Smart Money Moves
Your monthly guide for Financial Aid Information: Aug 2020
Three Ways the FAFSA Can Help You Pay for College
The FAFSA is quick, FREE, and is now mobile-friendly, which means you can now complete and submit your application all on your smartphone. The FAFSA is available online on the Federal Student Aid Website beginning October 1st.
If you are not sure how FAFSA can help you pay for college, check out these three ways the FAFSA can help.
1. The FAFSA grants access to federal, state, and school-based financial aid
Filling out the FAFSA is the only way to be considered for Federal Student Aid, and will also allow you the chance to be eligible for state grants and school-based, or Institutional Aid.
The FAFSA asks for personal information, along with data on your parents’ income, tax status, and assets.
You’ll also need to meet a few basic FAFSA requirements, such as:
- Be a U.S. citizen or eligible noncitizen
- Be on track for your high school diploma (or have already graduated with it)
- Maintain satisfactory academic progress (if your GPA falls too low in college, you’ll lose your eligibility for federal student aid)
The Office of Federal Student Aid looks at the FAFSA to determine how much your family can pay for college. Then, each college that accepts you uses the FAFSA to put together your financial aid award.
Every college has a different budget, so your financial aid package will look different from one school to another. At one school, you might be offered several scholarships or grants (i.e., free money), while another might only offer student loans you’ll have to pay back.
The majority of this aid will come from the federal government, but some might come from your state or even the college itself. Note that some colleges require an additional form, known as the CSS Profile, before doling out their own grants or loans.
2. The FAFSA provides your Expected Family Contribution (EFC)
Although your financial aid offers might vary from school to school, one point will stay the same: your Expected Family Contribution, or EFC. Your EFC is an index used by your Schools Financial Aid Office to determine how much and what types of Aid you are eligible for.
The Office of Federal Student Aid looks at the information you provide on the FAFSA to calculate your EFC. Colleges look at your EFC to determine your eligibility for financial aid. For example, let’s say a college costs $32,000 per year, and your annual EFC is $20,000. In this case, you would have a $12,000 gap in funding.
Some colleges may generously fill in this gap with grants and scholarships. Others will offer you a mix of grants and loans. Schools with a smaller budget might not be able to fill in the entire gap with federal financial aid.
If that’s the case, you’ll have to take extra steps as you figure out how to pay for college. You could apply for more Scholarships, apply for a private student loan for extra funding, or you might choose a different school with lower tuition costs.
Note that you should fill out the FAFSA even if your family has a high income, since not all aid is based on financial need.
Even if you don’t think you’ll qualify for financial aid, it’s a good idea to submit the FAFSA every year you’ll be attending college.
3. Some scholarship organizations also consider your FAFSA
Colleges aren’t the only institutions that look at your FAFSA before granting you financial aid. Some Need Based Scholarships will also ask for your FAFSA data to ensure that you meet the criteria for demonstrating financial need. Make sure that you fill out the FAFSA as early as you can, so you won't miss out on Scholarship opportunities that may help you pay for college.
Filling out the FAFSA in 3 Easy Steps
Now that you know why you should fill out a FAFSA, you may be wondering how to fill it out. Don't worry, filling out the FAFSA is quick and easy!
1. Signing up for an FSA ID
Both you AND your parent will need to sign up for an FSA ID. (Only one parent will need to sign up, not both.) The FSA ID is the legal equivalent of your written signature, and allows you to electronically sign your FAFSA. Signing electronically is the easiest and quickest way for you and your parents to submit your FAFSA.
Get started on creating your FSA ID's here. The 2021-22 FAFSA application will open for applicants on October 1.
**Be aware that each of your target schools will have a Priority Filing Deadline for Financial Aid, which can vary by each school and be as early as December 1st. The best way to make sure that you meet those deadlines is to file your FAFSA as early as possible after October 1st.**
2. Gathering Tax Return Documents & Using the IRS Data Retrieval Tool (IRS DRT)
The 2021-22 FAFSA requires the use of the student and parent(s) 2019 Tax Return information. Please note, you will not be able to use any other Tax Return year.
Once you begin filling out the FAFSA, you will be asked for personal information and questions about the student and parents tax filing status. While you can manually type in the information as reported on your IRS Tax Form 1040, be very careful that you do not mistype any numbers or make a mistake when entering the data. Simple typing mistakes could create issues with your FAFSA later on. The easiest way to be sure that your Tax Information is reported accurately is to the use the IRS Data Retrieval Tool.
The IRS Data Retrieval Tool (IRS DRT) allows you to import the student AND the parents 2019 Tax Information directly into the FAFSA by asking you to validate information printed on your IRS Tax Form 1040. Using the IRS DRT is quick and accurate, and greatly reduces the chance that your FAFSA may be selected for additional Verification. Verification is a process where your School is required to ask you for additional documentation that supports the information you reported on your FAFSA. This process can sometimes take several weeks to complete and can delay processing of your Financial Aid, so be sure to respond to any requests promptly.
3. Filling out & submitting the FAFSA
Set aside time to sit down with your parent(s) and log into the FAFSA by going to www.fafsa.gov. Make sure to log in using the students FSA ID. Read and answer each question carefully. When progressing to the Financial Information section of the FAFSA, try to use the IRS Data Retrieval Tool (IRS DRT) as discussed above. If you cannot use the IRS DRT, then carefully enter all requested Tax Information. After answering all of the questions, both the student AND a parent will sign and submit the FAFSA.
After the FAFSA application has been submitted, you will not be able to make any edits for several days while it processes. Within 5-7 business days, you will receive your Student Aid Report (SAR), which is a summary of information reported on the FAFSA.
Read and review your Student Aid Report (SAR) for accuracy, and always remember to keep a copy for your records.
How NC Residency Determination can Impact your Tuition Costs
Under North Carolina law, in order to qualify for In-State Tuition, you will need to show that you have established your legal residence in North Carolina and have maintained that residence for a certain period of time before enrolling in College. If you forget to complete the RDS interview, you may be subject to paying Out-Of-State Tuition costs, which can be significantly more expensive.
Completing your Residency Determination is quick and easy, and can be completed entirely online. Click HERE for details and to get started!