How to successfully apply for FAFSA

Miranda Marquit
Miranda Marquit

Miranda Marquit, MBA, is a freelance financial writer and money expert. Her work has appeared in multiple media outlets, including Marketwatch, NPR, Yahoo! Finance, Entrepreneur, Forbes, and more.

How to successfully apply for FAFSA

    One of the easiest ways to get financial aid for college is to fill out the Free Application for Federal Student Aid (FAFSA). However, not everyone is aware of how important the FAFSA is when it comes to getting help to pay for college. A 2018 report found that students left $2.6 billion in student aid on the table.

    Programs that can help students pay for college include the Pell Grant, Federal Work-Study, subsidized and unsubsidized federal student loans. For students to receive assistance from the federal government to pay for school, they are required to complete the FAFSA.

    Understanding how to fill out the FAFSA is a big part of making sure you get the most out of your application and that you’re considered for all of the aid you’re eligible to receive, especially if you come from a low-income background.

    » Read: What are federal work-study programs?

    Steps to completing the FAFSA

    Applying for the FAFSA is fairly straightforward and can be completed online or via paper application. Although the application is lengthy and requires in-depth information, there are several tools that help speed up the process.

    In order to complete the FAFSA, you need to follow the steps below:

    1. Gather your information

    As you fill out the FAFSA, having certain information on hand can be helpful. You will need:

    • your social security number.
    • basic information about your family size and income, including tax returns.
    • the list of colleges you’re applying to.
    • your parents’ information if you’re a dependent student.

    2. Create your Federal Student Aid ID

    The next step is to create a Federal Student Aid (FSA) ID. You can do this by going to and clicking on “Create an Account.” To complete the FAFSA, each applying student needs their own individual FSA ID that is separate from their parents’ FSA ID.

    » Read: Common FAFSA mistakes to avoid

    3. Start filling out the FAFSA

    Once you have your FSA ID, you can log into the FAFSA application and begin entering your information. Start with your personal and academic information, including name, address, date of birth, and the schools you want to attend. Dependent students need to enter demographic information for their parents. This part of the application is fairly straightforward.

    4. Enter your and your parents’ financial information

    The next section of the FAFSA is often the most frustrating to finish. In this section, you provide information about your and your parents’ income based on previous tax returns. To make this part simple and quick, you can use the built-in IRS Data Retrieval Tool.

    The IRS Data Retrieval Tool links your FAFSA form with the IRS so that you can securely transfer your tax information from the appropriate year into your FAFSA form. Using this tool helps ensure that your information is accurate and saves you tons of time. For added security, the form will not display your tax return information. Instead, it will appear as “Transferred from the IRS.” Generally, students who use the IRS Data Retrieval Tool don’t need to provide copies of their own or their parents’ tax returns to their school.

    Most students who filed or had parents file a tax return within the given year are able to use the tool. However, those who filed foreign tax returns, Puerto Rican tax returns, or Forms 1040NR or 1040X are required to enter the information manually. Individuals who are married and filed their tax returns either as “Married Filing Separately” or “Head of Household” also need to manually enter the information.

    » Read: Ways to make college more affordable

    5. Review and submit your FAFSA

    After completing the form, review the information for accuracy and submit your FAFSA to the Department of Education. If you’re unable to complete the FAFSA in one sitting, it is also possible to save your progress and return to the FAFSA later by logging back in using your FSA ID.

    What kind of questions are on the FAFSA?

    In total, the FAFSA contains over 100 questions. Luckily, many of them are straightforward, including your name, address, SSN, date of birth, marital status, and email address. However, some of the questions can be complicated and tricky to answer.

    Some questions that tend to confuse students are:

    Are you interested in being considered for work-study?

    The best way to answer this question is always “yes.” Answering “yes” to this question doesn’t mean that you need to accept a work-study award if you’re eligible for it. It simply means that you want to see whether you’re eligible or not.

    As of today, what is the net worth of your (and your spouse’s) investments, including real estate? Don’t include the home you live in.

    Knowing the right way to answer this question can help ensure you receive all of the aid for which you’re eligible. Even reporting a few extra thousand dollars in assets can significantly decrease your eligibility. It may be a good idea to move around your assets prior to answering the question. Since the FAFSA asks about your investments on the day you fill it out, you have up until that day to get things in order.

    Your parents’ name, SSN, and date of birth.

    It can be tricky to know whether to include your parents’ information on the FAFSA or not. As a general rule, all students under the age of 24 must file the FAFSA with their parents’ information included. However, there are exceptions if the student is married, has children, is a soldier or veteran, or can provide proof of abandonment. If your parents are divorced and living separately, you only need to enter the information of the parent that you live with the most.

    As of today, what is the net worth of your parents’ investments, including real estate? Don’t include the home in which your parents live.

    The main thing to avoid with this question is double reporting your assets. If you reported an investment in the student financial information section, you do not need to report it a second time in this section. Additionally, it’s important to note that retirement savings don’t need to be reported.

    How many people are in your household?

    While this may seem like a generally straightforward question, the FAFSA’s definition of a “household member” might differ from your own. It’s important to include yourself, your parents or legal guardians, your parents’ other children who receive over 50% of their support from your parents (whether they physically live in the same household or not), and other individuals who live in the same household as your parents and receive over 50% of their support from your parents, such as an elderly family member.

    How many people in your (and your spouse’s) household will be college students between July 1st, 2021 and June 30th, 2022?

    It’s important to always include yourself in this number along with any household members who will be attending college at least half-time in a degree-awarding program within the given award year. Parents who are attending college or individuals attending U.S. military service academies should not be included in this number.

    » Read: A guide to financial literacy for college students

    How much money will you get?

    Using the information about your family financial situation, you’ll be given an Expected Family Contribution (EFC). This is the amount of money your family is expected to be able to contribute to your education. If you have a low income, you might qualify for a Pell Grant, and your chosen school might grant you additional scholarships based on need.

    The financial aid office at the school uses the information from the FAFSA to offer you a package. This package includes grants, scholarships, and federal student loans. You can decide what you want to accept. If you think that you qualify to receive more grant money, based on your situation, you can appeal the FAFSA decision.

    Appealing your FAFSA or financial aid package

    Reach out to your school’s financial aid office for information on appealing your FAFSA or financial aid package. In general, the appeal requires a letter explaining your circumstances and a demonstration of special or unusual circumstances that warrant another look at the situation.

    Here are some of the issues you can bring up as you continue with your appeal:

    • a one-time event impacting the previous year’s income and affecting the ability of your family to meet the calculated EFC
    • a change in your or your parents’ income
    • your student status changing from “dependent” to “independent”
    • the loss of a parent within the last year
    • a natural disaster affecting your or your parents’ ability to meet the calculated EFC
    • illness, incarceration, or other circumstances affecting the ability of your family to meet the EFC

    Note: there are some issues that won’t warrant an appeal. For example, if your parents refuse to provide information for that section of the FAFSA or to help pay for college, that won’t qualify you for an appeal. In many cases, if you’re able to show that there are extreme circumstances impacting your ability to pay, an appeal could help you receive additional money to help pay for school.

    Improve your chances of getting more financial aid

    When determining your family’s EFC— which impacts your ability to qualify for subsidized loans, grants, and work-study— being strategic about how you save can help you qualify for more money.

    File your FAFSA early

    Some financial aid awards are given on a first-come, first-serve basis. The FAFSA opens each year on October 1 for the upcoming financial aid award year beginning on July 1st. So, for the 2022-2023 award year, the appropriate FAFSA opened on October 1, 2021. The earlier you file your FAFSA, the more likely you are to get more in financial aid.

    Pay attention to base-year income and assets

    Financial aid decisions and your EFC are based on your or your parents’ income in a certain year. For example, the base year for the FAFSA application that opened in 2021 for the 2022-2023 academic year was 2020. When possible, avoid taking capital gains from selling investments, or at least look for ways to offset the gains with capital losses to maximize your aid.

    It’s important to understand that eligibility can reduce by 20% due to student assets, such as money in an investment account or savings account. So, for every $10,000 that a student has in their own account, they can see a reduction of $2,000 in aid eligibility.

    Look into a 529 plan

    One of the reasons a 529 Plan can be so powerful is that it’s usually in a parent’s name. Parental assets reduce eligibility by 5.64%. Therefore, money in a 529 Plan only reduces eligibility by $564 for every $10,000 versus $2,000 per $10,000 if the money is in a student’s account. As a result, it can make sense to roll student assets into a 529 Plan before filling out the FAFSA.

    Assets in a grandparent-owned 529 Plan are a little bit different. They aren’t reported on the FAFSA. However, after the funds have been disbursed to pay for college, they are considered income on the next year’s FAFSA. In this case, it can reduce eligibility by half.

    Increase number of family members in college

    The more individuals in your household that are in college at one time, the lower the EFC. While this isn’t something that can be done immediately, you can keep it in mind for the future. Fill out the FAFSA each year to take advantage of those changes in situation. Even if you didn’t qualify the year before, you might qualify now.

    Don’t forget to fill out the CSS profile

    Many institutions request students to fill out the CSS profile in addition to the FAFSA. The CSS profile offers a more in-depth financial need analysis, and some 400+ institutions use it to determine additional financial-aid eligibility.

    FAQs about the FASFA

    FAFSA submission dates are based on your attendance year. In order to qualify for aid during subsequent years, you must re-submit your FAFSA. The FAFSA opens each year on October 1 for the coming academic year and closes on June 30 of the current academic year. The FASFA form for the Summer 2021 – Spring 2022 academic year opens October 1, 2020 and closes June 30, 2022. The FASFA form for the Summer 2022 – Spring 2023 academic year will open October 1, 2-21 and close June 30, 2023.

    The FAFSA is what’s used to determine your eligibility for federal student aid. In addition to grants and work-study, the FAFSA also allows you to get federal student loans. Federal student loans come with additional benefits, like the potential for income-driven repayment, Public Service Loan Forgiveness, and lower interest rates. Keep in mind that you need to submit the FAFSA each year to continue receiving student aid.

    Submitting your first FAFSA can take up to one hour, according to the Office of Federal Student Aid. However, renewals in subsequent years can go faster, since you just need to review and update your information. Using the IRS Data Retrieval Tool can save a substantial amount of time during the process as well.

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