We consistently get questions about paying for college. Unfortunately, the cost of higher education is only going in one direction. It is rare these days to be able to pay for college out of pocket, especially if there are multiple children in the family.
Financial aid is something that every family planning on sending a youngster to college should look in to. And with the deadline to file the Free Application for Federal Student Aid or (FAFSA) quickly approaching, we figured it would be a good time to talk about it.
The FAFSA not only determines the eligibility for federal student aid, but many schools use the FAFSA to determine eligibility for scholarships, grants and additional loans.
As a reminder, the FAFSA deadline is June 30, 2021, at 11:59 p.m. Central Standard Time (CST). The deadline to make any corrections to your FAFSA is September 11, 2021, at 11:59 p.m. Central Standard Time (CST).
Whether you’re filling out your FAFSA for the first time or simply confirming your information from last year, there are a few things you can do ahead of time to help make the process easier. You can do everything online, from either your desktop computer or from their mobile app.
Step #1: Creating Your FSA ID
Creating a Federal Student Aid (FSA) ID isn’t required, but it can be a useful place to start. Having an FSA ID allows you to electronically sign your FAFSA letter and any loan documents you may receive. If your child will end up filling out the FAFSA at any time in the future, they will need their own FSA ID.
If you already started your FAFSA, you can set up your FSA ID along the way, but creating it ahead of time can make the process easier.
Step #2: Gather All Needed Documents
The FAFSA will determine financial aid eligibility based on your personal financial situation. You’ll need a few documents to prove your identity (your Social Security number and driver’s license number) as well as any supporting financial documents. Remember, if you plan on mailing in the FAFSA, do not send any of these documents in with your application.
You may need some (or all) of the following, depending on your situation:
- Federal tax information or tax returns including IRS W-2 information for you and your spouse
- IRS 1040
- Records of your untaxed income
- Asset information including things like cash, savings and checking account balances, investments and business and farm assets
Step #3: Selecting Colleges or Career Schools
To complete your FAFSA, at least one school must be selected. While the order doesn’t matter for federal aid, some states have different requirements to receive state funding. You can check online through the Department of Education to see if your state has this particular requirement.
Step #4: Transferring Your Tax Information
When filling out your FAFSA online, the IRS offers a Data Retrieval Tool (IRS DRT). Using the IRS DRT saves you the hassle of having to locate your tax records and instead connects you with the IRS database.
Step #5: Signing & Submitting Your FAFSA
Once you’ve filled out your FAFSA, you’re ready to sign and submit it. While you can print off the documents to sign and submit them through the mail, your FAFSA will likely be processed quicker if you sign and submit it online. You’ll be able to sign and submit your FAFSA electronically using the FSA ID you created earlier.
If you have other children in college, you can automatically transfer your information to another child’s FAFSA form if you filled the original FAFSA out online.
Remember, the FAFSA needs to be completed for every school year that your child attends.
Financial aid is often a necessary stepping stone to higher education, and there is absolutely no shame involved in applying for it. Filling out the FAFSA is an important step for you, and your child, or grandchild’s future. We hope this post help you take it!
Have a teen interested in investing? Check out a recent podcast we recorded about the topic here!