Don't tellanyone we told you this.
Students must face it, but few understand it. Theelusive FAFSA application is your key to government grants, loans, and awork-study job. Unfortunately, the FAFSA has more holes than a slice of Swisscheese. Students who get the most money from the government are frequently theones who simply understand how the FAFSA works. Here is how to optimize yourgovernment aid eligibility:
Understand the FAFSA
Yeah, you have to know what you're filling out. If you don't, you're essentially lying and you run the risk of getting caught or not getting the amount of financial aid you deserve. There are plenty of resources out there, but here's one we like:
BestSchool's Guide to the FAFSA
Empty Your Accounts
If you have college cash stashed in a checking orsavings account in your name, get it out—immediately. For every dollar storedin an account held in a student's name (excluding 529 accounts), the governmentwill subtract 50 cents from your financial aid package. That means that if youhave a full Pell Grant heading your way, but the government notices that yousaved $1,000 cutting yards all summer long, they will reduce your aid packageby $500. Moving funds into an account held in your parents' name will help (thegovernment only subtracts 20 cents in financial aid for every dollar in aparental account), but keeping it in a grandparent's or relative's account iseven better since those accounts are not included in the federal financial aidmethodology. If generous family friends are not an option (and they may not besince there are tax ramifications to shifting funds), open a 529 plan and putyour money there. Funds stored in a 529 plan are assessed at a much lower rateand only subtract up to 5.6 cents for every dollar invested.
Coordinate Your Family
If you have siblings heading back to school oryour parents are thinking about going themselves, make college a family affair.The more people your household has in school at once, the higher your collegecosts and the higher your financial need. Waiting a few years to attend schoolat the same time as your siblings can double your federal financial aidpackage.
Pay Your Debt
When deciding how much aid you will get, thefederal government will look at how much money you have in the bank, but theywill not take your debts into consideration. If you or your parents have creditcard debt, pay that off before applying for financial aid. The government alsowill not look at funds stored in home equity on your primary home, retirementplans or life insurance policies so it pays to fund those before filling outthe FAFSA.
Simplify Your Needs
Households with adjusted grossincomes of $50,000 or less may be eligible to fill out a lighter version of theFAFSA called a Simplified Needs Test. Designed for low-income households, the Simplified Needs test does not take any financialassets into consideration, meaning you will be eligible for substantially moreaid.
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FAQs
Basic Principles
- Reducing income during the base years.
- Reducing “included” assets. ...
- Increasing the number of family members enrolled in college and pursuing a degree or certificate at the same time.
Read on to find out how to avoid these common errors on your form.
- Not Filing the FAFSA Form by the Deadline. ...
- Completing the Wrong Aid Year's Application. ...
- Not Registering for an FSA ID. ...
- Using an Incorrect Social Security Number. ...
- Leaving the Questions Blank. ...
- Not Listing the Schools You'll Apply To.
View your SAR by doing the following:
- Go to fafsa.gov.
- Select “Start or Edit a 2023–24 FAFSA Form.”
- Enter your account username and password (FSA ID).
- Select the student role on the “Roles” page.
- Select “View Student Aid Report (SAR)” from the “My FAFSA” page.
Students selected for verification of their FAFSA form may wonder, “Does FAFSA check your bank accounts?” FAFSA does not directly view the student's or parent's bank accounts.
What is the fastest way to complete the FAFSA? ›
The easiest, fastest, and most accurate way to complete a FAFSA form is using the online application and providing consent and approval for the access, disclosure, and use of federal tax information (FTI).
Can submitting FAFSA hurt your chances? ›
For most colleges, applying for financial aid won't impact your chances of admission. This is because many colleges operate on a need-blind basis.
What should I not report on FAFSA? ›
Cars, computers, furniture, books, boats, appliances, clothing, and other personal property are not reported as assets on the FAFSA. Home maintenance expenses are also not reported as assets on the FAFSA, since the net worth of the family's principal place of residence is not reported as an asset.
What are the 3 top FAFSA tips? ›
FAFSA Tips & Common Mistakes to Avoid
- Apply Early. Many states and colleges use the FAFSA to determine eligibility for non-federal student aid funds that may have early deadlines or limited funding. ...
- What You Need to Complete the FAFSA. ...
- Apply Online. ...
- Avoid Common Errors. ...
- Get Help.
There is no set income limit for eligibility to qualify for financial aid through. You'll need to fill out the FAFSA every year to see what you qualify for at your college. It's important to make sure you fill out the FAFSA as quickly as possible once it opens for the following school year.
How do you know how much money FAFSA will give you? ›
Your EFC (2023–24 FAFSA form) is an index number that college financial aid staff use to determine how much financial aid you would receive if you were to attend their school. The information you report on your FAFSA form is used to calculate your EFC. The EFC is calculated according to a formula established by law.
In most cases, due to the IRS Data Retrieval Tool for the 2023–24 FAFSA form, you won't have to verify income and tax information. However, if you are selected for verification, the school may ask you to submit a tax transcript or other documentation to confirm the information you reported.
How do colleges verify income? ›
Some of the documentation you may need to provide in the verification process for you and your parents (if applicable) are: Tax transcripts or tax returns showing income information filed with the IRS. Tax transcripts can be ordered by mail for free at the IRS website.
Does FAFSA see what you spend your money on? ›
The financial aid office does not know what you spend the money on. But you do sign a "statement of educational purpose" when you file the Free Application for Federal Student Aid (FAFSA). So, you have agreed to spend it on expenses related to your enrollment in college.
Should you empty your bank account for FAFSA? ›
The student should keep no cash or cash equivalents saved in their name. Students are punished by the FAFSA for saving any cash.
How far back does FAFSA look at income? ›
HOW THE FAFSA LOOKS AT INCOME. The FAFSA requires parents and students to report income from two years prior to the school year for which financial aid is being requested. For example, if you plan to start college in the fall of 2023, you will provide income information from your 2021 tax return or W-2 tax form.
How do I fight FAFSA? ›
How the Financial Aid Appeal Process Works
- Ask about the appeals process. ...
- Write a financial aid appeal letter. ...
- Gather evidence to substantiate appeals request. ...
- Complete any necessary forms. ...
- Follow up a week after materials are sent.
- File Early.
- Minimize Your Taxable Income.
- Clarify Who Owns Your Assets.
- Don't Assume You Won't Qualify.
- FAFSA Isn't the Whole Picture.
- FAQs.
- The Bottom Line.
7 Reasons Financial Aid Can Be Taken Away
- Stay academically eligible.
- Always fill out the FAFSA.
- Don't default on your federal student loans.
- Keep your U.S. citizenship status.
- Avoid incarceration for legal offenses.
- Don't accept too much federal aid money.
- Avoid a government lien.
Aid Amount: Who Decides and How
This is how they do it: The financial aid staff starts by determining your cost of attendance (COA) at that school. They then consider your Student Aid Index (SAI) (2024-25 FAFSA form) or Expected Family Contribution (EFC) (2023–24 FAFSA form).
