What is the FAFSA and how can it help me?

As students begin thinking about college and how they will pay the ever increasing cost of attendance, the FAFSA or Free Application for Federal Student Aid should come to mind.  However, many students, and their parents/guardians don’t understand the importance and process of FAFSA completion.

So why is the FAFSA so important?  Quite simply, it is the first step in the process of finding loans, grants and scholarships that will help the student pay for their higher education pathways.  For students whose parents/guardian have limited or no income, completing the FAFSA opens doors for ‘need based’ funds.  These include the Pell Grant, Work Study opportunities, the Federal Supplemental Opportunity Grant, and many scholarships specifically made available to students who have been deemed eligible for need based funding.  Without completing the FAFSA, students who would otherwise qualify for ‘need based’ opportunities will not be able to apply for them.  For those students who do not meet the requirements to qualify for the need based funding programs, the FAFSA application will determine how much federal student loan money the student can qualify for.  

But aren’t loans a bad option for paying for school?  Loans can be tricky depending on where they come from.  Yes, we encourage students to avoid taking loans if they can, but the truth is, many students will need some loans to pay their higher education expenses.  In those cases, federal student loans are the best options available.  These loans will either be subsidized or unsubsidized and in many cases, both!  Subsidized loans are federally backed loans that will not accrue any interest as long as the student remains in school, making satisfactory academic progress, and up to 6 months after graduation.  Unsubsidized loans are also federal loans but will begin accruing interest upon distribution to the student regardless of school enrollment. The benefit to using unsubsidized loans is that the interest rate is traditionally much lower than those offered through other banking establishments.  In addition, because they are federally backed loans, the student has multiple options for paying the loans back which include reduced payments, deferred payments for qualifying life events, and in some cases, loan forgiveness after meeting requirements for any number of Federal Loan Forgiveness programs.

So you ask, how does one complete their FAFSA?  This is a great question!  Initially the process can seem a bit overwhelming but once you have done it once, the process becomes much simpler.  First, the student and one parent will need to create an FSA ID.  This is your unique username and password that will allow you to complete a FAFSA, transfer tax data into your FAFSA, and electronically sign your application.  The FSA ID can be created by visiting https://studentaid.gov/fsa-id/sign-in/landing.  You will need to have your social security number, date of birth, your name as it appears on your social security card, a valid email address and a phone number.  Please be aware that students should not use their school email as those accounts will be deleted upon graduation from high school.  It is also important to know that both the student and parent MUST have unique email addresses as the system will only allow an email to be attached to one FSA ID.  Upon entering your information, you will be sent verification codes to your email and telephone number if you used one, to verify and validate your FSA ID.  This verification must be completed before your FSA ID becomes active.

Once you have an approved FSA ID, you will go the FAFSA.gov website where you will be able to begin your FAFSA application.  Once logged into the system you will click ‘Start Here’, select the option that describes who you are (parent, student, preparer), and then enter the FSA ID you have created.  A lot of the information will already be pre-populated for you as it associated with your FSA ID.  You will first have to complete information about the student and verify the prepopulated information is correct.  You will then be asked to select schools you want your FAFSA information to be sent to.  You can enter up to 10 so you are encouraged to enter any school you are seriously considering as a higher education potential.  The Financial Aid offices of selected schools will receive your Student Aid Report but will not do anything with it unless you submit an official application to their college/university.  Schools will have a unique number that can be located by using the search feature on the school selection page.  Should you decide to add a different school at a later date, you can log back into the FAFSA website, select returning user, and log into your application to make changes.  For the gentlemen who are completing the application for the first time, they will have to state whether or not they have registered for the selective services.  If they have not, or if they are within 6 months of their 18th birthday, they should select no and when asked if they want to be registered, say yes.  The FAFSA application will submit required information to complete the selective service registry.  This is required to be eligible for any FAFSA funds.

When it comes to entering tax information, please remember that under most cases, students are deemed dependent on their parents until 24 years of age.  A series of questions will be asked for the system to determine whether the parent information will be needed.  Because tax information can be very difficult to determine, you will be given the opportunity to have your tax information automatically entered into the application using the IRS Data Retrieval Tool.  This is the recommended method for entering both parent and student tax information as it will be pulled directly from the IRS and in doing so, will protect your information from being seen by others.  Once entered, you will be able to submit your application for review and approval.  Both the student and the parent will use their FSA IDs to electronically sign the application and indicate that the information entered is accurate to the best of their knowledge.  Remember, no are not bound to any financial terms by completing the application.  You will have an opportunity at a later time to accept or decline any aid you are offered.

I have completed my FAFSA application, now what?  Within 2-3 days, the student will receive an email containing his/her Student Aid Report or SAR report.  This will show the information entered into the application and the student’s EFC or expected family contribution.  This number can be anywhere from 0 to 999999.  The lower the number, the higher level need the student has for need based aid.  It is this number that will determine the amount of Pell grant, Federal Supplementary Opportunity Grant, and Work Study the student qualifies for.  The EFC will also be used by the Financial Aid Office at the college or University the student chooses to attend to determine additional student aid opportunities the student qualifies.  In addition, the EFC may be required to be included in any need based scholarship applications the student completes outside of the FAFSA application.

So when does the FAFSA need to be done?  The FAFSA is only good for 1 year and must be resubmitted with updated information for each year the student plans to attend college.  The application opens October 1st each year for the following academic year.  So for example, students who plan to start school the fall of 2023 will be able to apply for their FAFSA beginning October 1, 2022.  Because need based funding is not unlimited, students are strongly encouraged to complete their FAFSA no later than December 1st.  The earlier the student completes the application, the more money will be available should s/he qualify.

In closing, please remember that EVERYONE should complete a FAFSA to maximize the funding opportunities available.  There is nothing to lose by filling out the application as the application does not commit the student or parent to accepting the money offered.  For help in completing your FAFSA, please contact a Financial Aid Officer at your school of choice or visit FAFSA.gov.

Reach Higher Montana is passionate about helping Montana high school students achieve personal success in education, career, and life. Our advisors can help guide you along your individual path. To find the closest advisor to you, click here. Stay informed, sign up for our newsletter and like our Facebook and Instagram page so you don’t miss out.