5 Tips for Filing Your FAFSA | 01.14.13
With the holidays coming to a close, many of you are putting down the eggnog and starting to prepare for the upcoming year. All those who will be entering college in the fall, whether it be for their freshman or senior year, are trying to minimize the costs of school, and the FAFSA, or Free Application for Federal Student Aid, is one of the best ways to do that.
I’m back from my third semester of college to provide some tips for filing the FAFSA. So, without further ado, here are my five pieces of FAFSA advice.
1. Do It
Many families don’t file the FAFSA because they believe that they earn too much to qualify for federal aid. Income is only one of the factors that determines eligibility, so you should file the FAFSA regardless of income. Even if you only qualify for $500 of federal aid, this is certainly better than nothing.
2. File Early
The closer to January 1 you file the FAFSA, the more likely you are to receive financial aid. Many schools and grant programs have financial aid deadlines of February or March, and will not provide aid to those who submit the FAFSA late. Rather than waiting for your tax return to file the FAFSA, you can fill out a 1040 Form, which enables you to estimate your income for the past year, and then update your income estimate upon filing your taxes for the year.
3. 529 or Bust
Don’t save assets in the student’s name. 20% of the students’ assets may be counted in financial aid calculations, whereas only up to 5.64% of the parents’ assets may be included in financial aid calculations. Therefore, it would be best to save money in the parents’ names, or establish a 529 college savings plan, as these plans will be treated like a parent’s asset. Learn more about how 529 plans affect financial aid.
4. Spend Away (Within Reason)
Your amount of cash on hand also impacts financial aid calculations, so, for those who need a new car, be sure to buy it before filing the FAFSA, and pay as much as possible in cash. Consumer debt, such as a credit card or loan, has no impact on the FAFSA, so pay off as much consumer debt as possible prior to filing to further reduce cash on hand.
5. Make an Appointment
If you feel that your financial situation is unusual, try to book an appointment with your school’s financial aid department. If your school determines that you fall into the category of special circumstances, they may be able to adjust your financial aid package through a process known as Professional Judgement.
And, with that, I leave you to file your FAFSA. Leave a comment below to share any other ideas for how to maximize your financial aid.
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