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Applying for Financial Aid: Top 10 FAFSA Mistakes

Shannon Vasconcelos

Written by Shannon Vasconceloson October 4th, 2021

I came to College Coach with close to 10 years of experience in college financial aid offices. I began my career at Boston University, where I counseled students and their parents on the financial aid process and reviewed undergraduate financial aid applications. At Tufts University, where I served as assistant director of financial aid, I developed expertise in the field of health professions financial aid. I was responsible for financial aid application review, grant awarding and loan processing, and college financing and debt management counseling for both pre- and post-doctoral dental students. I have also served as an active member of the Massachusetts Association of Student Financial Aid Administrator’s Early Awareness and Outreach Committee, coordinating early college awareness activities for middle school students; as a trainer for the Department of Education’s National Training for Counselors and Mentors, educating high school guidance counselors on the financial aid process; and as a volunteer for FAFSA Day Massachusetts, aiding students and parents with the completion of online financial aid applications.
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by Shannon Vasconcelos, former financial aid officer at Tufts University Though clearly consisting of five letters, the FAFSA, for some people, is a four-letter word. The financial aid application has an intimidating reputation, and many families dread completing it. The good news is that the FAFSA has been simplified quite a bit in recent years, with helpful skip-logic imbedded in the online version of the form, and is due to get even simpler due to legislation passed for the 2024/25 school year. While most families are able to undergo the FAFSA completion process with little difficulty, there are some common mistakes that families often make when filing the FAFSA. Take care to avoid the missteps below, and you’ll be well on your way to a smooth financial aid application process.
  1. Paying for the form: The acronym FAFSA stands for Free Application for Federal Student Aid, and, as indicated by its name, the form can be submitted free of charge on the government website: While paid preparation will soon be illegal, there are currently private companies with similar-sounding web domains who will attempt to convince you that it is impossible or unwise to complete your FAFSA on your own and will charge you money to submit a FAFSA on your behalf. Don’t buy the hype or get confused. If you’re asked for your credit card number, you’re on the wrong webpage. Back out and visit the official site.
  2. Completing the form at the wrong time: Each college has its own financial aid application deadline, and to ensure you’re considered for all available aid at your chosen schools, be sure to submit your FAFSA by the earliest deadline on your list of schools. Missing a deadline by even one day could cost you thousands of dollars in financial aid, so take care to submit your form in a timely manner. Note: Do not go overboard in an effort to submit your FAFSA early, and try to complete the form prior to October 1 of your senior year of high school. The new school year’s FAFSA does not become available until October 1, and any FAFSA submitted prior to that date is the prior year’s application and cannot be used to apply for the following year’s aid.
  3. Submitting the wrong person’s information: The FAFSA is written as if the student is filling out the form, despite the fact that it is often a parent who takes on this responsibility. Therefore, when the form says “you,” it is referring to the student. When asked for “your Social Security Number,” “your income,” etc., do not mistakenly enter the parents’ information. The form will specify when it is requesting parental information.
  4. Reporting more than you have to: When asked to report your assets on the 2022/23 FAFSA, do not include your home equity, retirement accounts, insurance policies, or any small family-owned businesses (though you should note that the small business exclusion is going away for the 2024/25 school year and beyond).
  5. Reporting less than you have to: Though the full value of your retirement accounts are excluded from the FAFSA calculations, the contributions you made to your 401k in the prior calendar year will still be counted as part of your income for the 2022/23 academic year. Any pre-tax retirement contributions should be reported as untaxed income (for now—this is also scheduled to change in the future).
  6. Income tax #1: Many families struggle when asked for the income tax they paid in the prior calendar year. It is not simply the withholding from your W-2s, as you may be required to pay more when you file your tax return, or you may receive a refund of some of your withholding. The FAFSA directs you to the proper line item on your tax return to find your actual taxes paid.
  7. Income tax #2: Many people also misread the income tax question and simply re-report their income for the year, stating, for example, “I made $50,000 last year and paid $50,000 in taxes.” Though you may feel your taxes are too high, no one has a 100% tax rate, so make sure you draw a distinction between these two pieces of information. In fact, these last two mistakes can be easily avoided by utilizing the FAFSA’s IRS Data Retrieval Tool to import your income and tax information directly from the IRS’s database.
  8. Small errors lead to big problems: Be sure to proofread your FAFSA before submitting, and review the Student Aid Report summarizing your FAFSA data sent to you a few days later, to ensure the information transmitted to the colleges is accurate. Seemingly small mistakes, such as transposing digits in a Social Security Number or using a nickname instead of a legal name, can prevent the verification of the student’s identity and can cause major delays in receiving (or outright denials of) financial aid.
  9. Only completing FAFSA: While most colleges require just the FAFSA to apply for financial aid, there are a large number of schools that have additional requirements, such as submission of the CSS Profile, copies of tax returns, etc. Review each college’s website for its application requirements and heed requests for additional information.
  10. Not filing at all: Finally, the easiest way to miss out on aid that you might have been eligible for is to not apply for it. Check out this Insider blog post to learn why families who don’t expect to qualify for aid may still want to submit the FAFSA. And don’t let fear of the FAFSA keep you from applying. Take a little care to avoid the above mistakes, and FAFSA completion should be a straightforward and painless process.

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