Avoid These 10 FAFSA Mistakes

It’s FAFSA time. Parents of college-bound teens and current college students are amping up to file this all-important financial aid document.

The sooner you complete the Free Application for Financial Student Aid (FAFSA), the better. Securing financial aid through the FAFSA is a crucial part of the college application process. Colleges disperse their financial aid based on the information they receive from this form. However, the financial form is complex, and any mistakes can lead to delays, reduced aid, or even loss of eligibility.

Many parents turn to accountants for help, just as they do to file those pesky IRS forms. But, if you pay attention, read the questions carefully, and check for mistakes before you file, there’s really no reason why you can’t fill this form out yourself. And if you're really stuck, you can also ask the college financial aid office for help.

Avoid these 10 common FAFSA mistakes to maximize your financial aid package:

1. Leaving blank answers.

Some applicants mistakenly leave fields blank instead of entering a zero when the answer is none or zero. This omission can cause errors and delay processing your application. If the answer is zero, type “0” or N/A. Make sure every applicable field has an entry, even if it is zero!

2. Entering the wrong income information.

Providing incorrect information, such as Social Security numbers, dates of birth, or income figures, will affect your eligibility for financial aid. Double-check all entries to ensure accuracy. Your FAFSA will ask you to provide the federal income tax you paid or will pay based on your most recent federal tax return – not the tax withholdings on your W-2 forms (Note: If you don’t have your federal tax return ready yet, estimate using last year’s return. You can always file an update once your return is complete.)

3. Waiting to file the FAFSA until your taxes are done.

The sooner you submit the form, the sooner the colleges will be able to access the information and use it to determine financial aid. Additionally, the amount of aid available to you shrinks the longer you wait to submit your FAFSA because other applicants take advantage of it. If you’ve filed your 1040 that’s great; but don’t wait until April 15 to complete the FAFSA!

4. Forgetting to list the colleges.

You can include up to 10 colleges that your college-bound teen has applied to. Adding all schools to the FAFSA form ensures that these schools will get your information directly once the form is processed.

5. Not creating an FSA ID in Advance

You need a Federal Student Aid (FSA) ID to complete and sign your FAFSA. You’ll use this username and password combination to log in to the U.S. Department of Education online systems. Both the student and one parent (for dependent children) need an FSA ID. Creating your FSA ID beforehand can save you time and prevent last-minute issues.

6. Not listing the most current marital status.

You need to state your current marital status on the day you sign the FAFSA, whether you are married, separated, or divorced. This information can be tricky to determine if you don’t fall into the obvious categories. Read the instructions carefully, and if you have questions, ask FAFSA representatives online or by phone.

7. Failing to sign the FAFSA

The FAFSA form requires signatures from both the student and a parent for dependent students. Forms missing any signatures aren’t processed. Use your FSA IDs to sign electronically.

8. Assuming you won’t qualify for financial aid because of your home equity.

The FAFSA doesn’t even ask if you own a house, so the amount of home equity is irrelevant. The FAFSA does ask about second homes or real estate investments, however.

9. Not understanding dependency status

Many students mistakenly assume that they are an “independent” when filling out the FAFSA. However, the FAFSA has specific criteria for determining dependency status. FAFSA often requires independent students to provide less parental information. Double-check the criteria to determine your correct status.

10. Assuming your family income is too high to file the form.

Even though you might not qualify for need-based aid, you should complete the FAFSA. Colleges use its information to determine all kinds of aid, including merit-based aid (which is not based on need).

Don’t fear the FAFSA. Start yours now. If you discover you have made a mistake, you can always submit a correction online. The most important thing is to get it filed ASAP so that the colleges will have your information when they determine and disperse the awards. Remember: take a proactive approach to managing your application. Happy applying!