Now, for the first time, the Free Application for Federal Student Aid (FAFSA) will be available starting October 1. Families must complete the FAFSA to qualify for need-based aid. In this post, you’ll learn who should file the FAFSA and whose financial information must be included.
5 Reasons Why It’s Important to File the FAFSA
But before I say any more, I want to give you 5 reasons why it’s important to file the FAFSA. The truth is, many families don’t realize what a huge mistake it is to skip the FAFSA.
Undecided about whether or not to apply? Here are some of the reasons why you should file the FAFSA:
- To be eligible for federal student loans. Federal student loans have the best repayment options and interest rates.
- To express interest in campus work-study jobs. Best of all, work-study does not count as part of the student’s income.
- To be eligible for federal PLUS loans for parents. Parents who cannot meet the expected family contribution will often resort to loans.
- To qualify for state financial aid. Even if you don’t qualify for federal aid, you can still qualify for state aid. Some state aid is need-based and some is merit based. You forfeit both of these by not filing the FAFSA. To learn more about the most overlooked source of college cash for middle- and upper middle-income families read 5 Ways to Stop Leaving Money on the Table.
- To qualify for merit aid at some schools. Merit aid policies vary. Contact each school you are applying to to find out if you risk missing out on merit aid by not filing the FAFSA.
How to Know Who Should File the FAFSAKnowing who should file the Free Application for Federal Student Aid (FAFSA) may seem simple, but oftentimes it isn't. Click To Tweet
Knowing who should file the FAFSA may seem simple; however, oftentimes it isn’t as easy to know who should file the FAFSA as you might think. Here are the rules about who should file:
Traditional Married Couples
For traditional married couples–husband, wife and kids–it really is straightforward. Both the mother and father will share their financial information on the FAFSA as well as the student.
A Parent Has Died
Don’t include the financial information of a deceased parent on the FAFSA. However, if a parent has died after filing the FAFSA, contact the school(s) immediately with this information.
Divorced and Separated Parents Still Enjoy A Significant FAFSA Advantage
The parent with whom the child has lived most during the 12-month period ending on the day the FAFSA was filed would submit the form. Here’s how it works:
Jay lives with his mother in New Jersey where he attends high school. He lives with his father in Florida whenever school is out. Jay’s mother is the custodial parent because Jay lives with her more than half of the time. Jay’s FAFSA application will report the $50,000 a year earned by his mother. However, Jay’s FAFSA will not include the $150,000 a year that his father earns because Jay doesn’t live with his dad as much as he does with his mom. In this case, Jay’s dad is the non-custodial parent. Remember, the non-custodial parent does not have to file the FAFSA. Only the custodial parent has to file the FAFSA.
What if Jay lives with his father in Florida where he attends high school? In this case, Jay’s father is the custodial parent because Jay lives with his dad more than half the time. Jay’s FAFSA application will report the $150,000 a year earned by his dad. However, Jay’s FAFSA will not include the $50,000 a year that his mom earns because the federal government considers her the non-custodial parent.
Separated parents are treated the same as divorced couples so long as they are not living together. Separated parents do not have to be legally separated to be treated as divorced parents. Who should file the FAFSA depends on which parent the child lives with more than half of the time during the year leading up to the FAFSA.
New Rules About Who Should File the FAFSA Level the Playing Field a Bit
In the past, if you fell into either one of the following two categories you enjoyed a FAFSA perk. That’s because you were allowed to file using only one parent’s financial information.
In recent years, however, FAFSA rules have changed. Now, the FAFSA requires financial information from both parents. The result is a more level playing field in most cases. Here’s how it works:
Unmarried Parents Living Together
Now, unmarried parents who live together must complete the financial aid application jointly. Until recently, only one of the parents had to share his/her financial information. Now, unmarried parents living together no longer have a FAFSA advantage over traditional married couples.
Married Same-Sex Couples
Now, same-sex partners that are married must both include their financial information on the FAFSA. Previously, only the biological parent had to file the FAFSA.
Unmarried Same-Sex Couples Involved in Adoption
If one of them has adopted the other partner’s child, then both will have to share financial information on the FAFSA.
Unmarried Same-Sex Couples Without Adoption
However, if a partner has not adopted the child, only the biological parent will file the FAFSA.
Court-Ordered Legal GuardiansIf the student lives with a court-ordered legal guardian, the student should file the FAFSA as an independent student. Click To Tweet
If the student lives with a court-ordered legal guardian, the student should file the FAFSA as an independent student. Here’s what you need to know:
- guardianships established by an attorney don’t count
- the court must have created a legal guardianship
- assigning legal custody isn’t enough
The federal government doesn’t consider a court-ordered legal guardian (or foster parent) a parent. That’s why the student will include only his or her information on the FAFSA. Any support that the guardian gave during the base year should be reported as the child’s untaxed income.
There’s a good chance that filing as an independent student will trigger the verification process. Check your email regularly and respond promptly to requests for verification. Failing to do so means you may not get awarded on time for the start of school.
Foster parents or grandparents who adopt a child are considered as parents by the federal government. In this case, the student will file the FAFSA as a dependent student. The adoptive parents must submit their financial information on the FAFSA.
Undocumented parents are not eligible for federal PLUS loans for parents. However, any student that is a U.S. citizen or a legal resident should still file the FAFSA even if their parents are undocumented. That’s because the student may qualify for federal student loans, work-study, state aid and merit aid.
Processing your FAFSA may require additional steps because your parents don’t have a social security number. That’s because the federal government relies on social security numbers to verify information. Without social security numbers, the federal government has to use other means to verify your parents FAFSA information.
What does this mean for you? You should apply well in advance of your school’s financial aid deadline. By doing so you will allow for the additional time needed to process your FAFSA.
Remember, in this case delay does not mean denial. Your biggest challenge will be to comply with all requests for additional information as quickly as possible to increase your chances of getting awarded in time to start classes.
Be sure you know which email address to check daily for updates. Always keep a copy for your records of all documents and communication with the financial aid office. That’s because you may have to submit a document more than once during financial aid peak season when things are more likely to fall through the cracks.