I’ve given a lot of FAFSA workshops over the years and I have a few opinions on the best way to tackle this difficult application. Without a doubt, the best way to prepare for the FAFSA is not gathering documents, talking with friends, or setting a meeting with your CPA or financial advisor (not that those things won’t be necessary at some point). Rather it’s getting a basic understanding what you’re up against. And what you’re up against are five sections. No more, no less. Here’s a summary of what to expect in each:
Section 1: Student Demographics. This is all about demographic information for the student and rarely trips up families. Address, phone number, email, selective service registration status (for males), etc. You’re off to a solid start!
Pro tip: Make sure the student lists an email his or she regularly checks, as several important communications land here after submitting the FAFSA.
By the way, it’s important to realize that in the Department of Education’s eyes this is the student’s FAFSA form. Even the questions are geared toward the student (when I mention this in my workshops it brings a lot of clarity to parents who wonder why questions are worded in one way or another). In other words, the student is in the driver’s seat on this one, not the parent(s). That’s why we start with student demographics instead of parent demographics!
Section 2: School Selection. This is where the student will identify a high school and list the colleges on his or her list. A max of 10 can be listed at one time. These schools will get the information listed on the FAFSA form to create a financial aid package.
Pro tip: This list can be amended later. Don’t delay filing the FAFSA because the list is not chiseled in stone.
Section 3: Dependency Status. In this section a group of questions determine if a student is dependent or independent in terms of the FAFSA. Notice I said in terms of the FAFSA. This means the FAFSA has its own criteria to determine if a student is dependent or independent, apart from where these terms are used elsewhere (in the tax world, for instance). Want to know what questions to expect? See this article. The result of this section – which is computed automatically and displayed on the screen – determines if a student needs to list parental financial information.
Section 4: Parent Demographics. Another (fairly) easy section here and largely mirrors the questions asked of the student in Section 1.
Section 5: Financial Information. This is the humdinger and probably where you will get stuck, frustrated or both. There are a lot of data points collected in this section. Essentially, the government is systematically gathering information on the student’s income and assets and parental income and assets. The FAFSA also asks about a few untaxed income items. All this goes into calculating a family’s Expected Family Contribution, or EFC, essentially a gauge of how much a family should be able to pay toward college every year.
Pro tip: Keep in mind a few of the questions asked here use the terminology “as of today.” Meaning you might have to log into a bank or investments account for immediate reporting of a balance.
One bright spot, though: the IRS now allows certain taxpayers to import their information automatically through the IRS Data Retrieval tool. What a relief!
I think that will get you started for now. Looking for another helpful article on the FAFSA? Check out the Department of Education’s 8 Steps to Filling Out the FAFSA® Form. If you need additional help, schedule a free consultation with Gradmetrics.