FAFSA Filing season is here for high school seniors, college students and their parents.
If you haven’t yet filled out the FAFSA – the Free Application for Federal Student Aid – you need to get going immediately in order to meet a host of deadlines and ensure that you don’t miss out on a bounty of free college funding for which you or your child might qualify.
Even if you don’t think you’ll be eligible for any free aid whatsoever, it’s still wise to fill out the FAFSA because it’s often required for merit-based scholarships and other grants that don’t take income into account.
Here are four FAFSA filing tips to help you get the maximum college financial aid possible.
Tip 1: Get an FSA ID First
If you’re a parent, both and your child will each need to get an FSA ID. This online ID is required before you can fill out the FAFSA.
The FSA ID has two parts: a username and a password.
The government uses the FSA ID to confirm your identity when accessing your financial aid information and to allow you to electronically sign the FAFSA.
Tip 2: Pay Attention to 3 Different Deadlines
The U.S. Department of Education suggests families be aware of three important FAFSA deadlines: your school deadline, your state deadline and the federal deadline.
School deadlines vary from campus to campus, but most colleges and universities want you to fill out the FAFSA around February or March.
Many states that award college financial aid to in-state students likewise recommend completing the FAFSA in the early spring. State money for college is often awarded on a “first come, first-served basis,” so don’t procrastinate. You can use this tool from the Education Department to find the exact deadline in your state.
The federal financial aid deadline is June 30, regardless of where you live.
To increase your financial aid, always apply by the earliest deadline. Ideally, you should file the FAFSA in January or February – about six months or more before a student actually enrolls for the Fall.
Remember too that even though the FAFSA asks about income earned the previous year, you don’t have to wait until you’ve filed your taxes to submit your FAFSA.
Tip 3: Understand the four factors that impact your financial aid award
The information you put on the FAFSA will ultimately be used to calculate a student’s EFC, or Expected Family Contribution. This figure determines whether or not you qualify for need-based financial aid, and if so, how much.
The higher your EFC, the less aid you’ll get. Conversely, the lower your Expected Family Contribution, the more free money for college you’ll receive.
Some individuals with low income can have an EFC of 0 – putting them in position to get a boatload of need-based scholarships and grants from the federal government, their states or schools of choice.
Even a family with a moderate or relatively high income can generate an EFC of 0 – or a very low EFC – just by understanding the four factors that are used to compute your EFC: parent’s income, parent’s assets, student’s income and student’s assets.
Structuring your assets appropriately in the year before filing the FAFSA is a key to getting a more generous financial aid award.
Tip 4: Use key college savings strategies to land more free money
There are several ways you can manage your family’s income and assets in order to qualify for more college money that doesn’t have to be repaid.
Start by putting savings in the parent’s name, not the student’s. The federal financial aid formula assumes that 20% of a student’s assets will go toward college costs. But parental assets are assessed at just 5.64%.
You can also use cash in a bank account to pay down debts, like credit card bills or an auto loan with a balance outstanding. This helps in two ways: not only will you get rid of consumer debts that are likely charging you interest. You’ll also remove that cash from your bank account, lowering the assets you have on hand – which increases your financial aid award.
You should also maximize contributions to a 401(k) or retirement plan before the student’s senior year, because those funds won’t be included in the FAFSA calculation.
Every year, more than 18 million people fill out a FAFSA form.
Following all of the tips above will help you get your share of free money for college, including a slice of the more than $150 billion in federal aid that is awarded to college students each year.