January is here and many families are preparing to complete their college financial aid forms. Completing the Free Application for Federal Aid or FAFSA is required for families so that they can get their Expected Family Contribution or EFC. The EFC number is generated after inputting your personal financial information and is necessary for families to get any federal or state financial aid. This includes both loans and grants.
Before you start this process get organized and gather the following information. This will help to make the process go faster and may take some of the stress out of the form completion. The forms your need to have handy are:
- Personal information including student and parents full name, birthdays and social security numbers
- Most recent tax form for both parent and student (if applicable)
- Current balance of savings and investment accounts
- 2014 year-end paystub
If you also need to complete the CSS Profile form you will need the above information plus totals on tuition for other sibling and sibling financial information.
What happens if your taxes are not done? In this case a family can use their tax information from last year and estimate this year taxes. Once your taxes are completed you can go back and fix the FAFSA form. This is called a correction. It is important to remember that the parent’s FAFSA form will be verified by the federal government. The IRS Data Retrieval Tool or DRT is able to transfer your tax information directly onto the FAFSA form. This tool updates the FAFSA information with the actual tax information that was submitted to the IRS. This is why it is so important to be accurate when completing the FAFSA form.
For entering freshman, you need to submit an initial FAFSA normally by mid-February. Check each of the school deadlines. It is recommended that you update the FAFSA with your actual tax information or best estimate by late February. The colleges begin creating the financial award letters around March 1st. If the initial FAFSA information varies greatly from your verified tax information the college will adjust the award letter after verification.
Why should every family submit a FAFSA? We encourage our clients to submit a FAFSA form. The submission of the FAFSA form will allow a family to be eligible for the Unsubsidized Stafford loan. The unsubsidized Stafford loan is not based on need and is available to families who submit a FAFSA form. Having this loan option available is important for several reasons:
- Changes can occur in a family’s financial situation due to the loss of a job or death
- Debt of the loan is in the student’s name
- Better student loan repayment options fall under the student’s name
- Federal Student loans have limits per year that are not carried forward
If you are having difficulty with the detailed financial information needed for the FAFSA application there are a lot of helpful, free information available to aid in this calculation. The Department of Education provides the expected family contribution through two methods. The actual FAFSA process gives the family their EFC number after completing the form and the government has a FAFSA4caster which is an estimate of your EFC number. Families can also go to the College Affordability’s website resource section where there are many useful videos that explain the college financial process.
College Affordability has also just released a new software product for families called EFC PLUS. This software will help families with the FAFSA application as well as give families an informative four-year estimated college debt analysis.
Remember that simple errors in the FAFSA application can delay a student’s financial aid application so double-check your work. Check your name, address and social security and make sure you haven’t transposed any numbers before your final submission. Good luck and remember to get your FAFSA application in on a timely manner.