Every year around this time, college students, potential college students, and sometimes parents of college students examine their financial situations and begin applying for financial aid. The Free Application for Federal Student Aid (FAFSA) is the most effective way to do so—filling it out puts students in the running for $236 billion in federal, state, college-based, and local forms of aid and benefits. Aid comes in the form of loans, grants, and work-study programs, as well as tax breaks.
But what also happens every year around this time, is that students leave their potential aid packages on the table. They make mistakes, and don’t correct them, bumping them to the back of the aid line. And as financial aid expert Mary Fallon explained in a Jan. 4 story with OnlineColleges.net, that’s a line people want to be in the front of.
By waiting for state deadlines, she explained, students can miss out on available federal financial aid. They are also decreasing the likelihood they’ll get as much as they could from a school or state funding package by waiting long after Jan. 1.
The FAFSA has a lot of ways for people to make mistakes. There are 130 questions and 450 data points—that’s 450 items students could fill out incorrectly. Fallon, who works as a communications consultant for Student Financial Aid Services, a fee-based service that fills out the FAFSA with families and answers questions year-round, said there are several common and costly mistakes students – particularly adult students – make when filing.
- Dependency Status: Many students believe that they should be able to declare independent status for the FAFSA because they live on their own, file their own taxes, or receive no support for their parents, but that’s not necessarily true, she said. Students are only considered independent if at least one of the following criteria is met, for the 2013-2014 school year:
- The student was born before Jan. 1, 1990.
- The student is married.
- The student has a child or children who receive more than half their support from the student.
- The student has dependents, other than a child or spouse, who receive more than half their support from the student, and who also live with the student.
- The student is enrolled as a graduate or professional student.
- The student is a qualified veteran of the U.S. military, or is currently serving on active duty in the U.S. military.
- The student is an orphan or ward of the court or in foster care after age 13, or was a ward of the court until age 18.
- The student is or was in a legal guardianship.
- The student is or was an emancipated minor.
- The student was an unaccompanied youth who was homeless or at risk of being homeless on or after July 1, 2012.
- The student has unusual extenuating circumstances that would qualify him or her for a “dependency override,” which is granted in rare cases, and is only granted by schools and not the government.
- Assets: Many students, particularly adult students, have questions about their assets, Fallon said. Purchased homes, while they count as assets for federal income tax, do not count as assets for the FAFSA. Family businesses do not count as assets. Some real estate counts, and some does not.
- Military Status: Many students have the misconception that if they are receiving aid from one of the 17 military programs that provide it, that they shouldn’t fill out the FAFSA because they won’t receive more aid. That’s not at all the case, Fallon said. Receiving military-specific aid from other sources does not reduce the amount of aid military students can get through the FAFSA, and they are still eligible for federal, state, and school-specific aid.
Mistakes that people frequently make on the FAFSA can be avoided by reading the help available on the official FAFSA site, by calling the FAFSA help line, or by hiring professionals at a fee-based service to help fill it out and answer questions.
Follow Anna Schumann on Twitter at @AnnaTSchumann.