The 2018-2019 FAFSA opened October 1st, 2017.
Five Reasons to File Your FAFSA
Submitting your Free Application for Federal Student Aid (FAFSA) can be a complicated process. From digging through information on your family's assets to decoding income tax forms, filling out the FAFSA is a hassle, so why bother? Here are five reasons why it's worth it.
1. Federal Aid
Do you want some of the more than $80 billion the federal government provides in grants, loans and work-study programs every year? Federal Student Aid programs are the largest source of student aid in the United States. The only way to be considered for Pell Grants, Perkins Loans, Stafford Loans and more is by submitting your FAFSA.
2. State Aid
Your FAFSA also puts you in consideration for state financial aid programs. Eligibility and deadline dates for these programs differ by state, but they all have one thing in common -- they require the FAFSA.
3. School Aid
Colleges and private scholarship sponsors offer billions of dollars in financial aid. Even if you don't have a high level of financial need, you may be eligible for these awards. Most colleges and many private scholarship sponsors require students to submit their FAFSA to be considered for financial aid. Some school and private scholarship programs are specifically designed for students who were rejected for federal financial aid, so even if you don't think you'll qualify for federal aid; it's a smart move to submit your FAFSA.
4. It's Free
A completed FAFSA will put you in consideration for federal, state, college and private scholarships and it's completely free. The only thing you'll spend completing your FAFSA is a few minutes of your time, and you could get thousands of dollars of financial aid in return.
5. Getting Help is Easy and Free
Not only is submitting your FAFSA free, but it may be easier to complete than you realize. You can get the paper FAFSA form at your school counselor's office or public library, print it off from the FAFSA Web site, or fill it out online. Don't know how to figure out your parents' net worth? Don't worry. When you complete your FAFSA online help is built into the system, so you won't get bogged down by the form's confusing financial jargon. You can still submit your questions online at the FAFSA Web site ( www.fafsa.ed.gov ) if you choose to fill out the paper form, or you can call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).
Federal, state and private financial aid can be within your reach when you submit your FAFSA, so what are you waiting for? FAFSA forms become available on or before October 1st. Submit your FAFSA as soon after October 1st to have the best shot at financial aid.
Don't just send in your FAFSA and expect the money to start rolling in. Many financial aid programs require additional forms besides the FAFSA, so check the requirements for state, school and private awards to make sure your application is complete.
The FAFSA - Step One for Financial Aid
Kay Peterson, Ph.D.
Applying for financial aid is easier than you think. Your first stop: the Free Application for Federal Student Aid (FAFSA). For many schools, this is the only form you need.
What is it?
The FAFSA is the form the federal government uses to determine your eligibility for federal assistance (loans, grants, work-study appointments and some scholarships). Schools also base their financial aid packages on the FAFSA. And, as the name implies, the FAFSA is completely free.
Using the information you supply on the FAFSA, the federal processor determines your Expected Family Contribution (EFC) - the amount of money you and your parents will be expected to contribute to your college costs. Your school then applies an equation to decide how much financial aid you'll need. Your EFC is subtracted from the school's Cost of Attendance (COA) to calculate your Financial Need.
Cost of Attendance
Tuition, fees, room and board, books and supplies, travel and incidental expenses
Expected Family Contribution
Amount of money your family will be expected to contribute
Amount you will need to go to school
The school tries to meet your need through a financial aid package made up of funds from federal, state, school and private sources as well as loans and student employment.
You should submit a FAFSA every year you need aid - even if you think you don't qualify for financial aid. Your eligibility can change from year to year, especially if there are changes in your family's circumstances. Also, being rejected for federal aid is sometimes a prerequisite for receiving private awards.
When should I apply?
The new FAFSA form becomes available each year on or before October 1. Submit your application as soon after October 1 ASAP. At many schools, funds are limited; if you submit your FAFSA too late, they won't have any aid left for you!
Your school may require additional forms besides the FAFSA or an earlier submission deadline. Contact your school's financial aid office to learn about requirements for your school.
How do I file the FAFSA?
You can file a FAFSA by:
- Visiting the FAFSA Web site and filing the form online. ( www.fafsa.ed.gov )
- Calling and requesting a paper form at 1-800-4-FED-AID (1-800-433-3243, TTY 1-800-730-8913) from 8:00 a.m. to 8:00 p.m. Eastern Time, Monday through Friday.
If you have any questions about the FAFSA or federal student assistance programs, call the Federal Student Aid Information Center at the above number. You can also submit questions through the FAFSA Web site.
What happens next?
After you file your FAFSA you'll receive your Student Aid Report (SAR). It's a summary of the financial aid you can expect to receive and your official record that the federal processor received your FAFSA.
If you submitted a FAFSA online, or included your email address on your paper FAFSA, you should receive your SAR in one to two weeks. Submit a paper FAFSA and you'll receive your SAR in four to six weeks.
The federal processor will send a copy of your SAR to the schools you listed on your FAFSA. Once you've received your SAR:
- Carefully review to make sure all the information is correct. If there are any errors, you can correct them online if you completed your FAFSA on the Web. Otherwise, call your school's financial aid administrator or the Student Financial Aid help desk at 1-800-433-3243 to ask how you should make corrections.
- Note your Data Release Number (DRN). It's the four-digit number located on the lower left corner of the first page of your SAR. You will need it to apply to additional schools.
- Check to see if your SAR has been selected for verification. If you have been selected, there will be a notification in the text of your SAR. About 30 percent of FAFSAs are randomly selected for verification.
If selected, you will be asked by your college financial aid administrators to provide more information. Be sure to respond as soon as possible. Your aid offer may be delayed until the materials are received - which may leave you without aid if funds have already been allotted.
If you do not receive your SAR within four to six weeks, call the federal processor at 1-800-433-3243. Be ready to provide your Social Security Number and date of birth for verification. Do not submit another FAFSA form.
Filling out your FAFSA is the first step toward receiving financial aid. Start early, follow these steps and you may find that financing your college education is easier than you thought!
Quick Tips for Filing Your FAFSA
Filling out the FAFSA can be tricky. Keep these tips in mind and you shouldn't have any problems.
- Use your legal name as it appears on your Social Security card. Nicknames or aliases will cause a processing delay.
- Read the questions carefully. The words "you" and "your" on the FAFSA always refer to the student, not the parents.
- To be considered a veteran, you must have served on active duty and been discharged under other than dishonorable conditions. If your service was only for training purposes (e.g. National Guard or Reserves, or ROTC), you are not considered a veteran for your federal financial aid application.
- Remember to count yourself, the student, as one of the people in your household who will be a college student during the award year.
Your Parents and the FAFSA
- If your parents are divorced or separated, the parent with whom you lived the most during the past 12 months is the parent responsible for filling out the FAFSA. This is not necessarily the parent who has legal custody.
- If the parent responsible for completing the FAFSA has remarried, the new spouse must report their income and assets on the FAFSA. Prenuptial agreements have no bearing on this requirement.
- A legal dependent is a person for whom you provide and will continue to provide more than half of their support. Support includes money, gifts, loans, housing, food, clothing, automobile, medical and dental care, and payment of college costs. If you have a child who is supported by your parents or someone else, you should answer "no" to the question that asks about legal dependents other than a spouse.
- If you have an unborn child who will be born before or during the award year (July 1 through June 30) and will be your legal dependent, that child should be counted as a member of the household.
Given the Option
- In the question that asks about your interest in different types of aid (e.g. work-study and student loans), answer "yes" to each question. Answering "yes" does not obligate you to accept a loan or work-study position, nor does it guarantee you'll be offered either. Answering "no" to these questions will not get you more grant aid.
- Even if you qualify for the simplified needs test, you should still complete the asset information section of the FAFSA. Some states and schools use this information for computing their own financial aid awards.
- By submitting the FAFSA, you give permission to release your information to the state aid agency. You cannot apply for financial aid without releasing this information.
What Counts as Income?
- The Earned Income Credit is considered "untaxed income" on the FAFSA. Other types of untaxed income include retirement plan contributions made during the year and military food and housing allowances.
- Taxable earnings from work-study jobs as well as any grant or scholarship monies that were reported on your income tax return are counted.
- Prepaid tuition plans are not reported as assets on the FAFSA.
Before You Submit Your FAFSA
- Whether filing online or off, sign the form (you'll use your PIN online) and get all the other required signatures. If you don't sign the form, you will receive an SAR, but you will not receive aid.
- Do not include anything with the form when you mail it; any enclosures will be destroyed. Likewise, do not write comments or notes in the margins of the form. If there are unusual family financial circumstances, you should contact the school's financial aid administrator to ask for a professional judgment review.
- Make a copy of the form before mailing it. You can print out your online FAFSA before you submit the application.
- Submit the form on time.
If you don't understand a question or are having trouble filling out the form, call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).
Paying for a college education can be financially taxing. Fortunately, the Treasury Department has set up the Hope Scholarship Credit and Lifetime Learning Credit for students and their families. These credits can help soften some of the impact that higher education can have on the family budget.
Tax Credits: How Much Can You Save?
Unlike scholarships that reduce tuition payments or tax deductions that work to reduce your taxable income, tax credits simply reduce the amount of tax you're obligated to pay.
Here's how each of the credits work:
- With the Hope Scholarship Credit, a student or a student's family can deduct 100 percent of the first $1,100 spent on tuition and other qualified expenses, plus 50 percent of the next $1,100, for the first two years of post-secondary education. If you pay $2,000 or more for tuition, you can receive the maximum credit of $1,650.
- With the Lifetime Learning Credit, a student or a student's family can receive a tax credit of up to $2,000 for educational expenses. The amount of the credit is equal to 20 percent of the first $10,000 of tuition and related expenses.
With both credits, the amount of your credit is based on your overall tuition costs. For example, if you are eligible for a Lifetime Learning Credit and paid $2,000 for tuition, you'd receive a $400 credit on your taxes (20 percent of $2,000 equals $400).
Keep in mind that each eligible student can be claimed on only one tax return - so the parents can file for the credit, or the student can file for the credit, but not both.
With both credits, there are limits based upon your family's income. Joint filers with an adjusted gross income between $90,000 and $110,000 and single filers with an adjusted gross income between $45,000 and $55,000 are eligible for reduced credits. Filers with incomes over $110,000 (joint filers) and $55,000 (single filers) are not eligible to claim either credit.
Eligibility for the Hope Credit
The Hope Scholarship Credit gives a tax break for the first two years of college or vocational school. The student or the student's family can claim the Hope tax credit if:
- The student is in the first two years of post-secondary education (usually freshmen and sophomores in college).
- The student is enrolled in a program that leads to a degree, certificate or other recognized educational credential and is taking at least half of the normal full-time workload (i.e., students taking one or two classes that don't lead to a degree aren't eligible).
- The student has no felony conviction for possessing or distributing a controlled substance.
You can claim the Hope Scholarship Credit for your student for two years only. After that, your student is only eligible for the Lifetime Learning Credit.
Eligibility for the Lifetime Learning Credit
The Lifetime Learning Credit also gives tuition-paying families a break. Here's how it differs from the Hope Scholarship Credit:
- With the Lifetime Learning Credit, there is no minimum enrollment (students can be taking only one or two classes), and students needn't be enrolled in a program leading to a degree or certificate. The Lifetime Learning Credit can apply to classes that upgrade job skills as well as academic courses in a degree program.
- The Lifetime Learning Credit applies to all students in all years of their college education.
- Graduate-level work is eligible.
- This credit is based on the total amount of tuition paid, regardless of the number of students.
As long as your student maintains eligibility, there is no limit to the number of years you can claim the lifetime learning credit.
Which Credit to Claim
You can claim either the Hope Scholarship Credit or the Lifetime Learning Credit, but you can't claim both in the same tax year for a single student. You can claim the Hope credit for the first two years of a student's college education and then the Lifetime Learning Credit for later tax years.
If multiple members of a family are currently attending college, you may be able to make use of both credits simultaneously, but special restrictions apply:
- You can apply multiple Hope Scholarship Credits -- that is, one for each eligible student in your family -- provided all eligibility requirements are met. For example, if your family has two children in their first two years of college, you may apply two Hope Scholarship Credits.
- It's a little trickier for the Lifetime Learning Credit. Even if more than one student in a family is eligible for the Lifetime Learning Credit, the maximum you can deduct is $2,000 -- the maximum amount of one Lifetime Learning Credit. That's because this credit is based on the total amount of tuition paid by the household, rather than the number of students in the household.
- And finally, you may apply both for Hope Credits and a Lifetime Learning Credit as long as you're applying on behalf of different students.
A family has two children enrolled in college, one is a freshman, one a junior. The family can claim a Hope Scholarship Credit for the freshman and a Lifetime Learning Credit for the junior.
But let's complicate matters by adding another sibling who's a senior in college. In this case, the family is still eligible for a Hope Scholarship Credit and only one Lifetime Learning Credit.
One final example: Let's say that a family has four children in college: two freshman, a junior and a senior. Now the family can claim two Hope Scholarship Credits, but still only $2,000 (the maximum deduction) for one Lifetime Learning Credit.
To learn more about the Hope Scholarship and Lifetime Learning Credits check IRS publication 970: Tax Benefits for Education at irs.gov which contains more details about these credits and other available deductions.