The first day of October marks an important date for parents of college-bound students as the Free Application for Federal Student Aid (FAFSA) for the 2018/2019 academic year becomes available.
This post originally appeared on Forbes.
Autumn may seem like a long way away right now, but if your child is headed to college this year, now is the time complete the Free Application for Federal Student Aid (FAFSA). The 2016-2017 FAFSA became available on January 1. Completing the FAFSA is not a simple task. It will take some time to gather all of the necessary information, so get started as soon as possible. The due date to submit the FAFSA for the 2016-2017 school year is generally June 30, 2016, although some schools have earlier deadlines.
Although completing the FAFSA is technically the student’s responsibility, parents play a large part if the child is considered a dependent student. Dependency guidelines for the FAFSA are different from those of the IRS. You can’t choose not to claim your child as a dependent on your tax return in order to get a better financial aid offer.
Before you begin, make sure you’re applying on the correct site. The official FAFSA website is fafsa.gov and completing the FAFSA is always free. There are many services available online that charge a fee to help you file online. If you are asked to provide credit card information, you are on the wrong site.
One parent and the child will need to apply for FSA IDs in order to log in and sign the FAFSA online. Create the IDs as soon as possible, since you may need to wait up to three days to use your FSA ID after registering. You’ll also need the social security numbers of both parents and the student and the student’s driver’s license number. If the child comes from a single-parent home and lived with one parent the whole year, only the custodial parent will need to provide information.
You’ll need income records for the tax year prior to the academic year for which you are applying, so for the 2016-2017 FAFSA, you’ll need your 2015 tax return. If you haven’t filed your taxes yet, you can still fill out the FAFSA now, estimating 2015 amounts using your 2014 return, and update the FAFSA once you file your 2015 taxes. After you file, you may be able to import your tax information electronically into the FAFSA using the IRS Data Retrieval Tool. Don’t wait until you file your tax return! Financial aid is awarded on a first-come, first-served basis so it’s important to apply early.
You’ll also need records of untaxed income (such as child support, veterans noneducation benefits, and amounts paid to IRAs), balances in all asset accounts (savings and checking account balances, investment accounts, and real estate), and a list of schools the student is interested in attending.
There are a few tricks to improving your eligibility. First, if your family has had a sudden decrease in income, such as a job loss, that isn’t reflected in your 2015 tax information, gather documentation of the situation. Your child will need to present that information to the financial aid administrator at the school. Next, the FAFSA asks how much cash students and parents have in savings and checking accounts at the moment you are filling out the FAFSA but it doesn’t ask about debts or bills. If you have significant cash balances, use it to pay down credit cards, car loans, or other bills before completing the FAFSA. Finally, when listing the value of investments and real estate, don’t make the mistake of including the value of retirement plans and your primary home. Neither is used to calculate financial need, so including them can hurt your chances.
Two-thirds of freshmen FAFSA applicants list only one college on their application, but you should list any school being considered, even if the student hasn’t applied or been accepted yet. All schools listed on the FAFSA will automatically receive your FAFSA results electronically and use that information to determine the types and amounts of financial aid you may receive. You can list up to 10 schools on your FAFSA. If you’re applying to more than 10 schools, you can add more later. Note that some states require you to list schools in a particular order to be considered for state aid. For instance, you might be required to list an eligible in-state college to be considered for state grant aid. Check your state’s requirements prior to filling out that section.
Once you submit the completed FAFSA, it will take about three days for the FAFSA to be processed and sent to the schools, then both you and your child will receive an email confirmation. During the winter or spring, your child will receive financial aid offers from schools.
Complete the FAFSA even if you think you make too much money to be considered for student aid. The FAFSA is often the only way colleges will consider you for financial aid and even students from families earning more than $200,000 a year may qualify for need-based aid from private colleges. The FAFSA may also qualify your child for low-cost, forgivable federal student loans. A January 2015 study by Edvisors found that approximately two million students who would qualify for federal Pell grants don’t even fill out the form. Completing the form may be a pain, but your family may be able to save thousands on college costs. Just do it.