Personal Finance 101 Conversations: Episode 14, FAFSA 101
Take a stroll through each screen of the online FAFSA to see what information you’ll need on hand to complete the application quickly and accurately.
Also in the PF101 Conversations video series:
Episode 15: College Choice 101
From tiny private colleges to gargantuan urban universities, there are enormous implications to your choice of a school and a major. This video will help you develop a perspective and a framework for making these important decisions.
Episode 16: Financial Aid 101Watch this short video to get your bearings in a seemingly endless sea of financial-aid options. Grants, scholarships, loans—you name it—we cover it in this informative clip.
Know what time it is? It’s time to start thinking about college–where you’re gonna go and how you’re gonna pay for it. While we can’t help you figure out where to go, we can definitely help you figure out how you’re going to pay for it!
To begin with, you have to fill out what’s called FAFSA, if you want to be eligible for any state or federal student loans and grants, or financial aid from the college you are attending. FAFSA stands for Free Application for Federal Student Aid. This is the way that the federal government, state and your college determine how much money you’re eligible for in the form of loans and grants. Loans will have to be paid back at the end of college, while grants don’t have to be paid back at all—as long as you meet the eligibility requirements for that grant.
The FAFSA is easy to fill out and it really doesn’t take very long, you just need a couple of things before you get started. You could use the paper form and mail it in the old-fashioned way, but it’s a whole lot faster and easier to just use the online version at www.FAFSA.gov.
First of all, if you’re still living with your parents, part or all of your financial-aid eligibility is determined by your parents’ income and financial situation, so you’re probably going to need their help with this, or they may choose to complete a portion of it on their own.
Let’s talk for a second about deadlines. Each state and each school have their own deadlines, and then there’s the federal deadline as well, which is June. It’s really important when you look at the FAFSA web site (www.FAFSA.gov) that you determine for your own state, and for the schools that you’re looking at, what your deadlines are, then make sure you complete your FAFSA before the earliest deadline.
Before you begin, make sure and have a few things handy that’ll make your FAFSA experience go really fast and easy. You’ll need your Social Security card your driver’s license, if you have one. You’re going to need the previous year’s tax forms for both yourself and your parents. You’re also going to need bank statements for both of you and any current business and investment records you and your parents have. If you and/or your parents don’t have a bank account, you’ll still need tax information and information about any forms of public assistance you receive. Resident aliens will need alien registration and resident card information, as well.
All right ready? Good. Let’s go. The first screen you’re going to cover the basics—name, social security number, date of birth…I’m pretty sure you’ve got this.
After the basics, you’ll have a chance to review. Make sure you’ve got that Social Security number right! At this point you should set up your federal student-aid PIN or personal identification number. You’ll use this number to digitally sign your FAFSA. To set up your PIN, you simply click the button that says apply for a PIN. This form will ask for some basic info like your Social Security number, name, date of birth, address and so on.
After you set up your PIN, you’re going to choose the year you’re attending college. At this point you’ll be asked to create a password. The password allows your form to automatically save every couple of minutes. You could walk away from it for a few minutes or even a few hours or a few days, and when you come back that password will allow you to pick right up where you left off. This is different than the PIN you created in the last step, so make sure to remember them both.
OK, there are six basic parts to the FAFSA—student demographics, school selection, dependency status, parent demographics, financial information, sign and submit—and that’s it! Let’s get started!
The student demographic information section is easy, because it’s all about you! Your name, social security number, date of birth, address, residency, telephone number, e-mail address, marital status, driver’s license number—nothing tricky here!
The next street screen looks at student eligibility. Are you a citizen? Will you be graduating from high school? Is this your first year of college? What type of degree or you seeking? Do you want to do work study? (Work study is an opportunity to work an on-campus job to help cover part of your own living expenses.) Do you already have a bachelor’s degree? And, how much schooling have either of your parents had? Again, no tricks here!
On the next screen you’ll choose what high school you currently attend. They make this pretty easy—you just put in the school name, city, select your state, then you get a list of options to choose your school from the official list.
The school selection section is pretty similar to choosing the high school you go to. You’re just going to use the drop-down to select as many schools as you’re applying to and add them to your list. Alternatively, if you know the codes from your school, you can enter them here. On the school selection summary page you’ll be asked to select your housing plans for each of your potential schools. Whether you’re planning to live on campus at one school but off-campus at another—and maybe even with parents at a third school—you’ll have the chance to make all of these selections on your school selection summary page.
The dependency determination section is also pretty easy—just a lot of yes or no questions. Were you born before 1990? Are you married? Are you working on a master’s degree? Do you have children or other dependents? They shouldn’t be very difficult, but if you’re uncertain about any of these, make sure and ask your parent or school counselor.
You’ll probably want to get your parents’ help for the parent-demographic section, since it asks for things like their social security numbers, dates of birth and household size.
OK, financial information! Let’s be honest, this is the section everyone’s afraid of. I’m here to tell you there is NO reason to be afraid! You’ll definitely want a parent’s help with this part, and as long as you’ve got recent tax forms, bank account statements and any investment information that you or your parents might have—you’re going to breeze right through this. You may even be able to link to the IRS web site and import all of your tax information, depending on when you and your parents filed taxes and your FAFSA deadline.
The tax questions are pretty straightforward and mostly come right from your W-2 and 1040 forms. Remember, you can pause and look at your forms and come back to the FAFSA as often as necessary!
After the tax information, the FAFSA has questions about your parents’ assets, the balance in their bank accounts, the value of their investments—not including retirement investments—and the net worth of any businesses they own.
After your parents enter their tax information, you’ll be asked to enter your tax information—again, you may be able to import this right from the IRS web site. Keep in mind any savings accounts or savings bonds that you have when answering the questions about your own net worth.
Whew, that wasn’t so bad! In the last section, you’ll have the opportunity to review your basic information—name, social security number, et cetera—and then use the PIN you created earlier, and finally file your FAFSA. That feels pretty good doesn’t it?
For more information, check out www.FAFSA.gov.