations.

I would recommend saying yes as there’s no real downside to saying you’re open to this. Students are not in any way committed to follow through on this should it be part of a financial aid award. They can always choose to opt-out of accepting that part of the financial aid package, which simply means your family is on the hook for paying a bit more to make up for that. Your answer to this question has no impact on the grant or other money offered to you elsewhere in the proposed financial aid package.

Federal income tax return questions

A number of FAFSA® form questions ask you to report specific data and line items from your prior year’s federal income tax return. You have two options for handling this. First, you can get out your copy of the return (which you should always keep) and look up and record the information yourself.

The second option is to use the IRS data retrieval tool to import data from your tax return to answer these questions. You are under no obligation to do it this way. And, I’m well aware that plenty of folks feel that giving the process access to your federal income tax return is an even more invasive approach to financial aid data collection.

In the unlikely event you are quite late in filing and still haven’t filed your prior year’s federal income tax return, you’re just going to have to do your best and estimate.

Income earned from work

Income earned from work is an item you need to report that’s not directly on a line of your federal income tax return. (It’s possible that a single line item on your tax return — for example for wage income or Schedule C — may correspond to a person’s income.) This includes wages paid to you by an employer, business income you may report on Schedule C, and so on. And, the amount should be before contributions you’ve made to a retirement savings account.

Value of your assets

Under the federal financial aid rules and calculations, retirement account assets are ignored, so don’t include their value in this or any other section of the FAFSA® form! Also, your home is not considered an asset under FAFSA® guidelines, so don’t include its value here either.

If you own financial assets like mutual funds and stocks outside of retirement accounts, you know their value fluctuates, so that does give you some latitude in reporting their current/recent value. Suppose that a recent quarterly statement shows the value of your investments during a recent depressed period. That would be a good date to choose for completing the asked-for data on the form.

If you own a business or investment real estate, be sure to subtract any debt or other obligations owed on those against a reasonable estimate of those assets’ current values. Also, recognize that if you had to sell any of those assets to free up money to pay for college expenses, you would have expenses related to that sale that can easily amount to about 10 percent of the value of that asset.

Coverdell education savings account balances and 529 plan assets are generally considered a parent’s assets for students who are still financially dependent upon their parents. For independent students who don’t report parental information on their FAFSA® form, 529 and Coverdell balances owned by the student should be listed as student assets.

Any custodial account balances are listed as a student’s assets. You may want to consider using those assets on your son’s or daughter’s current needs, as having more money in their name harms their financial aid awards.

Number of college students in household

If you have more than one member of your household who is attending college at least half-time during the same academic year, that generally will improve the financial aid packages offered. This makes sense since the expected family contribution is divided up among the number of colleges attended rather than all going to one college if just one family member were in college.

Source: U.S. Department of Education

The FAFSA® form: Free Application for Federal Student Aid. Page 1