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What Is Financial Aid?

Not sure what the FAFSA is? Learn more about what it is and how to fill it out from Frank Palmasani

If you’re a parent of a college-bound high school student, you might have heard about the FAFSA. The FAFSA can be a little confusing, but since it determines your child’s eligibility for financial aid, it’s important that you understand what the FAFSA is and how to fill it out.

What is the FAFSA?

The FAFSA—Free Application for Federal Student Aid—is a form that you file with the federal government to be considered for financial aid.

The FAFSA is used to calculate your Expected Family Contribution, or EFC number. It’s important to note that the EFC is NOT what your family will pay for college; the EFC is simply a number that colleges use (along with information from your child’s application for admission) to develop financial aid award letters. The award letter—which lists eligibility for scholarships, grants, student loans, and campus employment options—allows you determine the official net price of each college.

How to file the FAFSA

Some people think that filing the FAFSA is complicated, but you just need to understand the process.

You can file the FAFSA online at fafsa.ed.gov or in paper format. The paper version isn’t easy to find, so you might need to have your child check with their high school guidance office for more information.

In addition to basic demographic information, the financial information required on the FAFSA can be divided into four parts:

  1. Parent income information—adjusted gross income and untaxed income
  2. Parent asset information—savings and investments, except the equity of your home and any retirement plans
  3. Student income information—adjusted gross income and untaxed income
  4. Student asset information—savings and investments, except the equity of your home and any retirement plans (if applicable)

Your family should file the FAFSA even if you don’t think you’ll qualify for financial aid, because you might be surprised. In 2011, about 1.7 million students didn’t file the FAFSA, but in fact, 1 out of 3 of those students would have qualified for a Pell Grant1—that’s free money! You don’t want to leave any financial aid money on the table, so it’s better to file the FAFSA even if you don’t think you’ll get anything.


Need more FAFSA help?

Get a screen-by-screen FAFSA walkthrough with this free video: How to Fill Out the FAFSA Application for 2014–2015 by Frank Palmasani.

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When to file the FAFSA

The FAFSA for the upcoming academic year is available starting January 1. You’ll need to file the FAFSA after January 1 during your child’s senior year of high school and then again each year they are in college.

You’ll need to use information from your tax return while filing the FAFSA. Since a lot of people don’t file taxes until March or April, you have a couple options for filing the FAFSA.

If you file your taxes by mid-February, I suggest you wait to file the FAFSA until after you’ve completed your tax return, using your actual tax information. However, if you plan on filing your taxes after mid-February, you should file the FAFSA in January using estimates and then update your FAFSA upon completing your taxes. If you use estimates, you must update your information after filing taxes.

Get videos and worksheets to help you file the FAFSA, plus a full overview of the financial aid process, including how to file appeals, with the Financial Fit® program.

learn more about the financial fit program


About the Author

Frank Palmasani has helped families work through the college financial aid system for more than 30 years. He is committed to helping all families create a plan for finding the right colleges, without taking on mountains of debt.

Frank Palmasani is the creator of the Financial Fit® program and the author of Right College, Right Price.

Source:

1: “Reasons Why Students Do Not File the FAFSA.” Mark Kantrowitz, FinAid.org. January 2011.