If you have a son or daughter who is a senior in high school, or was at some point, you likely completed the FAFSA form.  Free Application for Federal Student Aid, FAFSA for short, is now available to complete online.  This helps determine various forms of financial aid offered by colleges before your student arrives on campus next fall.  I completed the application for the first time for my high school senior, here’s what I learned.

  • Registration: Before you may complete the FAFSA form you must create two IDs, one for yourself and one your student.  This is the student’s form, but likely will be completed by mom or dad.  Follow this link to get started.  Once this data is submitted, you will wait 3 days or so for the Social Security Administration to confirm your information via email.  Once confirmed, you may begin to complete the application.

 

  • Pro tip: You’ll want your student’s social security number handy when completing this.  You’ll use your personal email address and your student’s personal email address.  You will not want to use an email address provided by your student’s public school as it won’t be available to them after high school graduation.  FAFSA forms must be updated each year your student is in college, so a good email is essential.

 

  • Completing the application: The window opened Friday October 1st.  I had created IDs in advance but due to the volume of online traffic it was difficult to make progress.  I was able to log in over the weekend and complete the process.  Total time to get through all the questions was about 40 minutes or so.  (Disclosure: I’m a financial nerd).  Your level of financial organization will likely influence the time it takes to complete the form.  You’ll be prompted to set up a password as you begin that may take you to where you left off should you be unable to complete it in one sitting.  If strapped for time or if the system boots you out, you may log in later to complete.  Like many tasks, sometimes breaking it down into manageable bites helps to avoid getting overwhelmed.  Do what works best for you and be aware that each state and college does have deadlines for this form to be completed.

 

  • Pro tip: Make sure you have your student’s driver’s license number handy, a copy of your 2020 tax return, current bank account, investment, and 529 values.

As you are completing the form, it will automatically link with your 2020 tax return via the IRS website.  The data you manually input (income & assets) is not that overwhelming if you have a recent balance sheet to reference.  If you’d like to view all the questions on the FAFSA form before starting, this link lists the 2019-2020 questions in PDF form.  I found this to be very similar to the questions I answered on the most recent form for a fall 2022 start date.  Make sure you check the FAFSA site to determine what financial values you should add/disclose and what values you should not when completing the application.  Here’s a link to the FAFSA help page that may answer additional questions.

  • Listing Colleges: You’ll be asked to list colleges that your student will be applying to on the FAFSA form.  The idea here is that the FAFSA form will be shared with the college to determine how much you’ll be responsible in paying once your student is accepted.  Only after your student has been accepted by the university will you then determine the costs of his or her attendance.  This process is completely backwards, much like agreeing to buy a new car first before working out the total price.  Whatever!  If you are curious on how your federal student aid is determined, read more here.

 

  • Pro tip: You should plan to update your FAFSA form each year.  Changes to your income, assets, and total number of children attending college may impact the aid provided for your student to complete their college education.

I was, and perhaps still remain, a bit skeptical on this whole process.  There’s a lot of opinions out there, is it worth the time to complete this form for financial aid purposes?  VA/MD/DC like many metropolitan areas around the country is rather affluent.  May we actually receive some form of aid or reduced costs?  Who knows, stay tuned…

Over the past ten months, we’ve completed a number of public and private college visits on campus.  It was made very clear in all presentations, specifically at the private colleges, that it’s critical to complete the FAFSA form for any amount of financial aid.  This aid may come in different forms and may not require student loans.  Some schools offer merit-based aid, effectively reducing the “sticker price” on tuition costs.  They won’t do this unless a FAFSA form is on file.

  • Pro tip: I highly recommend reading The Price You Pay for College, An Entirely New Road Map for the Biggest Financial Decision Your Family Will Ever Make, by Ron Lieber. I found this book beyond insightful and dedicated a blog entry to it here.

Our family’s approach to paying for three college educations will be a combination of 529 assets, income, and our boy’s kicking in some earned income from their jobs (bigger buy in with skin in the game).  We’d like to avoid parent and student loans if possible as debt is restrictive in so many ways.  That’s our plan, it’s a personal choice, as there are so many ways to cover the total costs of college.

The key takeaway as my senior begins to send college applications out is, a plan, any plan is necessary.  It doesn’t need to be perfect nor complex.  Understanding how college fits into our financial house via our plan and a corresponding timeline is priceless.  Of course, our plan may change, that’s life.  Having a framework and understanding on this topic and its relationship to other essential and discretionary spending goals our family has is vital.

If you have questions or would like to create an education plan that works for your family, reach out as we’d be happy to chat with you.

If you are uncertain or have questions we’d be happy to chat with you Chat – with Ryanor Contact Ryan.

Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Flowerstone Financial are not affiliated.

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