College-bound students and their families have more work to complete beyond submitting applications and (hopefully) deciding which school to attend. Students should file the Free Application for Federal Student Aid (FAFSA) before starting college and in succeeding years. As the cost of higher education soars, filing the FAFSA may provide some valuable relief.
Why it’s important
Using the FAFSA to apply for aid opens the door to various forms of assistance, including need-based grants, merit-based scholarships, education loans, and work opportunities. Funds may come from federal or state governments or from individual colleges.
Essentially, aid applicants use the FAFSA to report the student’s assets, student’s income, parents’ assets, and parents’ income. These data are placed into a formula to determine the expected family contribution (EFC) for the coming academic year. If the cost of attending a given college exceeds the EFC, the student may be offered some form of financial aid.
Example 1: Ophellia fills out the FAFSA, which determines that her EFC for the coming school year is $22,000. If Ophellia will be attending a college where the published total cost is $36,000, she might receive a $14,000 aid package to fill the gap.
Some parents may choose not to have their youngsters file the FAFSA, either because they doubt they’ll receive need-based aid or because they don’t want to deprive more deserving applicants of limited aid dollars. That’s for each family to decide, but not filing the FAFSA may have repercussions. Some merit scholarships require the FAFSA, as do federal education loans. What’s more, some colleges are so expensive that relatively affluent parents can qualify for aid, especially if more than one child will be attending college.
A matter of time
Filling out the FAFSA presents some challenges. The forms can be filled out as early as January for the following school year. Indeed, some observers recommend filing as early as possible because late filers may be competing for a depleted pool of funds. Some universities have early deadlines for submitting the FAFSA. However, families filing in January may not yet have all the relevant information, such as adjusted gross income (AGI) for the previous calendar year.
Example 2: Brad Taylor is a high school senior in 2014–15 who will start college in August 2015. In January 2015, Brad fills out the FAFSA with help from his parents. They include their best estimates for 2014 financial information, including AGI. In March 2015, after the Taylors’ tax returns for 2014 are completed, they update the data on the FAFSA that was previously submitted.
Going forward, the Taylors keep submitting a new FAFSA every year, until Brad no longer will be in undergraduate or graduate school.
You and your student can fill out the FAFSA online at www.fafsa.ed.gov. Some colleges require still other financial aid forms, and the entire process can be time-consuming. Our office can help college students and their families to organize the required documents and submit the necessary materials on time.