Every year, students who plan to attend college or return to college will likely file a Free Application for Federal Student Aid, or FAFSA. This is an important document that helps to determine how much student financial aid will be available for the upcoming year in college. The amount of federal funds available for a student loan may determine whether college is even possible for some students.
While most students look to make high marks in college, a lower mark is what you want when it comes to student financial aid. In fact, the lower your Expected Family Income, or EFC, the higher your total amount of financial aid will be for that year. The information provided on your FAFSA uses a formula that takes into account the financial strength of your family, and helps to determine the amount of financial aid they will offer to you.
File Your FAFSA and Taxes Early
There is plenty of time to submit a FAFSA, usually the end of June each year. However, most colleges and universities set their deadlines for financial aid offers in February or March in the preceding academic year. Parents and students who fill out and submit their FAFSA early will be more likely to be the recipient of more financial aid, especially in these times of schools cutting back financially and limited financial aid available.
A great deal of the information needed to complete your FAFSA is going to be from your tax returns. For returning college students or parents with kids applying for college, it’s a good idea to get your taxes filed before you fill out the FAFSA. Filing early means getting all your year-end pay stubs and statements from banks or other financial institutions showing any interest earned the previous year. In order to meet the February college deadlines for financial aid consideration, it may be necessary to estimate your expected taxes or use the previous years tax information for this year’s FAFSA.
Other Considerations for Getting More Student Financial Aid
When preparing the FAFSA, remember that if you have more than one child in college, that would have a huge impact on your total EFC amount for each child. Typically, if your EFC is $5,000 for one student and another child enters college, the schools are going to divide that contribution between the two college students, or $2,500 each. Essentially, that means a larger financial aid offer for both students to make up the difference.
Move any money out of your child’s name. When those cash or assets are in a child’s name, the EFC will be considered as higher than if those same assets were under your child’s name. A good idea may be to move those assets into a custodial version of the 529 college plan. See your tax advisor or accountant for additional details.
Finally, be sure to make unusual financial circumstances apparent when providing information on the FAFSA. If something like a layoff or job loss dramatically alters your financial situation, you can go online and make an appeal to the college or university. The school will then consider this appeal and possibly adjust the amount of student financial aid offered.
Sources:
FAFSA: Free Application for Federal Aid
Students urged to file FAFSA soon.
Decoding the FAFSA: Tips to Boost Financial Aid
