Don’t Skip FAFSA! User-Friendly Updates Make This College Aid Form a Bit Easier to Complete
By Ann D. Blakey, CFP® at Washington Wealth Advisors
This is the time of year that most parents and guardians with college-aged students struggle with the infamous FAFSA form (Free Application for Federal Student Aid) and the CSS profile (College Scholarship Service).
Efforts to streamline the process have been made for this year, as it has long had a reputation of being overly complicated to fill out. FAFSA is an important form as it helps students qualify for federal student aid, including work-study programs, grants, and even federal student loans. We advise our clients not to overlook filling it out.
Here are a few Do’s and Don’ts to consider as you approach your college financial aid forms.
DO Complete the FAFSA every year
Whether or not you think your family will qualify for financial aid, complete the FAFSA every year. You may be pleasantly surprised. Moreover, the FAFSA is your gateway to Federal student loans and can assist your student in qualifying for merit aid. The Form can be found at StudentAid.gov.
DO Create your FSA ID for yourself and your student
FSA ID is your unique ID used as your legal digital signature. Keep it secure for your use to access the mobile app, sign loan contract and access certain financial information online. You use the same FSA ID each year, so don’t share it with anyone.
DO Complete the CSS profile IF your student’s college asks for it
Only a subset of private colleges uses the CSS, but don’t skip if it your student’s college is one of them.
DO Use the IRS Data Retrieval Tool to link your 2021 taxes to the FAFSA form
Securely linking your 2021 taxes to the FAFSA form will save you a lot of time rather than entering data manually.
DO Include the value of your 529 plans as Parent Investment asset
Include the value of your 529 plans as a Parent Asset and NOT as a Student Asset. The form does not specifically ask for 529 plan value, but they are required.
DON’T Assume the FAFSA and the CSS will ask for the exact same information
Review what each form requires. For example, the FAFSA does not include the value of your home, while the CSS does.
DON’T Include Life Insurance or Retirement Plan Accounts
Don’t include the value of any life insurance or retirement plans/accounts you may own on the FAFSA – this includes all 401k accounts, IRAs, pensions, and qualified annuities.
The FAFSA form does NOT make this clear, and this is very important to get correct so that you do not over-state your assets.
Again, the CSS profile treats retirement assets differently, so be sure to follow their separate directions.
DON’T Miss Your Deadline!
While the official Federal FAFSA deadline is June 30, 2023, many states and colleges have earlier deadlines.
Deadlines for the CSS are even more variable, so be sure to check out each college’s own dates and file well in advance.
If you need to review - or develop - the educational savings approach to your college savings planning, we are here to help. Call our office today at 703.584.2700, email email@example.com or Book Time with us Online.
We wish your students and all in your family the very best in their educational pursuits. Knowledge is empowering!
IMPORTANT WASHINGTON WEALTH ADVISORS DISCLOSURE INFORMATION
ABOUT WASHINGTON WEALTH ADVISORS
Washington Wealth Advisors is a fee-only registered investment advisory firm serving busy families, executives, women building wealth, and small business owners. We provide Wealth Advisory Services—financial planning coupled with asset management—guided by a personalized investment strategy based on each client’s unique goals. Our fiduciary approach, independent advice, and proactive investment management help to support our clients’ overall financial peace of mind.