Common FAFSA mistakes to avoid

Common FAFSA mistakes to avoid

    The purpose of the Free Application For Student Aid (FAFSA) is to determine a student’s eligibility for federal aid. 17.6 million students submitted the FAFSA in 2021, of which 10.6 million successfully secured financial assistance. To break this down further, 6.2 million students received an average of $4,220 in pell grants, and 6.8 million got an average of $9,100 in direct subsidized and unsubsidized loans.

    On the 2020-21 FAFSA, applicants completed their forms in an average of 35 minutes 12 seconds. However, the amount of detailed information required increases the likelihood of filling something out incorrectly. When completing the FAFSA, remember that a single error could spell the difference between aid and no aid. Don’t miss out on a scholarship or grant by making these common FAFSA mistakes.

    Not filling out the FAFSA

    If you’re asking yourself “do I really need to fill this thing out,” the short answer is yes – if you want to receive financial aid. The FAFSA is your portal to applying for several federal student-aid programs, hundreds of state aid programs, and most other forms of grants, scholarships, and institutional aid.

    Scott Bennett, Associate Vice President of Student Services at Lee college, says:

    “Millions of dollars are left on the table each year because students don’t complete the FAFSA. Some students avoid it because they don’t think they will qualify for aid due to their parents’ income or their own. Others are reluctant to take out loans – it is a common misconception that all financial aid is loans. There are also students who fear the application itself. However, the process has been simplified over the past few years, and many schools hold events or have personnel who assist students and parents in completing the form.”

    » Read: Why is financial literacy important for college students?

    When is the FAFSA deadline?

    The FASFA application period opens in October for the upcoming aid year and closes at the end of June. This is not the time to procrastinate. You might lose out to the students who submitted their application earlier, so the sooner you get it in, the better. Remember, the form needs to be submitted ahead of each academic year.

    Falling for a FAFSA scam

    First, make sure you are using the official FAFSA website. There are many financial aid scams out there, and unofficial FAFSA sites designed to steal your data are among them. Before filling in the form, double-check you are using the official channel.

    Neglecting to create an FSA ID

    Although not required, creating an FSA ID can be helpful. This makes it easier to add a signature and allows applicants to prefill the form with the previous year’s settings, which can save time and minimize mistakes. To get an FSA ID, create a federal student account.

    Not giving permission for the IRS data retrieval tool

    When completing the FAFSA you will be asked if you want to use the IRS data retrieval tool. The tool automatically retrieves your tax information, enabling students and parents to transfer their tax data directly to the form.

    Bennet says: “We recommend students give permission to use the IRS Data tool because it is the easiest way to provide your tax information and the best way to ensure your FAFSA application has complete and accurate tax information. Also, if selected for verification, the student or parent doesn’t need to turn in a copy of their tax returns in most situations.”

    What is financial aid verification?

    Verification means you’ve been selected to confirm that the data on your form is correct. Some schools may want to verify your information, or you may have been selected at random. The verification process should only take about an hour.

    Not filling in all the fields

    Always enter a “0” in the field or put N/A. If you are filling the FAFSA online, you should be notified if you leave an “important” field blank. But this is not guaranteed, and the form can be rejected as incomplete.

    Avoid using commas or decimal points in numeric fields. If you enter cents, the decimal point may be ignored, yielding a figure that is 100 times larger than what you intended. Round up or down to the nearest dollar and you will be fine.

    Not listing all your colleges

    The drop down boxes on the online FAFSA should alleviate this problem, but be sure to list every college you are interested in.

    When it comes to how many colleges to include on the application, Bennett says: “It is best to list as many schools as possible (up to 10) that you think you might attend. If you later decide not to attend a particular institution, that is okay. It is also important to add the school code of each college. Without this code, your intended school will not receive your FAFSA, and you may miss out on important or timely funding.”

    Many applicants list their school choices without considering their order of preference. This is another mistake, because some states want the schools listed in a specified order. Fail to do this and it can affect your chances of receiving state aid.

    » Read: How many colleges should you apply to?

    Making mistakes when adding financial details

    Entering financial details incorrectly can delay your application or cause it to be rejected. For example, students often forget that a primary residence, retirement plans, small family-owned businesses, and the cash value of life insurance don’t count as assets on the FAFSA. Some of the most common and costly mistakes are made by incorrectly reporting assets.

    Mistakes are often made when reporting parental income. Typical errors include:

    • Listing parental income in the student income line – Students who do this may get a nasty shock when they receive their financial aid award letter. The financial aid package might be much less than anticipated.
    • Listing parental income when you’re married – Once married, you are no longer considered a dependent, and the finances of your parents no longer bear any relevance to the FAFSA form. Instead, you need to report the joint income of you and your spouse.
    • Entering the wrong parent when they are divorced – If your parents are divorced, it can be tempting to list the lower-income parent to qualify for more needs-based aid. However, the form asks you to list your custodial parent, and lying can have serious consequences. Remember that if the custodial parent is remarried, the income and assets of the stepparent must also be included

    It is also beneficial to check if there are any small changes you can make to your finances to yield a better result. For example, the FAFSA formula counts up to 5.64% of a parent’s assets as being available to pay for college expenses, but if they are listed as the student’s assets, this can rise to 20%. Moving a child’s assets into an account that is not in their name will reduce the amount you have to report on the FAFSA.

    Entering wrong information

    A typical example is stating the summer or campus address, rather than the permanent home address. Bennett offers some important advice on how to avoid such mistakes:

    “Students need to pay attention to the definitions provided in the FAFSA application. There are specific definitions for legal guardianship, number of family members in college, household size, among many others. If you’re not careful, you may report information incorrectly.

    Some advice I give students is to pay close attention or be aware of the program level they are intending to study. Many students may state they are in a “graduate” program, or that they have completed a bachelor’s degree when they haven’t. This error renders the student ineligible for any federal grant funds for which they might otherwise be eligible.”

    Final word on common FAFSA mistakes

    When completing the FAFSA it can be helpful to have someone else check your form in case you missed anything. This is the easiest way to ensure that you get all the important details (and even the minor ones) correct. If you are careful there is no need to be afraid of filling in the FAFSA form, and the resulting financial aid can be an important step toward getting your degree.

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