How important is it that you complete your financial aid forms – particularly the FAFSA – properly? VERY! So how do you go about doing this? You need to understand what each question means and respond to it accordingly. Unfortunately, there are people that come to us after they have incorrectly completed their FAFSA enlisting our help in making the necessary corrections. Sometimes their mistakes are simple to fix, other times it is complicated, and then there are times that the cat is out of the bag and the correction won’t rectify the error that was made. It is always Signature College Counseling’s goal to work with our families ensuring that the FAFSA is completed properly to provide the correct information to every school that the student is applying to, providing the school the ability to correctly assess their financial aid position and award them the maximum amount of aid possible.
Top 10 Common Mistakes People Make on the FAFSA
Below are the common mistakes we see people make when completing the FAFSA – that can potentially mean tens of thousands of dollars to the bottom line when it comes to receiving financial aid. Read each one through and make sure you aren’t one of those people who realize the error of your ways after it is too late.
1. Missing the College’s Financial Aid Priority Deadline
Look on the college website to learn the college’s financial aid priority deadline. If you don’t submit your forms by the deadline, you are not guaranteed any funds – even if you have demonstrated need!
2. Not Using the FAFSA IRS Data Retrieval Tool
The IRS Data Retrieval Tool, which is within the FAFSA, allows you to bring your data from your tax return directly into your FAFSA form. Why do you want to do this? First, it is guaranteed that you won’t make an error entering any of your tax information. Second, if you don’t use this tool colleges will wonder why not and it raises a flag for you to potentially get audited for financial aid – something you want to stay away from. Keep in mind that there are some people that cannot use the IRS Data Retrieval Tool for a variety of reasons (e.g., your identity has been compromised in the past, you are separated or divorced and didn’t file separate tax returns, to name a few).
3. Transposing Digits / Entering Cents on the FASFA Form
It is important that you only enter whole dollars and review your answers prior to submitting. For example, entering $395,634 vs. $935,634 in parental non-retirement assets can mean the difference between receiving aid or not.
4. Indicating Inaccurate Marital Status
Do not anticipate what your marital status will be at some point in the future. Report your marital status as of the date filed.
5. Not Using the Correct Parental Information
We see divorced or separated parents reporting both parent’s income and assets or the wrong parent’s income and assets. The parent that the student spent most of their time with for the year is the parent’s income and assets that should be listed on the FASFA.
6. Not Including Step-Parents’ Children in Household Size
As long as the step-parent spends at least 50% in supporting their children, they can be included in the household size number reported, even if they don’t live with them. This provides a credit in calculating your Expected Family Contribution, which is a good thing.
7. Not Reporting Step-Parent Financial Information
Even though step-parents are not the biological parents of the child heading to college, if they are married to the parent of that child and living in their household, their income and assets need to be reported. Why? Because they contribute to the household.
8. Mistakenly Reporting Retirement Assets and Primary Home Equity
Only non-retirement assets and secondary home equity (not your primary home!) is reported on the FAFSA. Think about this, if you have $500,000 in retirement assets and you unknowingly report this on your FAFSA that will add $25K to your Expected Family Contribution! This could mean the difference between receiving aid or not. Same thing with reporting your primary home equity.
9. Not Reporting Unusual Circumstances to the School’s Financial Office
If you have had a significant event that affected your finances after you completed the FAFSA, report it to the school (loss of employment, illness in the family that caused high medical expenses…etc.). You can file an appeal and potentially receive additional aid.
10. Failing to Apply for Financial Aid
If you don’t file a FAFSA, you will, with all certainty, not receive any financial aid and if you want to take out a federal direct student loan and/or a parent PLUS loan, you HAVE TO complete the FAFSA. Our advice to all of our families: complete it, you have nothing to lose.
Don’t make one of these common FAFSA mistakes. Take the time to completely and accurately fill out the FAFSA application.
Looking for help with the college admissions and FAFSA process? We help students and families through the entire college planning journey from search, and essays to interview prep, financial aid consultation and final school selection.
Contact us at info@signaturecollegecounseling.com or by phone, 845.551.6946. We work with students through Zoom, over the phone and by email.
