The first, and most important, piece of advice for parents regarding the FAFSA is: take the time to complete the FAFSA, even if you don’t think you will qualify for aid. Most parents believe that the FAFSA is only for financially needy students, but that is an incorrect assumption. The truth is that colleges use the FAFSA data when dispersing financial aid to accepted students. Parents and students who don’t complete the form could miss out on all types of college merit aid. Even if you can pay the tab, it makes sense to complete the FAFSA.
FAFSA Basics
The purpose of the FAFSA is to gather financial information. The form is submitted once a year and must be completed every year of college to receive government financial aid—this includes grants, loans, work study and state financial aid. As mentioned previously, it is also used by many colleges every year to determine other forms of institutional merit aid.
The FAFSA gathers financial information to determine a family’s EFC (Expected Family Contribution) toward their son or daughter’s college education. The information you submit on the form goes into the aid calculations. The result of these calculations is the EFC. The data then goes to the colleges your student designates on the form to receive it. These calculations are based on assets and income of both parents and students, the size of the family, and the number of dependent children enrolled in college that year. These calculations asses the family’s ability to pay for colleges using these funds.
It’s critical to file the FAFSA as soon as possible once it becomes available on January 1st at http://www.fafsa.gov.
What do you need to complete the FAFSA?
Even before January 1st, you can start gathering the documents you need to complete the form. The first thing you and your student should do now is register and secure a PIN to sign the return. You can get the PINs here: http://www.pin.ed.gov/. Once you’ve got your pin, gather these important documents:
- Social security numbers (for both parents and student)
- Student’s 2014 W-2s and tax returns (if any)
- Parents 2014 W-2s and tax returns (if the student is a dependent)
- Bank statements
- Business financial statements (especially if the college requires a CSS Profile)
- Citizenship records—alien registration or permanent resident card (if you are not a U.S. Citizen)
An important note: although the FAFSA requires information form your finished tax return for 2014, it’s not required to complete the form. You can complete the form using your estimated tax information and then update the figures once you file your return. It’s more important to complete the FAFSA early before all the aid is dispersed than to wait until April 15 and miss out on all the aid.
After your tax return is filed, you can login to your online FAFSA and use the IRS Data Retrieval Tool to download and automatically populate the information from your completed tax return. If you file your return electronically, the data will be available in approximately three weeks after you submitted your return. If you file a paper return, you should go into the FAFSA and manually update with the correct tax information once your return is mailed.
The FAFSA requires teamwork
The FAFSA asks for information from both the student and the parents: student demographics and schools applied to, and dependency determination along with parents financial information. Since it requires data from both parties, it’s best to work as a team when completing the form. Many parents and students choose to sit down together and complete the form. Both are responsible for signing the return if your student is a dependent. You are both responsible for the information gathered on the form.
Who is considered a parent (and/or guardian)?
Last year, the U.S. Department of Education updated the FAFSA guidelines impacting some parents and clarifying the definitions:
- Traditional Married Couples—Married husband and wife with kids, it’s easy to complete the form. Both parents share their financial data.
- Unmarried Parents Living Together—In the past only one of the parents had to share data. With the updates, both parents will be required to share their data.
- Divorced and Separated Parents—If you are divorced, the spouse who takes care of the student the majority of the year will complete the FAFSA. Separated parents don’t have to be legally separated to be treated as divorced couples; but they can’t be living at the same address.
- Single-Sex Couples—The FAFSA now requires that married, single-sex couples must both include financial aid information. If they are not legally married, and only one parent has adopted the child, only that parent will be required to submit financial information.
- Guardians—If a student is living with a guardian, the student is considered independent.
- A Deceased Parent—If a parent dies during the year, you do not have to include his or her financial information.
The instructions are clear on each section, but you should read them carefully to determine which category applies to you and your student.
Getting help
Many parents fear and dread completing the FAFSA. But the truth is it’s just a simple data gathering form. If you need help, however, there is plenty of help available. Use these resources:
- Follow FAFSA on Twitter (@FAFSA)
- Like Federal Student Aid on Facebook where you can ask questions (Federal Student Aid).
- For more information about who needs to complete the FAFSA, here is an excellent resource: Nerd Scholar’s FAFSA Community
Heed this advice: file the FAFSA and file it early. The first eligible student in line for financial aid will be more likely to receive institutional funds. Don’t wait to complete your tax return. File the FAFSA in January and be the first in line.