It’s been a busy holiday season culminating with the availability of the new FAFSA. Let’s just say it’s been anything but seamless for parents and students.
Monitoring Facebook groups, I’ve noticed so many frustrations with the new form. I’m not sure if it’s because it’s new and everyone is not too sure about the simplified format, or the instructions just aren’t clear, which is a distinct possibility. Whatever the case, the questions online are prolific.
My best advice: take it slowly. Read every section carefully and if you don’t understand, search for answers at StudentAid.gov.
From NerdWallet, here are its five most-confusing aspects, and strategies to deal with them — so you can submit your form ASAP.
Financial aid is on the minds of every soon-to-be college student and their families. Will you qualify? How much will you receive? How do you apply? How do the colleges disperse the aid? No matter where you are in the college application process, you should avoid these six financial aid mistakes that could cost you thousands.
It’s exhausting searching and scouring the internet for the right information when it comes to helping your student prepare for college. But what if you could use ONLY ONE RESOURCE and find everything you ever wanted to know about college prep? Wouldn’t that be amazing?
Here it is. I’ve done the research, examined the links and their resources, and compiled a list of 100+ college prep resources for you. (If you know of others, please leave them in the comments and I will add them to the list!)
The FAFSA for the 2022-23 school year will be available on October 1. The earlier you file, the better your chances of getting some of the money colleges allocate for financial aid. In order to help parents understand the FAFSA and answer some of your questions, this week is FAFSA week.
According to a new SallieMae study, 70% of families reported submitting the FAFSA for AY 2021–22. This figure represents the first time in four years that FAFSA submission rates did not decline-last year it was 68%. Low- and middle-income families submitted the FAFSA® at a higher rate than their higher-income counterparts.
Many families believe their income is too high to submit the FAFSA. Most families who didn’t file the FAFSA® said it was because they believed their income was too high (36%). While families earning more than $150,000 annually were most likely to select this reason (74%), 26% of families making less than $150,000 also believed their income is too high to qualify for aid.
Here are the other reasons for not submitting the FAFSA:
Completing the FAFSA® form is the first step to obtaining federal student aid to pay for your college or career school. Follow these eight simple steps for FAFSA filing to set your student up for success and submit the form on time.
For many parents, understanding the FAFSA can be complicated. It’s not meant to be, but as with all government forms, it can be daunting.
The Free Application for Federal Student Aid (FAFSA®) form is the student’s responsibility, but when a student is considered a dependent student for FAFSA purposes, parents have a large role in the application process. Educate yourself about the process and opportunities so you can provide the guidance your child needs to do their part.
This year’s FAFSA changes are mainly cosmetic. The online FAFSA form is receiving a visual update that gives it a similar look and feel that puts it more in line with other tools featured on StudentAid.gov. A new simplified form being released in October of 2022 also has just 36 questions to answer, down from the 108 of previous years.
Noticeable changes you may see if you fill out the FAFSA later this year include:
I will never forget the moment we received our Student Aid Report and I saw the EFC (Expected Family Contribution) on the right-hand corner. I was in shock as most parents are. How could the powers that be believe we could afford to pay that amount for college? It was a mystery to me how they came up with that number, as it is to most of you.
The EFC determines how much financial aid the colleges will award to your student. You can’t receive any federal or institutional aid without getting an EFC when you complete the FAFSA. We are stuck with it and will probably never truly understand how they use to determine how much money your family can afford to pay.
If you are going to need financial aid for college (and who doesn’t?), you will need to understand the EFC.
For many parents, this will be the first year you will complete the FAFSA. Since you have never completed it before, you won’t notice the changes. However, it’s important to note the functionality of the form and the functions of the mobile app.
The Department of Education (ED) released a document this month summarizing the changes to the 2021-22 FAFSA. The most notable changes are the increase of the income threshold for the automatic-zero expected family contribution (EFC) and questions asked about the Schedule 1 tax form.
The 2021–22 FAFSA changes include the following:
The income threshold for an automatic zero Expected Family Contribution (EFC) increased from $26,000 to $27,000 for the 2021–22 award year.
When students and parents use the IRS Data Retrieval Tool (DRT), the IRS DRT will now transfer information about whether they filed a Schedule 1. The answer will be based on all current exceptions for filing a Schedule 1. The transferred data for the Schedule 1 fields will be masked.
For students and parents who don’t use the IRS DRT, the Schedule 1 help topics will be updated to include all current exceptions for filing a Schedule 1. “Capital Gains” has been removed as an exception and “Virtual Currency” has been added as an exception.
Many FAFSA help topics referencing financial forms now feature images of those forms with relevant line numbers highlighted.
In early June, ED published the federal need analysis methodology for the 2021-22 award year in the Federal Register. Per Section 479(c) of the Higher Education Act (HEA), ED is required to annually adjust the income level necessary to qualify an applicant for the zero expected family contribution. This adjustment is made according to increases in the Consumer Price Index (CPI).
New functionalities in the MyStudentAid mobile app will include:
Dashboard – Access various types of popular tasks and a personalized page to help you determine what actions to take.
Settings – Edit/manage your account, using your username and password (FSA ID).
Aid Summary – View your federal student loan and grant history.
Notification Center – View and manage notifications regarding your student aid; household member and enrolled in college calculation assistance.
The paper FAFSA PDF will become available in October, and the color rotation for the paper form is green for 2021-22. FAFSA worksheets in English and Spanish will also be available.
When completing the FAFSA, even though it’s available October 1, it’s generally good to wait a week or two before filing because there will most certainly be kinks in the system–it happens. Don’t wait too long, however. With financial aid, the sooner you apply the better chances you have of snagging some of that free money!
Don’t forget to read the other articles related to FAFSA Week:
If you break it down, the 2021-22 FAFSA isn’t that complicated. Because it’s a federal form (like income taxes), many parents and students are hesitant to tackle it. If you take it step-by-step, it’s much easier. Here’s a synopsis of the requirements and the sections of the 2021-22 FAFSA.
Information you will need to complete the FAFSA
Use this list to gather all the information necessary before you begin:
Your FSA ID, which you can create on fsaid.ed.gov. Note that students and parents will need to create their own FSA ID and keep it private.
Your social security number and driver’s license, and/or alien registration number if you are not a U.S. citizen.
Your federal income tax returns, W-2s, and other records of money earned.
Your parents income tax returns, W-2 forms and 1040 forms if you’re a dependent.
Bank statements and records of investments (if applicable).
At each online step, a “help and hints” box pops up at the side, in case you need guidance. Here’s a short synopsis of each section from CollegeXpress.
Student eligibility
This is pretty basic: the name of your high school, what year in college you’ll be entering, and your parents’ level of education. This is also your chance to opt into federal work-study. Consider saying yes if you aren’t sure; you can always decline later if you change your mind.
You will also be asked if you have registered with Selective Service (the military draft). Nearly all men age 18–26, including undocumented immigrants and people with disabilities, are required by law to register—and if you aren’t registered, you will be denied federal financial aid. You can register via the FAFSA form by checking a box.
School selection
Here’s where you enter the names of the colleges you plan to apply to. You can add as many as 10, but don’t worry if you haven’t finalized your list. If you want to add another or make changes, you can do it later.
For each school you include, you will be asked if you plan to live on campus, off campus, or with your parents (because you won’t need funds for room and board if you will live at home). For state aid, some states require that colleges are listed in a specific order; check the federal aid website to see if your own state is fussy about this.
Dependency determination
Colleges want to know if your parents support you or if you are an independent adult. The vast majority of high school students are considered dependent for college financial aid/FAFSA purposes. However, you’re generally considered an independent student if you are:
24 years old by December 31 of the award year
A graduate or professional student during the award year
Married (or separated)
A parent or have other dependents who currently receive more than half their support from you
An orphan or a ward of the court
A veteran of the US Armed Forces
Otherwise, you are most likely a dependent student.
If your family situation is complex (for example, you are a minor but don’t live with your parents or don’t have access to their financial information), you can find some guidance on the federal student aid website.
Parent demographics
You fill this FAFSA section out if you are a dependent. Aid decisions will consider your parents’ age (because older parents may need to conserve more for retirement), how many children they support, and, most important, if they will have additional children in college that year. Each of these elements affects the calculation for your Expected Family Contribution (EFC), so answer the questions carefully. For example:
Older parents are expected to contribute less since they are closer to retirement.
Parental contribution is divided by the number of students in college.
If the parents are divorced or separated, include only the financial data of the parent with whom the student lives for the greater part of the 12 months preceding the date of the application. If that parent has remarried, the student must include that stepparent’s income and asset data as well. Note: some colleges request information on the “other” natural parent and may expect a contribution from that parent as well.
Financial information
You will need to fill in your parents’ adjusted gross income from the 1040 form, or whichever form they file. (Or your income, if you are independent.)
The IRS Data Retrieval Tool really shines with this part of the FAFSA, because it transfers your tax information directly to the form, saving time and eliminating the chance of a mistake.
You’ll also be asked about assets—both your parents’ and yours. That’s right: the money you’ve saved from summer jobs, birthdays, or bat mitzvah gifts—all of it is fair game. And your colleges will expect you to contribute a percentage of your savings to your college tuition.
Of course, your parents will need to report their savings and investments too, including money market accounts, mutual funds, 529 college savings accounts (yours and any siblings’), and investment real estate (not your family’s primary home).
Qualified retirement accounts—IRAs, 401(k), 403(b), or pension plans—aren’t counted as assets. As always, you can find guidance in the pop-up help boxes at the right side of the page.
Sign and submit
After you’ve finished the FAFSA’s financial section, you add your electronic signature with your FSA ID and hit submit. That’s it.
For a visual step-by-step guide to completing the FAFSA, follow this link:
