Time to File the FAFSA!

By Coach James   Over the last few weeks thousands of families have scrambled onto the FAFSA website, trying to be the first ones to complete the application. Now they are eagerly awaiting a reply from their student’s prospective colleges to see how much financial aid will be offered. The entire financial aid process can feel overwhelming, so the CAA Coaches wanted to use our blog space to discuss what the FAFSA is and why it is important.   There are several reasons to submit a FAFSA. The FAFSA, or Free Application for Federal Student Aid, is the qualifying document for federal need-based financial aid, which can include grants, student loans, and work-study. And if parents want the option to apply later for a federal parent PLUS loan, a FAFSA must be submitted. Most states also require that the FAFSA be completed to determine a student’s eligibility for state aid. Finally, most colleges use the FAFSA as the basis to determine a family’s need and distribute their institutional need-based aid. Needless to say, it is a pretty important document.   The FAFSA asks for financial information from the student and her or his parents. Keep in mind that the FAFSA has its own rules for determining dependency status and who is the student’s parent, which are explained in detail within the FAFSA’s notes section. This year’s FAFSA, the 2016-2017 version, will ask questions concerning the 2015 tax year, and it became available on January 1st, just as it has for years. However, there are some major changes coming to the entire FAFSA process, starting with the 2017-2018 version, so keep your eye on the CAA blog this summer for advice regarding those updates.   Most families are unable to file their taxes on January 1st, so you may wonder why and how families file the FAFSA so soon.   First, why? Generally, need-based aid is distributed until it runs out, especially federal aid. Colleges tend not to hold too much aid in reserve for fear of not giving out enough to entice students to enroll. It is because of this that many colleges and state-aid programs have deadlines for when to submit the FAFSA. The earliest of these deadlines that I’ve seen is February 1st, but they vary by institution and state. Our advice is to file the FAFSA in January to meet any existing state and college deadlines.   But how are people filing the FAFSA without taxes? The FAFSA allows families to use estimates on their initial application and then make updates after their taxes are filed. Although CAA encourages families to try and be as accurate as possible with their estimates, it is better to file the FAFSA early and “save your place in line” than to wait for tax returns and potentially miss aid opportunities. The great thing about the FAFSA is that it’s easy to correct errors and estimates online after it’s submitted.   This may seem like a lot of “hurry up and wait,” but once the FAFSA is filed, it only takes a few days for the document to be processed. However, after your FAFSA is successfully processed, it may still take a few months for colleges to send you the finalized financial aid offer. This is another reason to get the FAFSA submitted early, as it may allow you to receive award packages well before “National College Decision Day” on May 1st.   CAA wants clients to know that they are not in this alone. CAA Coaches can answer any FAFSA question and review FAFSAs with taxes to help clients make any necessary corrections.