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Most Frequently Asked Questions about the FAFSA

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 Filing the FAFSA can be a confusing process, but never fear! Our college financial expert, Frank Palmasani, has the answers to your most pressing questions.

What is the FAFSA and what does it do?

The FAFSA is the official document used by the federal government to calculate your Expected Family Contribution (EFC). This EFC number is used by colleges to determine your eligibility for all need-based programs, such as federal grants, work-study employment, and student loans. It is also used by many state agencies to calculate your eligibility for state grants and by colleges to calculate your eligibility for college need-based grants.

What is your EFC? How is it calculated?

The EFC, or Expected Family Contribution, is not what you can afford and it is not what you pay the college. Rather it is a number that determines your eligibility for programs. Generally, the lower your EFC, the greater your student’s eligibility for these programs.

What is considered a high or low EFC?

If a family's EFC is lower than 6,000, they would likely be eligible for a Pell Grant. If the EFC is higher than the Cost of Attendance of the desired college, it would be considered a high EFC, and need-based programs would not be available to those families.

Is it mandatory to complete the FAFSA?

It is not mandatory but it is highly recommended. Even if a family does not anticipate being eligible for grant money, their student will need to file the FAFSA if the student plans to borrow money to pay for college or work on a college campus.

What are all the items I need to gather up prior to sitting down to file the FASFA?

You will need to gather information for the Parent’s Adjusted Gross Income: each working parent’s wages, the amount paid in federal taxes, and finally, the amount held in savings and investments in the reported categories. All of this information should be compiled for the student as well.

What is included as taxable/non-taxable income?

Taxable income is automatically listed in the question on adjusted gross income. Untaxed income can be a number of things, but it is primarily child support or voluntary contributions one makes (in the current year) to a program at work that reduces taxable earnings like a 401k, 403b, etc.

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Check out the Financial Fit program for step-by-step guidance!


What assets should be reported on the FAFSA?

You should report all savings and investments except the value of retirement plans, the equity of one’s home, or the value of a business if there are less than one hundred employees.

What is a PIN number? Do parents need to have their own?

The student must have a personal identification number to sign the FAFSA and one parent must have a personal identification number with which to sign as well. These PINS can be obtained in advance of filing at

Do your 2013 taxes have to be filed before submitting the FAFSA?

No, you can file the FAFSA using estimates based on your 2012 return. However, once your taxes are complete, you should return to the document and change those estimates to the actual values from the return.

Is it possible to structure one’s finances so as to get the most advantageous FAFSA result?

Not likely. Most of the EFC is driven from income. Income is as reported on the tax return. Some of the EFC is determined from assets and, of course, assets are controllable. You can position your assets however you want before you file the FAFSA. There are certain types of assets that do not get reported on the FAFSA. These assets are the equity of one’s home and the value of retirement plans.

How does the FAFSA filing process differ for separated or divorced parents?

The key to the separated and divorced situation is identifying who the student lives with most of the time. Once this is determined, it is then the responsibility of the family to include all of the income and assets from that household only.

Let me show you an example. Let’s assume that I am divorced and my daughter (the student) lived with me for more than six months during the last twelve-month period. If I had remarried, the income and assets that I would report would be mine, my new spouse’s, and my daughter’s—not those of my daughter’s mother. If I did not re-marry, it would be mine and my daughter’s only.

How does having multiple children attending college at the same time affect the FAFSA-filing process and results?

It will lower the family’s EFC number. Each student files the FAFSA and on the document a question appears regarding the number of people in your family attending college. Thus, if there are two students in college, the EFC number will be reduced by almost 50 percent for each.

Everyone can afford college—that’s right, everyone!

Check out Right College, Right Price for expert advice on affording your student’s education (without the stress)!


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Tagged in: EFC FAFSA Financial Aid

Frank Palmasani is a Chicago area high school guidance counselor and former college director of admissions, and creator of Financial Fit. In 1985, Palmasani began delivering seminars on the college financial aid and planning process, and estimates that he has reached more than 200,000 people through his talks. He is a member of NACAC, IACAC, and the College Board. Palmasani has been featured in the Boston Herald, the Chicago Tribune, Yahoo! Finance, WGN-TV, WTTW-TV, CBS’s Monsters and Money in the Morning, and is the author of the forthcoming book Right College, Right Price (Sourcebooks, January 2013).

Palmasani is the founder of Financial Fit, which you can find in the College Countdown bookstore.