Mark this date on your calendar: October 1. That is the day when current and future traditional college students can start submitting the Free Application for Federal Student Aid (FAFSA) for the 2022-23 school year. For many students, the FAFSA is frequently the gateway to significant financial aid, including federal and state student loans, grants, university scholarships, and work-study programs.
FAFSAs should be sent in as soon as possible.
It seems a bit unusual, but it is a fact that some financial aid is awarded on a “first-come, first-served” basis. The closer to “opening day” (October 1) you can do file, the better. Don’t wait until October 1 to start gathering the information you need. If you do, it might be more stressful than it needs to be. Below is a list of the information you’ll need to complete the form.
What do you need to complete the FAFSA form?
First of all, your student needs an FSA I.D., and if your student is your dependent, you also need one. An FSA I.D. is a username-password combination that will let your student fill out the FAFSA form online (this can even be done with the myStudentAid mobile app on your smartphone). You can create your FSA I.D.s at pin.ed.gov. You can fill out the FAFSA form at the FAFSA website, fafsa.ed.gov, entering numeric codes for the colleges or universities your student is considering for the 2022-23 school year.
Your student will need to enter personal information, some of which will be yours if you have recently claimed them as a dependent. The basics include birthdates, Social Security numbers, and the student’s driver’s license number, if applicable.
Financial information is also required, both from you and your student, including checking and savings accounts’ balances, investment account values, and business and rental property assets. Untaxed income (such as interest income and child support) must also be reported. In addition, you will need information from your 1040 income tax form for the 2020 tax year. Most of this tax information can be easily imported right into the FAFSA form, thanks to its Data Retrieval Tool, which connects directly with the Internal Revenue Service. Not everyone is able to use the DRT, though, and not all info carries over, so keep your 1040 forms from 2019 handy.
Has your household income fallen since 2020?
If so, your student might qualify for more financial assistance than the FAFSA form calculates. A student can appeal an aid decision or ask for an adjustment to financial aid offered at any time, even during the midst of a quarter or semester.5 If you or your student need to pursue an adjustment, the first step will always be contacting the financial aid office of the school or institution in question.
You may have some leverage due to the uncertainties surrounding COVID-19. Enrollment is dropping at many universities, due to the pandemic, and the perception that pricier schools can’t currently offer a real college experience. Virtual classes might still be the norm in the Fall 2022 term. Attracting quality students is a top priority, and financial aid offices may be ready and willing to negotiate new aid packages well into the 2020-23 academic year.
Whenever a college considers awarding financial aid, it looks at the expected family contribution (EFC), which is calculated according to a formula set by law. The EFC is the amount of money the college believes you can pay toward your student’s education, and the EFC factors heavily into calculations of need-based aid (as opposed to merit-based aid, like scholarships).
If it sounds complicated, there’s good news: in addition to the application itself, the FAFSA website contains excellent information to help you understand the process. You can find it at https://studentaid.gov/apply-for-aid/fafsa/filling-out. Start familiarizing yourself with the process soon, and you’ll be on your way when the gates open on October 1!
Andrea L. Blackwelder, CFP®, ChFC, CDFA® and Joseph D. Clemens, CFP®, EA are the founders and partners of Wisdom Wealth Strategies. Their shared passion is simple: to bring financial empowerment, understanding, and peace-of mind to people who wish to improve their financial future, build wealth for their families, and achieve financial independence. Click here to find out more about how you can work with the Denver Financial Advisors at Wisdom Wealth Strategies.