[Length: 10 Minute Read]
In the previous getting started FAFSA resource, we walked you through the key reasons why you want to fill out the FAFSA form each year for your college student(s), and how getting an FSA ID was a key first step to fill out the FAFSA itself. If you’re planning on filling out the FAFSA and haven’t gotten your FSA ID yet, make sure you visit the getting started FAFSA resource to see how to do that!
In this week’s post, weI want to walk through the FAFSA form application so you can see what to expect as you begin the application process with your student. Since every family’s situation is different, I’m not going to dive into every single question you may have. The FAFSA site has a nice instruction guide that you can reference as you go through the FAFSA application.
Quick Note on the CSS Profile
In getting ready for college you may come across another form called the CSS Profile. CSS stands for “College Scholarship Service.” I’m not going to go through the process of filling out a CSS Profile here, but want you to be aware of it.
The CSS Profile is basically a more in-depth version of the FAFSA form that digs further into your financial situation. If your student wants to apply to a school that requires a CSS Profile, they will have to fill out both a FAFSA form AND a CSS Profile.
What schools require a CSS Profile? If your child plans on applying to any of the schools on this list, then they will also have to fill out a CSS Profile. Check with each school to see what their specific rules are.
Note: The information below is as of October 1, 2020. If the Education Department makes any changes to the FAFSA application process, we’ll endeavor to also update the information provided here.
- FSA ID Website: https://fsaid.ed.gov/npas/index.htm
- Federal Student Aid Resources: https://studentaid.ed.gov/sa/resources
- FAFSA Site: https://studentaid.gov/h/apply-for-aid/fafsa
- FAFSA “Who is my Parent?” Infographic
- FAFSA Help Line: 1-800-4Fed-AID (1-800-433-3243)
Getting Started With The 2021-2022 FAFSA
The 2021-2022 FAFSA season begins on October 1, 2020. I suggest getting this done as soon as possible (i.e. in October) so your student can focus on filling out college applications. By filling out the FAFSA early, you may also become eligible for school-specific grants that are made on a first come, first serve basis.
Here is a general list of what you will need when you fill out the FAFSA. Given it can take upwards of one hour to complete the form, I suggest gathering all this data before you start the FAFSA process.
- Student & Parent Social Security Number
- Student & Parent’s 2019 Federal Tax Returns (see below…can electronically import as well)
- Bank statements for parents & students (checking, savings, and CD accounts)
- Investment account statements for parents & students (mutual funds, stocks, and bonds)
- Value of any real estate owned, other than your primary home
- Value of UGMA & UTMA accounts
- Value of 529 Savings accounts
- FSA ID of parent & student (see here for how to get your FSA ID)
- A list of the schools your student wants to apply to
Note what financial information is NOT needed:
- Retirement accounts (IRAs, Roth IRAs, 401k, 403b, etc)
- Cash value life insurance
- Equity in your primary home
Where to Apply
Every year the Federal Government changes the application process a bit. In the last couple of years, they’ve launched apps that allow you to fill out FAFSA on an iPhone/iPad or Android device. We haven’t tested these apps yet. The instructions below are for the web-based FAFSA application.
3 Ways to Fill Out FAFSA:
Step 1: Logging in
When you go to the website, make sure you click “Start Here” under the “New to the FAFSA Process” heading, even if you’ve filled out FAFSA in prior years.
Once you’re in, the system will ask you some basic information about your student and their FSA ID and password. It’s best to have your student with you as you get logged in, even if you’re going to fill the FAFSA out for them.
Step 2: Create a Save Key
Step 3: Entering Student Information
Note! All information you see on these screenshots is using dummy names, Social Security numbers, and other information, all of which are provided by the Department of Education for the sole purpose of being able to see the FAFSA process. No one’s personal information is being compromised here!
The first thing you’ll need to fill out are “Student Demographics.” This will be done on a series of screens as you click Next. Remember, all of the information you’ll provide is for the STUDENT, not you, the parent.
- Name & Date of Birth
- Email Address & Phone number
- Home address and state of legal residence
You’ll eventually come across the screen above where you have to fill out basic school information. The data shown above is for students going to college for the first time.
As you continue to click next, you’ll be asked for:
- Gender (Selecting “Male” will bring up another question whether your Student is registered in the Selective Service System)
- Drivers license
- Parent’s highest level of education completed
Once you’ve entered all this information, hit “Next” and it will save your application and bring you to the School Selection tab.
Step 4: Enter School Selection
First thing you’ll do in this section is fill out your student’s high school information. Enter the information and click “Confirm” to search for their school.
Next, you’ll start selecting the colleges you want your student’s FAFSA information sent to. You can enter up to 10 colleges on this application. If you want to send to more than 10 schools, there are instructions for how to do so.
You can either search for each school directly in the FAFSA application, or you can enter the school code directly, if you know it.
As you select each school, the FAFSA system will ask you about your student’s housing plans.
After selecting schools, you’ll be asked to provide more demographic information on your student. These questions will determine whether your student is considered dependent or independent. In almost all situations, your student will be deemed dependent.
- Marital status
- Dependents of the student
- Military service or family situations
Once a child is deemed to be Dependent, they’ll be asked to provide parent information.
Step 5: Parent Information
When you start entering parent information, the first question that will be asked is about marital status. For students with divorced parents, they’re going to have to choose who’s parental information will be provided (i.e. the father or the mother.)
Be careful here, if you’re divorced. The parent information provided will be the financial information that’s used to determine financial aid for the student. If one parent makes a lot more than the other parent (especially if they remarried), then it may make sense to enter the information of the lower-earning parent if that parent is in fact providing care for the student. We’ve seen students lose out on financial aid because they entered the information of a high-earning parent, even though that parent wasn’t responsible for day-to-day care for the student.
After the Marital Status questions there will be a series of questions regarding the parent(s).
- Social Security Number
- First Name, Last Name, Date of Birth
- Email address
- State of residence
- Household size, including the total number of kids that will be attending college in the 2021-2022 school year.
Step 6: Parent & Student Financial Information
When it comes to determining financial aid, FAFSA looks at the parent and student income data from two years prior to the school year being applied for. So for the 2021-2022 school year, FAFSA will look at income from the 2019 tax year.
This is particularly important this year because the Federal income tax deadline has been extended due to COVID-19. While the ‘official’ deadline was moved from April 15 to July 15, 2020, any family that filed an extension has until October 15, 2020 to file their 2019 taxes. If you haven’t filed your 2019 taxes yet, you’ll have to stop here and pick up the FAFSA application after they’re filed.
If you’ve filed your taxes for 2019, you’ll be able to have the FAFSA system retrieve your information directly from the IRS, as seen below.
To link to the IRS, you’ll have to use the FSA ID and password of the parent that set it up.
If you don’t want to directly link to the IRS, you’ll have to fill out the income information yourself, so it’s a good idea to have your tax return with you.
After you’re done filling out income information, you’ll be asked for more detailed financials, such as cash savings and other assets. As opposed to the income information, which was based on 2019 data, all your cash savings and other asset values will be entered as of today.
Two special notes for the second item (net worth of parents’ investments, including real estate)
- Do NOT include the value of your primary residence (i.e. the home you live in regularly)
- If you own real estate other than your primary residence, the Net Worth of that asset is calculated as follows: Value of Real Estate MINUS any Mortgages or Debts against that same property. Click the blue question mark for more information.
After filling out this information for the parents, you’ll be taken to the exact same screens to enter the student’s financial information.
Step 7: Sign and Submit
You’re almost done! After financial information for both the parent(s) and student is filled out, you’ll be taken to a screen with a summary of all the information you provided. Look it over and make sure it’s correct.
Once you confirm everything, both the parent and the student will have to sign it using each of their FSA IDs and passwords.
Finally – You’re Done!
By filling out the FAFSA, you’ve just opened the door to receiving financial aid for your college-bound student. Remember, even if your income and assets are too high to receive help, you may still be eligible for school-specific grants that are given out on a first come, first serve basis.
For parents with multiple children in college, please note that you’ll have to fill out the FAFSA for each child. The good news is that FAFSA will consider the fact that you’re sending multiple kids to college when determining any needs-based financial assistance.
Content Disclaimer: This information is subject to change if/when the Education Department makes any updates to the FAFSA application process.
Wondering how this affects your investments? Schedule a call with Financial Design Studio to discuss your portfolio today.