Common FAFSA Mistakes and How to Avoid Them

First of all, if you haven’t heard of FAFSA here is a quick summary on what it is.  FAFSA stands for the Free Application for Federal Student Aid and is an important first step in accessing financial aid to help pay for college.This form will need to be filled out each year in order for a student to get awarded financial aid.

MISTAKE #1 - NOT FILLING OUT THE FAFSA EARLY

The FAFSA opens October 1st every year. It is important to fill out the FAFSA early!  Colleges award need based aid on a first come first serve basis. Therefore, in order to ensure you are given the money you deserve you want to fill out the FAFSA as early as possible.  If you are not sure what college you want to attend in October you can always log back into your account and add more colleges at a later time.

Remember to check the college deadline as well, make sure you don’t miss any of the federal, state, or school deadlines for submitting FAFSA! 

MISTAKE #2 - FILLING OUT THE INCORRECT FAFSA

Depending on the time of year there may be two FAFSA’s available to fill out. Make sure you fill out the FAFSA for the year you will be in college.  If you are a current senior in high school you will be filling out the 25-26 FAFSA.

In addition to filling out the correct FAFSA, make sure you answer all of the questions.  If you leave a question blank it can lead to miscalculations or even rejection of the application.  If a question doesn’t apply to you, enter “0” or “N/A” instead of leaving it blank.

MISTAKE #3 - INVITING PARENTS AS CONTRIBUTORS TO THE FAFSA

When you fill out the student section of the FAFSA you will be taken to a page that asks to invite parents or parents as contributors. There are certain situations where you would only invite one parent and other situations you would invite both.  Here are some example:

• If parents are married (not separated) and filed a joint tax return - only invite one parent.

• If parents are married (not separated) and file separate tax returns - invite both parents.

• If biological mom or dad is remarried and filed a joint tax return - only invite biological parent

• If biological mom or dad is remarried and filed separate tax returns - invite both your biological parent and step parent

• If parents live together but are not married - invite both parents

• If parents were never married and are not together - invite one parent

• If parents are divorced or separated and living in different households - invite one parent (the parent who provided more than half of the students financial support within the last year). If parents filed a joint tax return, the parent completing the FAFSA will be asked to report only his/her income.

• If parents are divorced or separated but live together and filed a joint tax return - only invite one parent, the joint tax information will be used.

MISTAKE #4 - REPORTING BOTH PARENTS’ INCOME WHEN THEY ARE DIVORCED OR SEPARATED

If parents are divorced or separated and living in different households then you only need one parent to fill out the FAFSA even if they filed a joint tax return. It is important to note they do not need to be legally separated. The parent that should fill out the FAFSA is the parent that provides more than half of the students financial support within the last year. If they split support 50/50 then it is the parent who has the higher income. And if that parent is remarried then the step parent’s income and assets also need to be reported, even if he/she did not support the student financially. 

MISTASKE #5 - REPORTING A 529 PLAN AS A STUDENT INVESTMENT VS A PARENT INVESTMENT

If parents own a 529 plan on behalf of the student the value of the 529 plan should be reported under parent investments on the FAFSA, not student investments. Student investments are weighed much much more heavily when it comes to financial aid vs parent investments. There has also been a new change when it comes to 529 plans, parents should only report the value of the 529 plan for the student they are filling the FAFSA out for and do not include the value of 529 plans they have for other children.

MISTAKE #6 - REPORT ASSETS THAT DO NOT HAVE TO BE REPORTED

There are two protected assets that don’t have to be reported, the value of the primary home you live in and the value of any retirement accounts the student or the parents own. 

If you have completed the FAFSA and realized you made a mistake you can log back into your account and click on “make FAFSA corrections” and resubmit.

Make sure you take your time filling out the FAFSA, it could save you thousands of dollars. Remember to click on the little “i” button next to each question for more information about what to report on that particular question.