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5 Ways To Nail The FAFSA

Jean Chatzky  |  October 1, 2020

Much like doing your taxes, filling out the FAFSA is never going to be painless, but these tips will certainly make it easier.

Note: This is a sponsored article, and it’s a part of a paid campaign, The Other Talk with Citizens Bank.

On Oct. 1, 2020, FAFSA — the Free Application for Federal Student Aid — launched for the 2021 school year at StudentAid.Ed.Gov. If you’ve got college applications in your immediate future, the best thing you can do right now is fill the darn thing out. Not doing it is the No. 1 mistake parents make, says VP of Research, Mark Kantrowitz.Kantrowitz.  His analysis of the 2015-2016 college application season showed that 2 million people who didn’t file would have qualified for at least some aid via a Pell grant (which doesn’t have to be repaid), and 1.2 million would have qualified for the whole thing. They left $10 billion on the table. These, by the way, are not just low-income people — about 2% of those who would have qualified had six-figure incomes.  

If your financial picture has changed drastically from when you filed your 2019 tax returns, you’re not alone — the FAFSA will take into account your pre-pandemic salary — to determine your expected family contribution. Once you file it, before you’re admitted to your college(s) of choice, reach out to the schools and let them know you’ll need an additional look where financial aid is concerned. But for now, don’t worry about that. Just start early by filling out the FAFSA, and then get ready for a process that could — and likely will — take well into 2021 to sort out.  

Filling out the FAFSA

So, in the words of Nike, “Just Do It.” And, as you do, here are the top five things to keep in mind. Much like doing your taxes, it’s never going to be painless, but these tips will certainly make it easier.

Use the app

Please, please, do not try the pen and ink version. It’s just not worth it because the Department of Education has streamlined the web application. It’s like doing your taxes with a web program (like TurboTax) versus filling out the form by hand. Plus, filing the FAFSA online is completely free. And, this year, for the first time, there’s a FAFSA app that may be even easier for the generation that always seem to have a mobile phone in hand. Kantrowitz, who delved into the demo version, deemed it “nicely designed” and “almost fun.”  

Do it early

Bottom line: On average, students who file the FAFSA in the first three months get twice as much grant money as those who file later, says Kantrowitz. There are a number of reasons for this including state aid which is awarded (in about two dozen states) on a first-come-first-served basis, and campus aid, which can (at some schools) similarly run low late in the season. Note: I’ve heard from some parents worry that if they apply for aid their child will be put into a different admissions pile. About 100 schools are truly need-blind. The remainder do consider it, but experts say need doesn’t often factor into the equation. The one exception is admitting students off the waitlist. At that point, much (sometimes all) of the aid has been given, which can favor students who don’t need it.

Use the IRS data retrieval tool

In prior years, about ⅓ of FAFSA application were subject to verification — essentially an additional step where you have to provide documents that show that the income on your FAFSA is correct. Using the IRS’s data retrieval tool which pulls your tax information directly into the application without you having to enter it, reduces the chances of verification. Kelly Peeler, founder of, a free service that helps students and parents through the financial aid process via text messaging, notes that it wasn’t in the demo version of the app.  

Gather all your paperwork beforehand

Before you even sit down at your computer, you should have everything you need handy — not just those tax returns (though, again, you can and should pull them in), but your bank account statements and any investment information are all necessary. (See a full list of the documents and information you’ll need here.) Having everything in front of you will make the process go a lot faster. And while you’re being diligent, going through the process you’ll be asked to create two passwords — one for the parents and one for the student. “Store them in a secure and easily findable place,” Peeler says. “Lost passwords are one of the biggest reasons we see students not finish filling out the forms.”

Finally, don’t just think about now, think about the future

My ex-husband likes to say “assets are fungible.” What he means is that you can shift them around from category to category — using cash, perhaps, to pay off a mortgage boosting the equity you have in your house, which you’ll get back when you sell — and they have approximately the same value. Funging (if that’s even a real word) assets can be a big help for financial aid purposes, because you can maximize your aid eligibility by shifting “reportable” FAFSA assets like cash and investments in nonretirement accounts into “nonreportable” FAFSA assets like retirement accounts and, for the most part, homes. (Two hundred private colleges do consider home equity, Kantrowitz notes.) Bottom line: If you have cash in the bank, using it to pay down debt and putting as much as possible into retirement plans can help not just this year, but in years to come.

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