It’s less than 48 hours until the official application of college financial aid.
October 1st is the first day for college students to start applying for grants and other financial aid for the academic year 2020-21 through the Free Application for Federal Student Aid(FAFSA).
In the 2017-2018 academic year, for example, over 18 million applicants filled out the FAFSA forms, according to the report by the U.S. Department of Education.
Even as the official applications for aid launches, students are encouraged to ensure that their application details are accurate. They must also have them submitted as early as possible to avoid missing the priority deadline.
Here are some of the costly mistakes that students must avoid:
Failing to Apply
One mistake that students and their families can make is failing to apply for financial aid via the FAFSA. Most families have a diminishing and erroneously thought that since they fall into a particular income bracket, they don’t qualify for the grant.
That’s not true whatsoever as each family’s financial position is judged from an individual’s point of view. Parents and children must apply for this financial aid regardless of the social and economic statuses.
During the 2017-2018 academic year, for example, the standard amount of aid extended for each full-time equivalent student was $14,796, that’s according to a report by the College Board. Grant aid accounted for $8,974 of the said amount.
In 2017, high school graduates missed out on $2.3 billion in federal grants for failing to fill out the FAFSA at all.
Playing a waiting game on Paperwork.
If you’re a student and you are searching for state financial aid, then you must file the FAFSA on time.
It’s because the state aid is finite. There more than a dozen states — Alaska, Illinois, Indiana, Kentucky, Nevada, North Carolina, North Dakota, Oklahoma, Oregon, South Carolina, Tennessee, Utah, Vermont and Washington where the aid is issued on a first-come, first-served basis until the entire allocation is disbursed.
The states, as mentioned above, have a fixed allocation of the funds that’s only available until it runs out. It, therefore, means that if you’re late on your FAFSA applications, you may have to settle for loans in place of grants.
Making Data Errors
Well, this is another mistake that happens in most cases through assumptions or unaware. There are, however, some errors that are common whenever applicants submit their application for financial aid. Here are some of these errors, ensure that you avoid them at all cost each time you fill out the FAFSA:
- Adding retirement assets in calculations. Money that you hold in a 401(k) or a personal retirement account are not assets on the FAFSA. Annuities, Insurance policies, and home equity too are not part of the consideration.
- Confusing the students’ and parents’ sections. Students may find themselves putting down their information in the FAFSA section that’s meant for the parents and vice versa. Such information is easily ignored, yet they can cause one to miss financial aid.
- Using a nickname, in place of your legal name. Most students have nicknames which becomes part of them to the extent that they use them primarily in everything. FAFSA requires that applicants use their legal names and not nicknames while applying for the financial grants.
You can minimize or eliminate the application mistakes by using the IRS data retrieval tool. This tool automatically populates your FAFSA with all your federal tax return information.
Failing to fill out the FAFSA because you think your family income is high
Most students are not aware that filing for FAFSA also puts you in the running for aid that is not necessarily tied to the family income. A good number of colleges give out some non-financial need-based aid, As much as the percentage of students differ from school to school. Five schools-Rhodes College, Franklin W. Olin College of Engineering, and the New England Conservatory of Music, in the academic year 2016-2017 gave out non-need-based scholarships or grants to about 50% of their students. That is, according to USA Today.
Note: There are individual schools where families with annual incomes near $200,000 still received need-based aid.
Failing to file the special circumstances form in case income drops
FAFSA’s financial need is calculation depends on income from the previous tax year. If you are a self-sponsored student, you may be on a lower salary because you returned to school a year before and quit your job. Also, as a dependent student, you could be with a parent whose income dropped since the year before. If either is the case, ask to fill out a special circumstance form from the office of your financial aid. If you do that, your financial aid package will be determined using your existing financial circumstances. Ensure that you fill out the form as soon as possible so that you don’t miss out on any aid that is given on a first-come, first-served rule.
Most students have failed to get the necessary financial aid because of the FAFSA mistakes that they could have otherwise avoided. The above discussed are some of the mistakes that you must avoid so that they have no impact on your chances of getting financial aid.