College Planning: Mastering the FAFSA
As students wait to hear back from their first-choice schools, the U.S. Department of Education gets ready to open the Free Application for Federal Student Aid (FAFSA ) form for the 2024-2025 school year. The FAFSA is used to determine a student’s eligibility for federal student financial aid for college or graduate school. The financial aid through FAFSA includes grants, work-study, and loans. Many states and colleges will also use the FAFSA information to determine eligibility for institutional aid, including scholarships and grants offered directly by the school’s financial aid program.
Filling out the FAFSA as opposed to taking out private student loans is that the FAFSA takes into account your family’s financial situation, considering factors such as income, assets, and household size, which is used to calculate your Expected Family Contribution (EFC). By completing the FAFSA you may also be eligible to receive low-interest federal student loans. These loans often have more favorable terms than private loans, providing a cost-effective way to finance your education while providing flexible repayment options when the time comes.
Here are some key tips to help you get started:
▪ Start Early: Begin your FAFSA as soon as possible to avoid last-minute stress. To make the process go as smoothly as possible, we also recommend gathering all necessary financial documents such as tax returns, W-2 forms, and records of untaxed income. This will help to streamline the application process.
▪ Use the IRS Data Retrieval Tool: Beginning in the 2024-2025 school year, students who are filling out the Free Application for Federal Student Aid (FAFSA) form will no longer be directed to the IRS to get tax records for income verification purposes. The IRS has partnered with the Department of Education (ED) to simplify the online process of applying for federal student aid and Income Driven Repayment (IDR) plans. The new change in tax code allows the IRS to provide the limited tax information necessary to verify income for these programs directly to ED. The approval covers the release of tax data to the college or career school’s financial aid office and the annual recertification of income for adjustment of student loan repayment plans.
▪ Include All Schools: Include all colleges and universities being considered in the application to ensure that all potential options have received your financial information for aid consideration.
▪ Understand the Dependency Status: Your dependency status determines whose information needs to be reported when you fill out the FAFSA form. If you are a dependent student, you’ll report yours and your parent(s) information. If you are an independent student, which is uncommon, you’ll only report your own information (and your spouse’s if you’re married).
▪ Seek Professional Guidance: If you are unsure about any aspect of the FAFSA form, don’t hesitate to seek help. School counselors, financial aid officers, financial advisors, and online resources can help you complete the form.
▪ Understanding Deadlines: As with any form, make sure you understand when the federal deadline is as well as the state and schools’ deadlines are, as they differ depending on the state and institution. The FAFSA form for the 2024-2025 school year must be submitted by June 30th, 2025.
Completing the FAFSA is a crucial step in accessing various forms of financial assistance to make higher education more affordable. Even if you think you may not qualify for grants, it’s still beneficial to fill out the FAFSA to explore all available options for funding your education.
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