This post was updated on November 21, 2015.
The FAFSA (Free Application for Federal Student Aid) gets your student consideration for nine separate federal student-aid programs, over 600 state aid programs, and most of the college-based (institutional) aid available in the United States. When’s the best time to fill out the FAFSA Form, and what tricky questions should you watch out for when you fill it out?
Savvy parents fill out the FAFSA on the first day it can possibly be submitted every year that they have a kid in college the following fall. Why? Families who are the first to jump in line for free federal financial aid money may receive twice the grant money of those who fill out the form later.
Note: dates for submitting the FAFSA have recently changed.
President Obama changed the financial aid application process for every college bound student on September 13, 2015.
If your child is a high school senior set to graduate in May or June of 2016 (and likely headed to college in the fall of 2016), the earliest date you can fill out the FAFSA form will be January 1, 2016.
If your child is not yet a high school senior, then your target date for filling out the FAFSA is October 1 each year that you have a child in college the following fall.
Special notes for parents of high school seniors set to graduate high school in Spring 2016:
If you don’t have your previous year’s tax information available when you fill out the FAFSA on January 1, 2016, that’s OK. Estimate figures early in January based on your most recent December 31 pay stub or your last year’s tax return, and then return to the FAFSA and amend the numbers when your tax forms for the previous year are complete. (Make a note about this in your calendar so you don’t forget.)
In addition, you’ll be in the rather odd position of needing to fill out the FAFSA form again on October 1, 2016 if your child will remain in college during the 2017-2018 school year.
Besides applying early, here the top four most surprising ways to get extra money out of the FAFSA form:
1. Always leave certain assets off of the FAFSA form. For question 89, which asks: “What is the net worth of your parents’ investments, including real estate,” do not list the value of any (parent or child) retirement plans, pensions, annuities, or insurance policies (including whole-life insurance policies that may have cash value), and do not list the value of the home you live in. Many families leave thousands of dollars in financial aid on the table year after year because they include the value of these items when they answer question 89.
2. Be careful about how you reveal the value of your family’s non-homestead real estate. If your family owns a rental property, lake cabin, or second home, don’t enter its market value. Instead, start with the property’s “quick-sale value.” (According to the IRS, “quick-sale value” equals 80% of the property’s fair market value, or what it could sell for quickly.) Then subtract any debt owed on it. The number you get when you do this is the true value of this property for financial aid calculation purposes.
3. Report the largest household size that FAFSA policy will allow. Adhere to FAFSA policy and always include the student in the FAFSA parent’s household size, even if the student didn’t live there at all during the previous year. Include all of the student’s siblings who are under age 24 if the student’s FAFSA parent is paying more than half of those siblings’ support. Include in the household size any new baby that has been born recently or will be born during the next nine months as long as the FAFSA parent will be providing more than half of that baby’s support. Include any other people (such as elderly relatives) living in the household if the FAFSA parent provides more than half of their support.
4. Protect your child’s opportunity to be labeled a “first generation college student.” When you’re asked for a parent’s highest level of educational attainment, don’t list “college” unless that parent actually graduated from college. If the parent attended some college but didn’t graduate, report the highest level of educational attainment for the parent as being “high school.” (The student may be treated more favorably in the financial aid evaluation process if he or she is considered a “first-generation” college student.)
If you’re filling out the FAFSA form soon, I can give you a lot more help with this topic. Click on the free, clear, step-by-step checklist I provide for parents entitled “What to do in January of 12th grade.” You’ll be able to instantly download a free PDF that provides more detail on this subject.
Question: What little-known strategies have you heard of for getting the maximum amount of money out of a FAFSA form? LIKE Jeannie Burlowski on Facebook and let’s talk about it there.
Who is Jeannie Burlowski?
Jeannie Burlowski is a full-time author and speaker. She helps parents set their kids up to graduate college debt free and move directly into careers they excel at and love. Her book LAUNCH: How to Get Your Kids Through College Debt Free and Into Jobs They Love Afterward is due out in 2016. To get Jeannie’s best help, subscribe to her free weekly email newsletter using the form on this site, and open it every single time it lands in your email inbox. Follow her on Twitter @JBurlowski.
“We only got around to doing a fraction of what Jeannie tells people to do, and we saved well over $50,000 on college costs. Our daughter earned a four year degree from an excellent private university at age 20, and she’s now in California happily working her dream job at Disney. Get to one of Jeannie’s live classes if you can. Buy a plane ticket if you have to!” — Liz and Tim Weatherhead, parents, Bloomington, MN