Lynn O’Shaughnessy offers some excellent FAFSA tips that can help maximize your chances of getting financial aid.
1. Don’t provide retirement assets
Families can dramatically hurt their chances for financial aid if they include assets from their 401(k) plans, Individual Retirement Accounts, 403(b) and other qualified retirement accounts on the FAFSA. The financial aid form only requires that you share non-retirement assets.
2. Don’t include business assets
Parents who have a family-owned and controlled small business do not have to report the company’s net worth on the FAFSA if it has fewer than 100 full-time employees.
3. Skipping deadlines
Colleges impose deadlines on families to submit their financial aid forms, and these dates can be much earlier for students applying through early decision and early action options. Find out what the deadlines are, and don’t miss them.
4. File early
Although there are essentially no federal deadlines for seeking financial aid, states do impose deadlines for families who hope to qualify for financial aid through their state programs. State deadlines can be as early as February. In some states, aid is given out on a first-come, first-served basis, so it’s best to file your FAFSA well ahead of the state deadline.
6. List the most current marital status
You need to provide your marital status — divorced, separated or married — on the day that the FAFSA is filed. Separated and divorced parents will sometimes enjoy a financial aid advantage.
7. Have the right parent complete the FAFSA
In families of divorce, the parent who has taken care of the child during the majority of the 12 months dating from the day the FAFSA is submitted is considered the custodial parent. This can be especially advantageous in families when one ex-spouse earns significantly less than the other. Ideally, the child would live with the lower-earning parent for at least six months and a day. This parent would complete the FAFSA, and the other parent’s income would not be included. If the custodial parent remarries, however, the income from the new spouse would also be included on the FAFSA.
8. Avoid blank answers
If the answer to a question is zero or not applicable, write “0″ or “Not Applicable” on the online form. Leaving blank answers can cause miscalculations.
9. Pay attention to graduation rates
When you complete the FAFSA and designate that the application be sent to specific schools, the FAFSA website will provide you with the graduation rates of each school on your list. Try to avoid schools with low graduation rates.
10. Don’t inflate your education
Plenty of schools will give applicants brownie points if they are considered first-generation college students. If parents didn’t graduate from college, select “high school” as the highest education attainment.
Regarding #7: Every week it seems I hear about another variation that raises doubts about who the “right parent” is.
The latest one was a case where the parents are divorced and the student lived with a grandparent for most of the past year. The answer hinges on which parent actually has legal custody, but there may be other mitigating factors. It can get complicated, and sometimes it is advisable to notify the college about unusual circumstances.
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