By Roberta L Nestor
The Free Application for Financial Student Aid (aka FAFSA) has new filing dates that went into effect a year ago, however the importance of these new dates has not been widely publicized. Prior to the 2016 – 2017 school year, you had to wait until after January 1st to apply for federal aid. Under new regulations, you can submit your FAFSA application as early as October 1st, 2017 for the 2018-2019 school year. In other words, if you have a child in their senior year at High School – now is the time to start the process.
For the Parent: It all starts with the online process to obtain your Federal Student Aid (FSA) ID and password. While this should be the easy part, it is perhaps the most difficult since it requires the student to establish this account in addition to the parent obtaining their own FSA ID. The FSA ID will serve as a legal signature that is not to be shared with anyone, including family. Only one email address and only one mobile phone number can be associated with any one FSA ID. Also note that your FSA ID will expire every 18 months and it is your responsibility to update it. The username however does remain the same.
Completing the FAFSA takes time – often up to 30 minutes just to obtain the special ID number. You will also have to gather all of your family’s financial documents. If your student is a senior in high school, applying for aid and plans on attending college anytime between July 1, 2018 and June 30, 2019 you will be using information from your family’s 2016 tax returns. You will have the opportunity to update once you file your 2017 tax return.
For the Student: Don’t wait and don’t procrastinate. While it is not a clear cut “first come – first serve”, states, such as CT have deadlines for residents. The deadline for CT is February 15, 2018. Note that filing by December will give you a much better chance of receiving larger and more scholarships from state agencies, foundations and schools. Aside from the federal deadline and state, the schools you are applying to will also have their own deadlines. Even if you don’t think you will receive any aid, you still have to apply. Don’t assume just because your parents may have high incomes that you will not receive aid. Keep in mind that there are several factors that are used to calculate the Expected Family Contribution (EFC) such as income, assets, 529 withdrawals, age of parents and siblings, the total number of family members and how many are attending college. Many schools won’t even consider you for any of their scholarships (including academic scholarships) until you have submitted your FAFSA. This application process is also necessary for student loans and grants.
Google “FAFSA on the web worksheet” to find a printable worksheet to use before you actually go on-line to complete the application – it will help you to identify what information you will need to have access to. This is where your parents can help by filing out the worksheet. There are too many great websites to list but these are the primary ones you should be using: www.studentaid.ed.gov; www.fafsa.gov; www.scholarships.com; www.savingforcollege.com and www.finaid.org.
And for parents of prospective college students – don’t hit the panic button and start moving money around. Use one of the calculators on the websites listed above and it will give you an idea of what your EFC will be. Then, you should meet with your financial advisor to understand how withdrawals from 529 plans, savings accounts, 401k loans, home equity loans, etc., may impact financial aid eligibility. Nestor Financial will be holding a seminar “Paying for College Essentials” in September. If you are interested in attending, let us know.
Roberta L. Nestor is a financial advisor practicing at 491 New Haven Avenue in Milford, CT offering retirement, long term care, investment and tax planning services. She also offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network – a member FINRA/SIPC and a Registered Investment Adviser. Fixed insurance products offered through Nestor Financial Network are separate and unrelated to Commonwealth. Commonwealth Financial Network or Nestor Financial Network does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation. Roberta can be reached at Nestor Financial Network, 203-876-8066 or firstname.lastname@example.org.