Show me the Money

It is almost October 1st which in college admissions means it is nearly time to start filling out any financial aid forms you need.  For those less familiar with the financial aid process, October 1 is the first-day families can access, complete, and submit the 2022-2023 FAFSA (The Federal Application for Free Student Aid) and CSS Profile. Anyone logging in sooner will be completing forms for the wrong school year.

If you are applying for need-based financial aid, you will need to fill out a FAFSA and possibly a CSS Profile for all schools where your child is applying. Please complete the FAFSA as close to that time as possible. From the official blog of Ed.gov: 

If you want to get the most financial aid possible, fill out the FAFSA form ASAP. Some financial aid is awarded on a first-come, first-served basis, and some states and colleges run out of money early.  Even if it seems like your school’s deadline is far off in the future, get your FAFSA form done ASAP. The 2022–23 FAFSA form requires 2020 tax information, which you should already have—so there’s no excuse to wait!

Let’s start with what you will need for FAFSA. In most families that we deal with, children are dependents of their parents. We will assume you are, too, and if you are not reaching out, we can discuss how the process will change for you. 

Let’s gather what we need. You and your parents will need your SSN, your Driver’s License, and your current list of schools that you are applying to. Put every school that you think you are applying to at this point. If you do not end up applying to a school on the list, it is not a problem. It is also possible to add a school later, but it is easier to put all of them now rather than add. Colleges do not see any other schools you put on the list.

Parents and Students, please sit together to fill out the FAFSA, and please set aside about an hour. In cases of separation, divorce, and non-traditional families, it may be unclear who should be listed as the parent on the FAFSA. Here are the rules: studentaid.gov/resources/fafsa-parent-text

Go to https://studentaid.gov/fsa-id/create-account/account-info. To log in, student and parent must each create their FAFSA IDs. Students must create their accounts first. These IDs will consist of usernames and passwords that you use to log onto all Federal Student Aid websites like FAFSA or StudentLoans.gov. They will also serve as your legal electronic signature. They also allow you to save the FASFA and log in and out as many times as you want. Please keep your FAFSA IDs safe, private, and accessible. 

Once you have a Parent FAFSA ID and a Student FASFA ID you can go to the FAFSA website (https://studentaid.ed.gov/sa/fafsa) and click Start Here. 

At this point, BOTH parents and students need to fill out the FAFSA. 

The forms are similar and will consist of these parts: Student Demographics, School Selection; Dependency Status; Parent Demographics, and Financial Information. For Financial Information, it is easiest and fastest to use the IRS Data Retrieval Tool. This will automatically populate many of the FAFSA's questions directly from the federal tax returns, making completion more straightforward. Under recent Department of Education guidelines, these populated fields are shielded from the filer, though the financial aid offices will be able to view the numbers. If the DRT is not selected, financial aid offices will most likely request further verification from the filer that the numbers they have entered agree with their tax returns. In certain circumstances, a filer will be ineligible to select the DRT. Here are the rules: studentaid.gov/help/irs-drt-eligibility

Next, you must sign the forms and submit them. Remember your FAFSA ID serves are your legal electronic signature. You will receive an electronic confirmation. 

Usually, within a few hours of submitting the FAFSA, the student will receive an email that it has been successfully processed. Within a few days after that, they will receive another email containing instructions on accessing their Student Aid Report (SAR). The SAR has a crucially essential number-the Expected Family Contribution(EFC). Parents overseeing the process should tell their children to forward all Department of Education emails to them, which may also include requests for further verification and documentation.

Here are a couple of other things to know.

• For families who do not want to apply for need-based aid but want to use the federal student loan program, the FAFSA will need to be submitted. My recommendation for these families is to check "no" on the college application, asking if the student expects to apply for need-based aid, to deposit at the school of their choice by May 1, and then submit the FAFSA letting the financial aid office know that it was submitted for federal student loans only. This way, there is no confusion over whether the student is or is not applying for need-based aid.
  

• For families applying for need-based financial aid, the annual limit of federal student loans is usually included in the financial aid award. However, a few schools have replaced these with additional institutional grants. For dependent undergraduate students, these limits are $5,500 for first-year students, $6,500 for sophomores, $7,500 for juniors, and $7,500 for seniors. For those taking longer than four years, this $27,000 4-year total undergraduate loan limit increases to $31,000. For those borrowing for the current school year, the interest rate is 2.75%, and the fee is about 1%, making this a top choice for those who want to borrow.
  

If you are interested in merit aid, a few institutions require the FAFSA and possibly the CSS Profile to be considered. There is no reliable list of these schools. It is the student's responsibility to learn from the school's website or directly from the admission office if they require any additional forms for merit aid consideration.

Lastly and very important. Students must check financial aid deadlines at all the colleges where they are applying. It is crucial that they are submitted before the earliest financial aid deadline. If a student is applying in the early decision or early action round, that could be as soon as October 15th. Missing a financial aid deadline can seriously jeopardize a student's eligibility for aid.

Stay tuned for Part 2 of this Financial Aid blog on the differences between FAFSA and CSS Profile.