6 Common Mistakes to Avoid When Filling Out Your Federal Financial Aid Form
Filling out the Free Application for Student Aid form — better known as a FAFSA — can be long and arduous, yet yield thousands of dollars in subsidized loans for students. Due to the amount of time it typically takes to fill out, there are some common mistakes the Federal Aid Office has seen often enough to bring to the attention of students and parents.
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Here are the six most common mistakes you want to avoid to ensure you receive the most amount of financial aid:
Not Filing
The Federal Student Aid office lists this as their #1 mistake for good reason. Many often avoid filing all together even though they are eligible. They claim some of the reasons they usually receive for people not wanting to file is fear of it being too difficult or believing they will not qualify. They urge that this is not the case and that there is no income cut off when it comes to federal student aid.
The FAFSA form is also not just for Pell Grants, but also the application for Federal Work-Study funds, federal student loans, and even scholarships and grants offered by your state, school or private organization.
Not Differentiating Your Info From Your Parents’
Both the student’s and their parent’s financial information needs to be included in the FAFSA application — separately. The government needs to not only to be able to assess the financial picture of the entire household but each person individually. If the child has income that exceeds the parent’s for example, this could affect the amount of aid given.
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Not Disclosing Accurate Financial Information
You do not need to disclose every one of your financial holdings in the FAFSA form, but you DO need to disclose real estate holdings, their value and any rents you receive — although the value of the home you currently live in does not need to be included. Your 401k and retirement account contributions are also among the assets that are not necessary to report. A specific outline of things that do not need to be included can be found here.
Using Parent’s FSA ID
Both the parent AND the student need their own separate FSA IDs if the student is a dependent claimed on their parent’s taxes and if you and your parents both want to sign the FAFSA form online. It is highly recommended to not share FSA IDs with each other, as this could cause delays or problems with your financial aid. Given that financial aid is on a first come first serve basis, this could cost you thousands of dollars in aid — or aid altogether.
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Not Using The IRS Retrieval Tool
Filling out the financial information is the most difficult part of the FAFSA process, but thanks to a direct link to the IRS, students and parents who are eligible can automatically transfer all the information from their 2019 taxes into the 2021-2022 FAFSA form using IRS Direct. It eliminates the possibility of errors, and the office of Federal Aid says it’s the fastest, most accurate way to enter your tax return information into the FAFSA form.
Not Considering Yourself a Dependent Student
The Federal Student Aid office states that even if you fully support yourself, pay your own bills and file your own taxes, you may still be considered a dependent student for federal student aid purposes. Dependency guidelines for financial aid are determined by Congress and are different from dependency guidelines from the IRS. They stress that if you’re considered a dependent student and don’t provide parent information, your FAFSA form may not be processed and/or you may qualify for loans you might have to pay back.
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Last updated: Sept. 15, 2021
This article originally appeared on GOBankingRates.com: 6 Common Mistakes to Avoid When Filling Out Your Federal Financial Aid Form
