What Is the FAFSA and How Does It Work? A Guide
As a college admissions representative, one of the first questions I ask prospective students and their families is always, “Have you filled out and submitted your FAFSA yet?”
While some proudly say yes, the most common reaction is a mix of horror and bewilderment. Those terrified or confused looks are followed up with the question, “What is the FAFSA and why is it so important?”
The easy answer to that is this: If you want to go to college these days, you’re going to pay. And if you can’t afford that sticker price, the FAFSA is one of the few ways of reducing the massive tuition bill.
Despite the government’s attempts at making the financial aid process simpler and more transparent, parents and students are still stumped by the process. That’s why CentSai has created the definitive guide to the FAFSA.
Grab your (and your parents’) taxes, get ready to click some links, and hold on — it’s time to get the help you need to pay for college.
What Is the FAFSA?
FAFSA stands for Free Application for Federal Student Aid. Run through the federal government, the FAFSA is a unified way for every federally funded college and university to understand your family’s financial picture. Whether you can afford to self-fund your tuition or you need help, a filled-out FAFSA will ultimately make the official call.
Expected Family Contribution
Once the form is filled out, the FAFSA gives you and your college an estimate of what you can pay. This is called the Expected Family Contribution (EFC). It’s probably one of the most important financial figures in your or your child’s life if college is on the horizon.
The EFC estimates how much money you can pay for college out of pocket, and that’s why it’s a big deal.
For example, let’s say that a family of four with an 18-year-old and a 15-year-old have an adjusted gross income of $100,000, plus $50,000 in cash savings. Their 18-year-old, who’s applying for college next year, makes $5,000 per year and has $5,000 saved up. Using the FAFSA4caster, this family would have an estimated family contribution of $27,000 toward that child’s college bill per year.
Woah! If you’re like me, you’re probably thinking that’s a lot of money to put on a family. But the FAFSA will send that report out to the college you’re applying to. Given that the average tuition at a private school is nearly $35,000, there’s a difference of $8,000 that federal, state, or school funding will try to make up or exceed.
Not only does the FAFSA give a picture of your money situation, but it also shows what “free” and “borrowed” money you may qualify for. Some of the funds up for grabs include federal grants, college-specific scholarships, state programming, and the (dreaded but often needed) federal student loan.
“Many parents think that they make too much money to qualify for [aid from the] FAFSA, so they don’t fill it out,” says Mary Frank, a financial aid officer. “Every year I have to tell them that it’s not true.”
“The FAFSA isn’t just for the poorest of poor. It’s for middle-class families and those with savings,” Frank continues.
“While you may not be qualifying for Pell grants or need-based aid, you may be surprised what you do get.”
When to Fill Out the FAFSA
Before you fill out the FAFSA, you must meet a few requirements. First, you must be a legal U.S. resident or citizen with a Social Security number. If you’re male, you’ll need to be enrolled in Selective Service. Finally, you must either have completed high school, be completing it, or have graduated through a GED high school equivalency program.
The FAFSA is open from October 1 through June 30 for the next school year. That said, it’s important to always double- and triple-check these deadlines, as they are subject to change.
Frank also gives this invaluable piece of advice: “Apply early! Money for programs like work-study [in which a student works and earns money toward tuition] dry up quickly. The earlier you apply, the better your chances!”
And don’t think you’ll stop applying after your freshman year. Any student needing tuition help must reapply for every enrollment year — including those in graduate or doctoral programs.
What You Need to Know Before You Apply
Now that you’re aware that you need to fill out the FAFSA, there are a few essential things you’ll need to know before you begin to do so.
First, and maybe most important, you’ll need to determine if you’re an independent or dependent student. This is one of the most common mistakes filers make, especially for nontraditional students.
The rundown is that if you’re under 24 years old, with at least one living parent (estranged or not), unmarried, working toward your bachelor’s degree, and not currently serving (and haven’t previously served) active duty in the armed forces, you’re considered a dependent student.
However, because these situations are tricky and regulations change yearly, we recommend talking to a financial aid expert about your unique situation or checking out the FAFSA’s explanation.
How to Fill Out the FAFSA
Once you’ve determined if you’re an independent or dependent student, you’re ready to begin. You will first need to request an FSA ID. Parents will need one in addition to their student. Don’t mix up your IDs, as that will delay your application.
First-timers may need to wait one to three days to receive theirs by email and seven to 10 days by mail.
Then you’ll head to the FAFSA site and begin filling out your application. You’ll start by selecting what year(s) you’ll need aid for, followed by demographics, the schools you’re applying to (up to 10), and whether you’re an independent or dependent student. Finally, you’ll use last year’s taxes to submit the parent and student’s financial information.
Hate paperwork? The FAFSA has you covered. You can use the retrieval tool to pull up your previous year’s information. Save time and stress!
The final step is for all parties to sign and submit the FAFSA. This is where the FSA ID comes back into play. And remember: You to never, ever mix up your parent and student FSA IDs. If you don’t want to sign electronically, you can print and mail it. (And parents of multiple children, keep that FSA ID safe. You’ll use it in the future for your other kids.)
Sound overwhelming? We get it. It can be intimidating.
That’s why many community colleges and nonprofit organizations offer free FAFSA workshops or help. At the community college where I work, any community member can come in during business hours and receive individual support from a financial aid officer. Most tax preparers and tax software (such as TurboTax) will also help you fill out the FAFSA as part of your income taxes.
What Happens Next?
Once you’ve submitted your FAFSA, your application is sent to the colleges you selected, as well as to federal and state agencies. The financial aid office at your schools will then determine how best to offer (or not offer) financial aid to you.
In about one to three weeks, you’ll receive a Student Aid Report, which is a summary of your information. Make sure to go over every line, as you will want to catch and correct any errors.
The schools you were admitted to will present a financial aid package or award letter. This includes the mix of aid you qualified for, using the FAFSA. If you can take out federal loans (which are almost always better than privately funded ones through banks or lending agents), this package will also indicate this. From there, you’ll have to decide how to proceed.
Don’t Delay, Don’t Forget
No definitive guide to the FAFSA would be complete without a final, nagging reminder to get your application in early. If you’re reading this and it’s past October 1, run, don’t walk, to your nearest computer.
Neglecting or putting off filling out the FAFSA could mean forfeiting the aid you need to pay for college.