While the new school year has just begun, college students and parents are already looking ahead to the 2019-2020 school year with the FAFSA - the Free Application for Federal Student Aid.
“The FAFSA is the gateway to more than $150 billion in federal financial aid - we’re talking about grants, work-study, and federal student loans,” says Rick Castellano, spokesperson for Sallie Mae.
Castellano says the simple act of completing the FAFSA can translate into thousands of dollars for students. He has six tips for parents and students:
Don’t be afraid to apply
A study commissioned by Discover Student Loans found that 50% of parents with students currently in school or recently graduated said they didn’t fill out the FAFSA because they felt they wouldn’t qualify for aid.
“Just about every family who completes the FAFSA qualifies for some form of aid, so it’s worth taking the time to complete it,” says Castellano. “In fact, schools use the FAFSA to determine financial aid award packages. Also, if you are applying for certain scholarships or want to be eligible for state-based aid, filing the FAFSA is a must. That time you take to complete the FAFSA really can pay off, no matter who you are.”
If you think your family’s income is too high to qualify for aid, Sallie Mae says families should consider three things. Student and family income isn’t the only factor that the government uses when determining aid. If your family has money saved for college, savings might not be a major factor when a school decides if the student qualifies for Federal Direct Unsubsidized Loans. Sallie Mae also notes that attending college part-time does not exclude a student from getting assistance, as financial aid is available for those attending school part-time.
Be first in line
The FAFSA application becomes available on October 1 for the 2019 - 2020 school year. Castellano says it’s important to complete the FAFSA as close to October 1 as possible. Financial aid is awarded on a first come, first serve basis. There are also limited funds for certain programs. He says the earlier you fill out the FAFSA, the better chance you will have to be in line for that aid.
“F” is for free
If you need help filling out the application, Castellano warns against using companies that charge fees to complete the FAFSA.
“That first F in FAFSA is free,” he says. “If you are online and searching for information about the FAFSA, make sure you are not paying for anyone to help you complete the FAFSA. There are free tools and resources available online. At SallieMae.com/FAFSA we have a ton of information to help you get started, as well as FAFSA.gov.”
Bring the basics
Castellano says it’s important to be prepared when filling out the FAFSA. Both parents and students should create a username and password, which is called a Federal Student Aid ID. You will also need to gather important documents such as Social Security numbers, drivers license numbers, bank statements, 2017 tax returns, and any W2 forms.
When completing the FAFSA, Castellano says you will have to list at least one school. He advises students to think about listing state schools because some of the state aid you may receive will be based on your school list.
The Department of Education is simplifying the process for filing the FAFSA. Castellano says for the first time ever, you can complete the FAFSA on a mobile device with the myStudentAid app, which is available on any Apple and Android devices.
Castellano says filing the FAFSA has been made easier with the IRS Data Retrieval Tool. The program automatically populates all of your tax information into the FAFSA, saving you time. Note: the IRS Data Retrieval Tool is currently only available for those completing the FAFSA at FAFSA.gov.
File every fall
If you are a high school senior, returning college or grad student, you have to complete the FAFSA every year you are in school. Castellano says a new application is necessary as your financial situation may have changed and you could be eligible for additional aid.
“Talking about college and expectations on how to pay for college and doing so earlier, really sets up students for success because they have a good understanding of the plan to get there,” he says. “We see consistently those with a plan are better prepared to meet the costs of college and end up borrowing less.”
Linda Bell joined FOX Business Network (FBN) in 2014 as an assignment editor. She is an award-winning writer of business and financial content. You can follow her on Twitter @lindanbell.