5 Things to Know About the Free Application for Federal Student Aid (FAFSA)

Beginning on October 1, millions of American college students and their parents will fill out and file the Free Application for Federal Student Aid (FAFSA) for the next academic year.

This application is the first step in the financial aid process and is used to determine eligibility for federal student aid and most state and college aid also.

Some schools and states may use additional aid applications to determine eligibility for aid from the school or state. For example, a few hundred colleges use the CSS Profile to award institutional aid, which is aid that comes from the college itself. But the FAFSA is the key to all federal student aid and much of the state and school aid.

It doesn’t cost anything to file the FAFSA, other than a small amount of your time. The U.S. Department of Education reports that it takes most people less than an hour to complete and submit the FAFSA- and this includes gathering any data you may need to fill out the form.

The following are five things you should know about FAFSA if you or your child will be attending college next year.

 

The FAFSA form is used to apply for financial aid for college and graduate school.

• Several types of federal aid are available, including loans for students and parents, grants, and work-study jobs.
• Many types of federal aid, such as subsidized loans, most grants, and work-study jobs, are awarded to students who demonstrate financial need.
• Many states and colleges also use the FAFSA to determine a student’s eligibility for state and school aid.

Even well-to-do families may benefit from filing the FAFSA.

• Even if your college student does not qualify for federal student aid based on financial need, filing the FAFSA is a necessary step in gaining access to low-interest federal loans that are not based on financial need.
• Plus, the FAFSA is required by some schools before they award merit-based aid, such as academic scholarships.

The FAFSA filing period for the 2021-2022 academic year begins on October 1, 2020.

• The filing period generally ends in late June, but many states and colleges have earlier deadlines by which you must submit the FAFS to be considered for state and college aid. To avoid missing out on that aid, the Department of Education recommends filing the FAFSA as soon as you can on or after October 1.

You’ll need info from your 2019 tax return to complete the form for 2021-2022.

• If the student is dependent, both the student’s and the parent’s federal tax information must be entered into the form.
• Although you can enter the information manually, the FAFSA offers an IRS Data Retrieval Tool that transfers your tax information directly from the IRS into your FAFSA form.

Filing the FASFA is an annual task.

• The information you provide on the FASFA will determine the student’s financial aid eligibility for just the next school year. A new FAFSA form will need to be completed before each school year.
• You don’t have to start from scratch each year. Choosing “FAFSA Renewal” when you begin the form will pre-fill many of the non-financial questions with information that you entered on last year’s form.

For more information about filing the FAFSA or the types of financial aid that may be awarded to you, please visit the Department of Education’s website at studentaid.gov

With offices in Rutland and Williston, Vermont Copper Leaf Financial develops a customized wealth management plan designed to integrate every aspect of your financial life. Our approach is to provide clarity and calm amidst the chaos. Where there is uncertainty we look for facts. We call our approach evidence-based investing. Call us today at 802-878-2731 to schedule a strategy session and begin building your road map to financial

Article published in September 2020 edition of Eye on Money. If you would like to be added to our mail list please email jennifer@dh-cpa.com.