January is the start of FAFSA season, as students and families prepare and complete the Free Application for Federal Student Aid. For any student looking to receive financial aid for college, the FAFSA is vitally important, as it is the primary document that schools and states use to determine financial aid packages. In spite of its importance, though, the majority of FAFSA applications are submitted with either incorrect or incomplete information. These errors can make a significant impact on how much aid a student can receive for school. So in order to get the most out of the FAFSA application, here are some tips to avoid common errors:
- Failing to Submit Because of Income
The FAFSA doesn’t serve only need-based financial aid options for students, but is a critical tool for determining financial aid options for all students. The most crucial error families make is not submitting a FAFSA at all. Some families will think that their combined family income will be “too high” to qualify for financial aid while other families will feel that because their combined family income is “too low,” that they shouldn’t bother submitting a FAFSA. Any student attending college should encourage their family to submit a FAFSA
- Understating Income or Overstating Assets
New rules will start for the 2016-17 school year intended to make it easier for families submitting accurate tax information. But even with those new rules, it’s important to make sur that all income is reported on the FAFSA. Contributions to a 401(k) or any other pre-tax retirement account often get ignored as reported income and can show, in effect, a higher FAFSA income than what might be shown on your tax return. Just as many families also mistakenly include retirement assets or real estate equity as part of their investments or net worth, when in fact retirement assets should not be included here. Income from rental property or vacation homes, however, can be included.
- Attributing Information to the wrong person
While it is often a parent completing the FAFSA for their student, it’s important to remember that the FAFSA is written from a student perspective, as if they are the one completing it. When the FAFSA refers to “you” and “yours,” it is in fact referring to the student.
- Not filing electronically
Online submission provides built-in edits to help prevent errors, is more time-efficient, includes an online help feature, and offers a much simpler renewal process. But make sure to avoid another common error and save as you go. Saving the application after completing every page or two will help prevent any problems if an internet connection goes down or you face some sort of technical issue.
- Not Paying attention to details
From making sure that the correct year’s FAFSA is being completed to making sure to take time to consider each question thoroughly, it’s important to make sure that full attention is being given to the FAFSA process. Give yourself time to think through the questions and what they are asking. Answering questions a certain way can preclude you from receiving aid or valuable information.