7 Things You Should Know About the FAFSA

The Free Application for Federal Student Aid, or FAFSA for short, can open the door to grants, scholarships and other forms of financial aid for college or graduate school. It allows you to quickly apply for federal, state and institutional aid all at once. But you have to actively fill it out in order to reap the benefits.

Here’s what you need to know about the 2021-2022 FAFSA.

Most students qualify for some type of financial aid

The FAFSA is used to determine eligibility for a wide range of financial aid opportunities, including work-study programs and federal student loans. There are no overall income limits, so all students should complete the FAFSA — regardless of their financial situation. 

Even if you aren’t eligible for need-based financial aid, you may still benefit from federal student loans that aren’t connected to your income. Federal student loans tend to have lower interest rates than their private lender counterpart. And they come with certain benefits and protections, like flexible repayment plans and loan forgiveness programs.

But you won’t know what you qualify for until you apply. And the application is completely free. So, what do you have to lose? Apply.

Your family’s financial situation will affect how much aid you receive

Your financial situation, or your family’s if you’re a dependent student, will be used to determine how much financial aid you receive.

Ultimately, your college will determine what kind of federal financial aid you’ll receive. And they do this by calculating your Expected Family Contribution (EFC) based on the information you provide on your FAFSA.

Your EFC represents an estimate of how much your family can reasonably contribute to your education. It’s not a direct reflection of how much your family will actually pay for your college, but rather a formula that looks at factors like:

  • Your family’s income, assets and benefits (e.g. unemployment or Social Security).
  • The size of your family.
  • The number of family members who are attending college at the same time.

Once your school has determined your EFC, they will subtract it from your cost of attendance. This will determine who much need-based aid you qualify for. And any leftover amount will determine how much non-need-based aid you can get.

The online form is fast and simple

You can submit your completed application by mail, but the online FAFSA form is much faster. It works similar to online tax software, meaning it will skip questions that aren’t relevant to your situation. 

To complete the FAFSA, you’ll need the following information:

  • Your social security number.
  • Your alien registration number if you aren’t a U.S. citizen.
  • Your most recent federal income tax return, W-2s and other financial information related to earned income. You may be able to import your tax information using the IRS Data Retrieval Tool.
  • Bank statements and records of investments or untaxed income, if applicable.
  • FSA ID for signing purposes.

Dependent students will likely need the same information for their parents, as well.

The FAFSA has a filing deadline

The 2021-2022 academic year FAFSA became available on October 1, 2020. And it will remain open for submission until June 30, 2022. But this deadline only applies to federal student aid.

Many states and universities have earlier deadlines. For example, Texas gives priority consideration for applications submitted by January 15, 2021. 

Because FAFSA deadlines vary, it’s best to submit your application as soon as you can each year.

Make sure you track your state’s deadlines and contact your preferred college for information about their deadline.

As an added note, there’s still time to submit your FAFSA form for the 2020-2021 academic year, which is currently in full swing. The final deadline is June 20, 2021.

Some financial aid is first come, first served

States like Alaska, Illinois, Indiana, Nevada, North Carolina, North Dakota, Oklahoma, Oregon, South Carolina, and Vermont have aid programs that have limited funding. This means there won’t be any more awards to give out once the funds are depleted.

This is often the case for financial aid at the local and university-level. So, it pays to apply early.

Because of the potential for limited funding, students are encouraged to apply as soon as possible after October 1.

You need to complete a FAFSA for each of your children attending college

If you have multiple children attending school, you’ll need to fill out a new FAFSA form for each child.

Fortunately, the system allows you to transfer information from one form to another. But you can only take advantage of this feature directly from the “Confirmation” page that you receive after submitting the initial FAFSA form. 

You won’t be able to return to the “Confirmation” page later, so be prepared to complete all FAFSA applications in one sitting if you want to save some time.

You need to fill out the FAFSA each year

Unfortunately, the FAFSA isn’t a one time and you’re done type form. You’ll need to complete a new FAFSA for each academic year.

But since the deadline is October 1 each year, you can put recurring reminders in your online calendar to make sure you’re ready to submit as soon as it becomes available.

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