Money for College: Don’t Forget FAFSA! - Mascoma Bank

Money for College: Don’t Forget FAFSA!

author imagePosted by Richard Lemay on February 12, 2020

Do you have children heading to college next year? Have you filled out the Free Application for Federal Student Aid (FAFSA)? There’s still time—but not much!

The FAFSA is an application for governmental financial aid to help with the high price tags of today’s colleges. For many families, it’s a necessary step in the path to a college education. It’s the gateway to a lot of need-based options, including scholarships, grants, and low-interest loans.

Despite all the potential benefits, many eligible families don’t think to take advantage of it! A 2018 analysis found that $2.6 billion in financial aid went unclaimed in the 2018–19 school year. That’s a lot of money to leave behind. That means more than 600,000 students who were eligible didn’t claim their fair share of FAFSA grants and scholarships.

The FAFSA isn’t a difficult application to complete. If you’re prepared, it should only take about half an hour, which isn’t bad when you consider the average award is about $3,900. Plus, you only need to fill it out once, and then send that same application to every school your child is applying to, up to 10 schools. You simply need to be organized and have all the necessary information with you before starting, and be sure to double check all of your entries and make sure your amounts are correct.

Here’s what you’ll need.

  • Social security numbers (both students’ and parents’)
  • A Federal Student Aid Identification Number (FSA ID). This is the number that you’ll use throughout the application process. You can get one here.
  • A driver’s license or another form of government-issued ID
  • Students’ and parents’ 2018 tax returns (there’s also an option to digitally access these returns through the application)
  • Bank account statements and any other asset records
  • Records of untaxed income such as child support, disability benefits, and health savings accounts
  • The code for each school you want the FAFSA sent to.

Once you have your materials gathered, use your FSA ID to log into your account at the FAFSA website and get started on the application.

Here are some tips on things you can do before, during, and after filling out the FAFSA to increase your chances at getting the most financial aid.

Lower the amount of money in your savings account. Has your child been saving for college since they were seven? Transfer that money into a 529 plan rather than keeping it in a savings account. The FAFSA calculation assumes that 20 percent of a student’s assets should be used toward school, but for parents, it’s only up to 5.64 percent. Putting college savings into a parent-controlled 529 plan means the money will be assessed at the lower rate.

Move money. Did you recently sell a house or have an investment windfall? Those capital gains are treated like income on the FAFSA, so it may be better if you sock those gains into a 401(k) or IRA—those types of accounts won’t count against you.

Don’t leave blank spaces. Blank spaces can lead to processing delays. Fill out as much as you can, and then use zeroes or choose “Not Applicable” to fill in fields that don’t apply to you.

Add supplementary letters. Does your financial situation look better on paper than in real life? Write a letter explaining why and send it to the financial department at the college. Colleges are concerned about the numbers, but many consider more than just the basic application when determining eligibility. Letting them know about a recent job loss, expensive health care crisis, or other financial hardship will allow them to make a more informed decision.

Send the FAFSA to colleges your child is are interested in but hasn’t yet applied to. They don’t mind. If they don’t receive a college application from your child, they’ll simply discard the FAFSA.

Appeal. If you received a decision you don’t think is fair (no money or not enough money), you can negotiate! Contact your school’s financial aid office and ask for the steps to appeal. Be polite and grateful for what you received, but try and clarify your financial position to negotiate for a better scholarship or more grants.

The FAFSA makes college more affordable for millions of students every year—and all you have to do is ask. By taking the time to fill out the FAFSA, you could be looking at far less in student loans and more in your bank account. Even for families who are financially secure and can’t imagine they might qualify for need-based assistance, the FAFSA can open doorways you didn’t even know existed.

The federal deadline to submit the FAFSA for the 2020/2021 school year is June 30, 2020. However, your child’s school might have an alternative deadline—be sure to check the tuition and financial aid pages on the website so you don’t accidentally miss out.

You have nothing to lose by applying.