There are a lot of financial advisors out there who are anxious to sell you insurance,…
During my past 8 years in Financial Aid, I have seen many mistakes made by parents and students throughout the Financial Aid process. Many of these mistakes could have been avoided and a lot of time saved if the FAFSA (Free Application for Federal Student Aid) was completed correctly. Submitting a FAFSA that is error-free also will reduce your chances of being selected for verification. Avoidance is key, but if you have already messed up, it’s pertinent to learn how to fix FAFSA mistakes.
Here are 7 common FAFSA mistakes that I have seen.
- Indicating that you have a Bachelor’s: This happens a lot to students entering their final year of college. They mistake the question, “Do you have a Bachelor’s Degree?” for, “Are you working on a Bachelor’s degree?” The FAFSA year, however, is not the same as a calendar year. The FAFSA year runs from July 1st through June 30th.
- Mistaking your refund for taxes paid: Many individuals think that since they received a refund, they did not pay taxes. This is not the case. A refund is actually the government giving you money back for overpaying your tax liability. Not entering the information accurately can increase your chances of being selected for verification. The taxes you paid can be found on your tax return: 1040EZ line 13; 1040A line 37; 1040 line 56.
- Overstating your assets: A common error that families make is overstating their assets by including equity in their primary residence or even including their retirement accounts in their asset total. Only equity in a second home or rental property needs to be included on the FAFSA. Never enter your retirement accounts or cash value in an Annuity or Life Insurance policy.
- Not registering for Selective Service (males only): For incoming college freshmen just out of high school this is an easy way to register for the Selective Service if you have not done so already. Males between the ages of 18 and 26 are required to register for the Selective Service. After 26, if you have not registered you will not be able to and you will not be eligible for Financial Aid.
- Not linking taxes to the IRS: In recent years the Department of Education has partnered with the IRS to allow parents and students to have their tax information pulled from the IRS database. This can help to ensure the information you submit is accurate. It can also limit the time and documentation needed if you are selected for verification. When trying to do this, make sure you have your taxes available and enter the information exactly as it reads on your tax return. This will increase the likeliness of the IRS linking your taxes to your FAFSA.
- Leaving information blank: If something does not apply to you simply enter $0 for your amounts. Leaving items blank can increase your likelihood of being selected for verification. If you are not able to link your taxes make sure you are entering an amount in each line.
- Failing to Submit the FAFSA because you think your income is too high. As we regularly mention in our workshop, studies have shown that parents with incomes over $200,000 often get more merit aid than families with much lower incomes. You also need to remember that if you have any years when two or more students will be in school at the same time, your EFC is cut in half which may make you eligible for a substantial amount of financial assistance.
These are some of the simplest tips on how to fix FAFSA mistakes. For more common FAFSA mistakes check out the Department of Education’s blog “Several Common FAFSA Mistakes” or “10 FAFSA Mistakes That Affect Financial Aid” on Fast Web.
Also remember that we are here to help you. FAFSA preparation is a free service to all My College Planning Team clients.