Nothing is more appealing to soon-to-be/current college students and their parents than free money. However, it’s mind-boggling how so many families fail to fill out the Free Application for Student Aid (FAFSA) form each year.
The cost of college can be stifling to most families, so you certainly don’t want to miss out on this opportunity. Each year, the FAFSA opens on Oct. 1 and you’ll want to file as close as possible to the start date to improve your chances of qualifying for the most grant, scholarship and work-study aid
With that being said, the process of filling out the FAFSA form has changed over the years. You need to make sure you’re in the know so that you don’t leave money on the table. Below are the changes and updates made to the 2020-21 FAFSA form and process along with tips for filling it out.
Changes To The 2020-21 FAFSA
- After major changes each of the past two years, the form itself and platform for filing underwent few major changes. According to college planning experts, there were some updates to expected family contribution allowances and calculations, however, including the following:
- The Income Protection Allowance for a family of four with two college students was increased to $26,080.
- The typical family will see their expected family contribution increase by about $350 based on the changes to the Asset Protection Allowance provisions.
- The allowance for student wages before those earnings impact the expected family contribution was also increased from $6,660 to $6,840. This works out to about 10 hours per week during the school year and 20 hours per week during the summer at an average hourly wage of about $13.00.
- The Income Protection Allowance for a family of four with two college students was increased to $26,080.
- And remember, these changes went into effect in 2019 and should continue to aid your ability to navigate and use the platform:
- The fafsa.gov website has been redesigned so that the site pages will fit the screen size and shape of any device, including desktop or laptop computers and mobile devices.
- Students and parents can complete the 2020–21 FAFSA form using the myStudentAid app. Students and parents may download the myStudentAid app.
- The online FAFSA form provides faster feedback. For example, students now receive error notifications as they complete the form’s fields rather than via future notification.
- The fafsa.gov website has been redesigned so that the site pages will fit the screen size and shape of any device, including desktop or laptop computers and mobile devices.
Have All The Right Documents Ready
To complete the 2021 FAFSA Application, you will need your:
- Social Security Number
- Alien Registration Number (if you are not a U.S. citizen)
- Most recent federal income tax returns, W-2s, and other records of money earned. (Note: You may be able to transfer your federal tax return information into your FAFSA using the IRS Data Retrieval Tool.)
- Bank statements and records of investments (if applicable)
- Records of untaxed income (if applicable)
- FSA ID to sign electronically. To create one, go to Studentaid.gov.
- If you are a dependent student, then you will also need most of the above information for your parent(s).
Not Sure If You’re Eligible? Fill It Out Anyway
A common financial aid myth is that students with parents that have high-paying jobs will not be eligible for FAFSA – wrong! Everyone should fill out a form, regardless of your financial situation. FAFSA is not just the application for federal grants but it is also necessary for low-interest student loans, work-study programs, as well as scholarships and grants from schools, states, and private organizations.
You should complete the form so you don’t miss out on possibly thousands of dollars to help pay for your child’s college. Don’t fall for these myths about financial aid: https://studentaid.ed.gov/sa/sites/default/files/financial-aid-myths.pdf
Also, you may not need financial aid now, but anything could happen. If you do need aid in the future, the process will be much easier if you’ve already filled out the form.
Use the FAFSA4caster tool to see your estimated eligibility
Fill Out The Form ASAP
The new FAFSA form was made available October 1, 2019, on fafsa.ed.gov. Last year the date was moved up from the previous date of January 1. The earlier submission gives you more time to complete the FAFSA before college deadlines. This means you’ll have more time to apply for other financial aid and to compare schools to ensure you’re making the right choice.
Use the IRS Data Retrieval Tool
Along with earlier application dates, you can now use previous tax information from two years ago, That means you no longer need to estimate – speeding up the process and eliminating errors.
Learn more about how the IRS Data Retrieval Tool works.
Renew Your FAFSA Every Year Of College
Another financial aid myth is that after a student’s first year, they no longer need to worry about filling out FAFSA – wrong, again!
The amount of federal aid your child qualifies for in one year does not carry over every year. Also, changes in your family’s financial situation could impact the amount of financial aid your child qualifies for in future school years.
To Sum Things Up:
Affording college can be a challenge for any family regardless of their situation, but it’s not impossible. By utilizing the tips above and additional resources such as other forms of financial aid and College Savings Plans, affording college can be more manageable than you think.
In addition to these tips, you can also learn more about the 7 Biggest Mistakes Parents Make When Saving For College. And be sure to check out our ongoing Family and Finances blog series where we continue to provide financial insights for high earners and their families throughout 2019.
Have additional questions regarding FAFSA or College Savings Plans? Contact our team of Financial Advisors today!