Federal financial aid plays a crucial role in the ability for many students to go to college, but studies show that millions of students from low-income and underserved families don’t receive the aid they need because they fail to fill out the Free Application for Federal Student Aid (FAFSA).
“That can mean the difference between going to college or not--a decision that could potentially be worth a million dollars in income over the course of a lifetime,” says Carolyn Berkowitz, managing vice president of Community Affairs at Capital One.
According research from Sallie Mae, 20% of undergraduate families did not submit the FAFSA for the 2011 academic year and half said they did not complete the form because they were not aware or did not think they would qualify for aid.
It’s especially important that low-income families receive the appropriate amount of aid because the stakes are high. First-year college students who apply for federal student aid are 72% more likely to persist through college than their peers who are eligible for this aid but do not apply, according to Berkowitz.
“Lower-income families are more likely to be eligible for more aid so they want to file that aid as awarded according to deadlines on a first come, first serve basis,” says Karen McCarthy, spokesperson for the National Association of Student Financial Aid Administrators. “If they make sure that they’re filing it early, then they’ll be in the loop and open to consideration for the maximum amount of aid that they’re eligible for.”
For low-income families who have not yet filed their FAFSA, here are four tips to ensure the process goes smoothly and to avoid leaving money on the table.
Budget Cuts Send Tuition Costs Skyrocketing in Calif.
Parents: Get Over College Tuition ‘Sticker Shock’
Getting College Credit in High School: Worth It?
College Dream Loses Luster, But Students Still OK With Taking on Massive Debt
More Colleges Offering Tuition Breaks
Saving for Tuition vs. Retirement: Which is More Important?
Five Money-Drainers That College Students Should Nix
How You Pay for College Impacts Your Tax Bill
Don’t Fall for These Costly College Payment Myths
Private School Education: Worth the Cost?
Rising College Costs Shifting More to Students
Tip No. 1: Prepare All Necessary Documents
Preparation is key for filling out the FAFSA properly and families should have all the necessary personal and financial information on hand, including Social Security numbers and tax records for both students and their parents, as well as the students’ list of college choices.
Income questions on the FAFSA are generally pulled from a tax return, but if a family’s income is low enough that they have not filed a tax return, a W-2 can be used in some cases instead, says McCarthy.
“It’s not a requirement [for the FAFSA] that you file a tax return, you are actually required to do one by IRS rules, but if you have not filed a tax return and you are not required to, you’ll just use information off any W-2s that you have,” she says.
Tip No. 2: Hit Every Deadline
Because aid is administered on a first come, first serve basis, low income families are advised to file as early as possible.
“For the federal program, the deadline is really any time from now through the end of the academic year for which you are applying for aid, whereas in different states, there are specific deadlines,” says Patricia Nash Christel, spokesperson for Sallie Mae.
To avoid missing out on additional aid from the state the student lives in or where they will be attending college, families should check out this link.(http://www.fafsa.ed.gov/deadlines.htm)
Tip No. 3: Determine Custodial Parent in Families of Divorce
Although one parent in families of divorce may earn less income than the other parent, the FAFSA form is clear that students should report the income of the “custodial” parent, the parent who was granted primary custody after the divorce, says Kim Nauer, education project director for the Center for NYC Affairs at The New School.
“In some cases, parents are granted equal custody, meaning the student could live with one parent 50% of the time and the other parent 50% of the time,” she says. “In these cases, the FAFSA form asks the student to do an honest assessment of where he or she spent the most time in the prior year--it is that parent’s income that should be reported.”
To avoid errors, Nauer suggests reaching out to FAFSA’s hotline to get further advice from advisors on how to file in cases of divorce. (https://fafsa.ed.gov/contact.htm)
Tip No. 4: Look for Additional Help
Families should seek out the many financial aid resources available to them to ensure they are filing as accurately as possible.
“Families have a number of options, such as consulting FAFSA: The How-To Guide for High School Students (And the Adults Who Help Them), which is a practical online tool…to help families decode the application and answer common and uncommon questions that can be tricky and potential stumbling blocks,” Berkowitz says.
Colleges and nonprofit organizations will often have financial aid workshops available to members of the community who are seeking additional assistance, says McCarthy.
“If you’ve missed that or your community doesn’t have those types of events, you can always seek assistance from a financial aid office at any school or a school you are applying to for assistance.”