Ghouls and goblins aren’t the only thing lurking around the corner this season. Big changes…
1. Know the deadlines – There are 3 of them!
Federal – The FAFSA becomes available on October 1, 2021 for the college academic year 2022 – 2023 and the federal deadline is June 30, 2022.
Link to the FAFSA form.
College – Since colleges rely on the FAFSA to award student aid, make sure you know each individual school’s FAFSA deadline. Deadlines may be different for early action, early/regular decision, new students, and continuing students.
State – Residents planning to attend an in-state public college also need to know the state deadline. State funds can run out fast and are often awarded on a first-come, first-serve basis.
Link to the state deadlines.
Safest rule of thumb is to plan on filling the FAFSA out and submitting it as close to October 1, 2021 as possible!
2. Set up your FSA ID.
This is the username and password that you will need to have set up prior to starting the FAFSA. It is essentially the electronic equivalent of your signature. It is easy to set up, but don’t lose track of it.
Both the parent and dependent student will need to set up their own ID.
Create a save key – this is a temporary password that allows the parent and student to pass the FAFSA back and forth.
Here is a brief video on how to set up your FSA ID:
3.Know your social security number – the name must match the name on the tax return.
4. Take additional asset moving opportunities before the FAFSA is completed and submitted.
Even though it is too late to adjust your income for the 2022 – 2023 FAFSA, an appeal may be warranted based on any changes in income between your 2020 tax return and when your student begins school in 2022.
However, it is not too late to make last minute reductions in assets that will be reported on the FAFSA.
There are many strategies that can be used. For instance, if you have $20,000 of cash that you don’t need for college, pay down credit card debt or buy the new car you’ve been needing. The car is not reported on the FAFSA and neither is the cash, since it was converted to a non-reportable personal asset and/or used to reduce a personal debt.
5. Have the following INCOME documents readily available:
- 2020 tax return
- 2020 W-2’s
- Records of untaxed income such as child support and tax-deferred retirement contributions
6. Have the following (non-retirement) ASSET documents readily available:
- Checking, savings, investments (such as stocks, bonds and investment real estate).
- The value of parent owned 529 accounts for all students. Since this is considered a parent asset, the collective value for all children is reported.
- Note that the value reported of the assets is the value the day you fill out and submit the FAFSA.
- Do not list the value of your small family run business and do not list the value of your principal residence.
7. Have your school list ready to enter on the FAFSA. Even if the school is a “maybe”, list it anyway – it’s easier than going back to add it later. Here is what you do if you have more than 10 schools to list.
Tip: Keep all of your FAFSA documents together in one folder file. You may need it if selected for verification or if you need to appeal a financial aid award offer.
In addition to what to have ready to prepare ahead of time, read my other blog on how to fill out the FAFSA.
Don’t be overwhelmed by this process, it really is quite simple and the FAFSA can be filled out in less than an hour if you have all your documents ready!