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By Joanna Nesbit
September 30, 2021
A treasure map with all kinds of college activities.
Jade Schulz for Money

Every year, the Free Application for Federal Student Aid, a.k.a the FAFSA, opens on Oct. 1 for students going to college the following year. It’s the financial aid form that the U.S. Department of Education uses to hand out more than $30 billion in grants each year. For many families, the FAFSA inspires dread — and worry about making mistakes.

But the biggest mistake families can make is not filling it out, experts say. “Families get so overwhelmed by the process that they don’t even complete the FAFSA,” says Jodi Okun, founder and president of College Financial Aid Advisors.

Sometimes families assume they won’t qualify for aid and think it’s not worth the time; for example more than 40% of parents in a recent Discover survey who don't plan to complete the FAFSA say it’s because they don't expect to qualify for federal financial aid. But besides federal grants, colleges use the FAFSA to determine state aid, institutional aid, work-study, federal student loans, and sometimes merit scholarships. Some colleges require it to be on file. It’s almost always worth filling it out, and you need to fill it out ahead of each year you plan to enroll in college.

Here’s what students and parents need to do to complete the aid application, either online at fafsa.gov or on your phone through the myStudentAid mobile app.

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1. Plan to file well ahead of the federal deadline

Though the FAFSA opens up each year on Oct. 1, that’s not when it’s due, so don’t panic. The federal deadline actually isn’t until 21 months later. So, for example, the FAFSA for the 2022-2023 school year will open on Oct. 1, 2021 and close June 30, 2023.

However, states and colleges have much earlier FAFSA deadlines for their own aid, and some states award aid on a first-come, first-served basis. The upshot? While it’s not necessary to file exactly on Oct. 1, you do want to file early. Okun says, “Make sure it’s before the priority financial aid deadline of the colleges.”

2. Create your Federal Student Aid ID and Save Key

Before you can start the FAFSA application process, you must set up an account with a Federal Student Aid ID, which requires a student’s Social Security number or alien registration number. It takes one to three days to confirm your account, so start this process several days beforehand.

Your FSA ID is a username and password for your account. It also acts as your electronic signature when you submit the FAFSA online. This video will guide you on setting it up.

One parent also needs to set up a separate FSA ID if you’re a dependent student. The parent’s FSA ID is solely to sign electronically, and it requires their Social Security number, a separate email address, and a separate phone number from the student's. (The same parent FSA ID can be used for multiple kids in college.) If your parent doesn’t have a Social Security number, they can’t get an FSA ID. They should instead insert zeros in place of their Social Security number and print the signature page at the end to sign and snail mail. Be aware the signature page can’t be printed from the mobile app.

You’ll use the same FSA ID every year you fill out the FAFSA. It can be reset if you forget if your password or username, but the FAFSA locks you out after three attempts to sign on — so reset before that third try. Returning users can log in and hit “FAFSA renewal” to populate the personal information from last year’s form.

You’ll also need to create a “save key,” which is a temporary password (different from your FSA ID) that allows sharing the document between parent and student until it’s submitted. Make sure to write down your FSA IDs and save key; everything is easier if you don’t forget them.

A note to parents of dependent students: You can fill out your portion of the aid application without your student’s FSA ID. On the Login page, enter your student’s name, Social Security number, and birth date on the right-hand side along with the save key your family created. You cannot use your FSA ID to log in — only the student’s FSA ID works. It’s their FAFSA.

3. Add your list of schools

There’s a section on the FAFSA for listing up to 10 colleges. Your FAFSA gets sent to them at no cost, so list any colleges of interest even you haven’t applied or been accepted. You can add new ones later if needed. You’ll need to include the federal school code for each college you list, which you can find here.

If you want to list more than 10, wait until you receive your Student Aid Report (more on that below) confirming the FAFSA application was processed and sent to the first 10, says Alex Bickford, director of college finance at Bright Horizons College Coach. Then you can log back in and delete all 10 schools (to avoid double submissions) and add the new colleges, he says. To get there, click on “Make FAFSA Corrections” and go to the schools section.

4. Gather your financial documents before filling out the form

You’ll need the previous year’s tax return to file for next year — that is, you’ll use your 2020 tax return for the 2022-23 school year.

Dependent students must provide their financial information and their parents’ information. Independent students provide only their information, and spousal information if married. Here’s what to collect in advance:

  • Driver's license (if you have one)
  • Federal income tax returns (if filed) and W-2s from the previous year
  • Nontaxable income records, such as child support and veteran benefits, from the previous year
  • Bank statements showing your most recent asset information, including checking, savings, non-retirement investment records, parent-owned college funds, real estate (not your primary home), business records, investment farms, and student accounts such as UTMA or UGMA accounts.

If a parent’s income situation has changed — because of a job loss, for example — you’ll still use the same tax return. After filing the FAFSA, contact each of your colleges to discuss your family’s changes.

5. Fill out all FAFSA sections

First, choose the correct FAFSA year. You’ll see two options, one for the current academic year and one for the next year. You want next year. Then complete each section.

Be sure to check the box that you want to be considered for work-study. Doing so simply gives you the option to use it if it's awarded, but down the road when you get your financial aid award, you don’t have to accept it if you don’t want to.

Many families qualify to use what’s called the IRS Data Retrieval Tool (DRT) to populate the student and parent income sections (eligibility hinges on tax filing status). You’ll see a “Link to IRS” button if you do qualify, which links you to the IRS site with your FSA ID. The DRT populates tax return information directly from the IRS. Experts recommend using the tool because it’s safe, fast and accurate; it eliminates the chance you might make a mistake when entering your financial information. But note that the FAFSA form won’t display numbers — only the phrase “Transferred from the IRS” — so you won’t be able to verify numbers against your tax return.

While the tool to retrieve data from the IRS has been a big help in simplifying families’ interaction with the FAFSA, there are a couple of DRT caveats:

  • Divorce: Don’t use the DRT if you’re in the process of divorce or separation, Bickford says. The FAFSA only requires information from the parent the child lives with more than half of the year (even if just by a day or two). That parent should manually enter their income and an estimate of their taxes paid (calculated with this IRS tool).
  • IRA rollover: When you use the DRT, be sure to watch for the FAFSA question asking if you had a rollover. The FAFSA subtracts the value of the rollover from your income. However, sometimes families miss the question, Bickford says, and then your rollover isn’t subtracted. That mistake artificially inflates the amount a college thinks you can afford to contribute.
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6. Watch out for common mistakes

The language on the FASFA is formal and frankly, bureaucratic, much like you’d see when filling out a tax return. So, take your time reading each question carefully to avoid making simple mistakes, especially if you have a complex family situation or tax return. Use the FAFSA’s question mark icons next to each line item to ensure you understand which assets should be reported.

Three common mistakes include listing a parent or student-owned 529 college savings account as a student asset, reporting retirement account balances (401K, IRA, Roth IRA, for example), and including the home equity value of your primary home.

The 529 accounts should always be listed in the parent section, Bickford says. You’ll need to list the total of every 529 account you own even if they are intended for other children, but don’t include 529 plans owned by grandparents or other relatives. Don’t report qualified retirement accounts or the home equity of the house you live in – those assets are protected in the formula to calculate what you can afford to pay for college. Keep in mind, if you have money intended for retirement stashed in a non-retirement account, you do need to report that.

7. Check your work before you submit the FAFSA

This may sound like a silly step, but it’s an important one: Making corrections after you submit the aid application can be a pain and may even delay your financial aid notification. Save often as you fill out the form and save at the end. Proofread all your information and look for extra zeros. Once you’ve submitted your FAFSA, look for a confirmation screen indicating it went through.

The confirmation page also allows transferring information to a sibling’s FAFSA. Additionally, some states have their own financial aid form and partner with the FAFSA to allow you to transfer your information into the state form. Both of these options appear only on the confirmation page and must be used when you’re still in the form, so take advantage of them. If you don't, you’ll need to fill out those additional forms separately.

8. Review your Student Aid Report and make corrections if needed

If you submit the form electronically as most families do, your Student Aid Report should come back in three to five days — or two weeks for a paper signature page (either process takes longer if you submit without including an email address). But right after submitting the form, you can log in to confirm your application is processing properly.

The Student Aid Report is a summary of all the information you submitted. However, if you used the IRS Data Retrieval Tool, it won’t show your tax information. The SAR also lists an "Expected Family Contribution", or EFC in the top right corner of the page. Your EFC is the key to all financial aid.

Many parents are shocked by their Expected Family Contribution. But the name is a bit of a misnomer — it’s not necessarily the amount you’ll pay (indeed, you could pay much more). Instead, colleges use the EFC to determine how much financial aid you’re eligible for from federal, state and institutional sources. For federal financial aid, your financial need is equal to a college’s cost of attendance minus your EFC. Keep in mind, if your EFC is very low, many colleges don’t offer enough financial aid to meet need.

Note that the Student Aid Report is not the same thing as a financial aid award letter, which comes after you’ve been accepted to colleges. Those letters will break down the financial aid package a college is offering.

(Bonus tip: the EFC gets posted in an odd way. If your EFC is $8,000, for example, the SAR lists it as 008000.)

When your Student Aid Report is ready, you’ll receive an email notification to log in, review, and correct or update mistakes if needed. If your SAR is incomplete, you won’t see an EFC listed. Some corrections can be made online, but usually updates to your financial information or dependency status and marital status require contacting each college directly. If you used the Data Retrieval Tool, you cannot update any of that income information, Bickford says.

After you receive the email notification that your SAR is available, “Log in and see if you can make the corrections in the FAFSA,” he says. “You’ll know if you can’t because the box on the FAFSA will be greyed out.”

9. Follow through on the verification process if selected

Unfortunately, this is not the end of the FAFSA application process for every student. As many as 20% of applications each year are selected for a process known as verification. Don’t assume this means you made a mistake; some students are selected at random, and sometimes colleges verify all students’ FAFSAs before giving out financial aid packages.

Each college financial aid office handles verification on its own, but you’ll likely be asked for additional forms to support the submitted information — like a copy of your tax return if you didn’t use the DRT. You might see a notification posted on your Student Aid Report when you log in to review it, or you might be contacted directly by one of your colleges. Submit the information in a timely way to avoid delays in accessing your financial aid.

For most families, the FAFSA is a straightforward process that doesn’t take too much time. Data from the U.S. Department of Education shows that most applicants complete the form in less than an hour. If you want to practice, this paper worksheet can help. And if you need help while you’re filling out the form, you can review the FAQs on the fafsa.gov website, use the chat function or call the help line at 1-800-433-3243.

How to Apply for FAFSA FAQs
What is FAFSA?
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The FAFSA, officially known as the Free Application for Federal Student Aid, is the form that families fill out to apply for federal grants, loans, and work-study funds for college students. It is administered by the U.S. Department of Education.

Many colleges, state scholarship agencies and private foundations also use the FAFSA to award money for college. The form asks questions about family income, savings, real estate and more to determine financial need.

When is FAFSA due?
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The federal deadline for the FAFSA is June 30 each year. For the 2021-2022 academic year, you can submit the form and qualify for federal grants and student loans until June 30, 2022. That gives students a 21-month window to fill out the form for each school year.

But it's strongly recommended that students file a FAFSA as early as possible. States and private scholarships may also use the form to award financial aid, and their FAFSA deadlines are earlier than the federal government's. Plus, in some cases awards are first-come, first-served.

When does FAFSA open?
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The FAFSA application opens every year on Oct. 1.
How long does FAFSA take to process?
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If you submitted your FAFSA online, then the U.S. Department of Education will process your application within three to five days. If you submitted a paper FAFSA via mail, your application will be processed within seven to 10 days.

Once your application is processed, you will receive a copy of your Student Aid Report (SAR), which summarizes the information you provided on your FAFSA.

How long does it take to fill out the FAFSA?
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The FAFSA currently has more than 100 questions. But with a series of improvements over the past several years, including wider use of the IRS Data Retrieval Tool, very few students must go through every question.

On average, it takes first-time filers less than an hour to complete the application. Independent students (who don't need to submit information from a parent) and students who are filing out the form for subsequent years of college, the average time ranges from about 20 to 30 minutes, according to data from the Education Department.

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