The FAFSA: Now Available!
Let's talk about the FAFSA, the Free Application for Federal Student Aid. There have been several changes to the FAFSA over the past few months, and now it is time to make sure you understand and are ready for the FAFSA. There are several important pieces that you need to understand about the FAFSA: availability, prior-prior year, and the data retrieval tool. We will also explore the PHEAA grant and FAFSA4caster.
What is the FAFSA?
The FAFSA is a form from the federal government that is used by colleges to determine how much financial aid you need. The FAFSA will ask about income, assets, and more through tax returns for you and your parent(s)/guardian(s). A full list of what is needed to complete the FAFSA can be found here. Before completing the FAFSA, you should also create a FSA ID for you and one of your parents/guardians. The FSA ID is how you will electronically sign the FAFSA. You can go here to create an FSA ID and also watch this video all about the FSA ID.
After completing the FAFSA, it will generate a number called the EFC, or expected family contribution. This is not a guarantee saying that your family must pay this amount, but the EFC is the number that helps to determine your demonstrated financial need. Colleges may vary on how they determine this need, so it is always recommended to communicate early with a college's financial aid office and never be afraid to ask questions!
Keep in mind, the FAFSA is free to complete and only takes about 20 minutes! You should NEVER have to pay money to complete your FAFSA. By completing the FAFSA, it makes you eligible to receive a few different types of federal financial aid. You may be eligible to receive a Pell grant, which is gift money that you do not have to pay back. Additionally, you will be eligible to receive federal student loans. These loans are beneficial because they have lower interest rates than a loan you can get from a private bank. A lower interest rate means less money you have to pay back in the long term. There are a few different types of federal loans, so be sure to check out the page all about student loans.
when to complete the FAFSA
The FAFSA came out on October 1st! This is a HUGE change compared to previous years where there FAFSA was not available until January. According to The Chronicle for Higher Education, many colleges have rolled out an adjusted financial aid timeline. This means that you could receive your financial aid package sooner, but also that financial aid deadlines may be earlier. It is best to check on a college's website to see when their financial aid deadline is. You do not want to miss out on receiving FREE money to help pay for college.
Prior-Prior year information
In another recent change, the FAFSA now uses prior-prior year tax information. What this means, is that students filling out the 2016-2017 FAFSA will use 2015 tax returns. You should not be using any tax information from 2016! By this point, everyone who files taxes will have their 2015 tax returns, allowing everyone to put in exact data instead of having to estimate income and assets.
If your family has had a significant change in finances during 2016, you will need to contact the financial aid offices for each college you are applying at as soon as possible. The financial aid office may be able to use professional judgment and may be able to alter your financial aid package to reflect the change in finances. When in doubt, you should always call the financial aid office!
IRS Data Retrieval tool
A big benefit of using the 2015 (prior-prior) tax information is it will allow the student and parent to use the IRS Data Retrieval Tool. The Data Retrieval tool allows you to electronically transfer information from the IRS database and it will populate the specific sections of the FASFA for you! This saves you from having to go line-by-line through your tax returns, and eliminates any mistakes that could have happened by you or your parents typing in the information. There are a few requirements to be able to use the Data Retrieval Tool, which are outlined here on the FAFSA website.
PHEAA
In addition to doing the FAFSA to receive Federal financial aid (pell grant and federal loans), you can
also receive the PHEAA grant from Pennsylvania by completing the state grant application. The PHEAA grant is another form of aid that would be considered "gift money," meaning that you do not have to pay it back.
There are two ways you can go about completing the state grant application. First, when you complete your FAFSA, at the end you will be prompted to follow a link and complete your state grant application. If you completed your FAFSA and did not click on that link, the second option is that you can go to the PHEAA website and create your account. Both options will take you along the same pathway. The state grant application will also use financial information, but it will pull that data from your FAFSA, and you will not have to re-enter those numbers.
FAFSA4caster
Another way to prepare yourself for the FAFSA is to complete the FAFSA4caster. This is a free tool that will help you determine your eligibility for all types of federal financial aid. Once you complete the FASFA4caster, it will generate a worksheet for you where you can add in schools you are interested in attending and the total cost of the school, and it will create an estimate of what type of federal financial aid you could receive and how that will impact the costs of a particular college for you. This is an excellent tool to use in conjunction with a college's Net Price Calculator, which will give you an estimated financial aid package from that college. You can find the FAFSA4caster on the Federal Student Aid website or here.
With this knowledge in hand, you will be able to complete the FAFSA with ease! Please send any questions to pagoestocollege@gmail.com.
