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  • Writer's pictureCarole Meitler

College Financing: It all starts with the FAFSA

Those of you with college students know firsthand the challenge of navigating the often-confusing system for applying for and obtaining any form of financial aid, scholarships, loans and work study to help finance the high cost of higher education. The very first step in this process for virtually all colleges and universities is filling out the FAFSA (Free Application for Federal Student Aid). As a reminder the FAFSA application for 2021-2022 opened on October 1, 2020. For those of you with college students or soon-to-be college students, the following is an overview of the FAFSA and some important tips as you prepare your application.

What is the FAFSA and how does it work?

By filling out the FAFSA form, you are providing the Federal government with the information it needs (i.e., parents’ and student’s income and assets, family information, etc.) in order to calculate your expected family contribution (EFC). The EFC represents the government’s calculation of how much of the college cost the family should be able to pay. However, this may or may not agree with what you think you can afford to pay! Your EFC is used by the federal government to calculate how much government aid and/or federal student loans you will be offered. However, it is most significant to realize that the vast majority of schools also use this number to determine how much institutional aid (financial aid offered directly from the school) they will offer you as well. The information you supply on the FAFSA, and the resulting EFC calculation, determines whether you qualify for both need-based aid and non-need-based aid, or some combination of the two.

The FAFSA collects financial information for both student’s and parents’ assets and income. Certain assets are excluded such as retirement assets like 401k plans and IRAs, annuities, and life insurance policies, as well as equity in a personal residence. The FAFSA assumes that 20% of a student’s assets and 5.64% of the parents’ assets will be available for spending during any one college year.

Every October 1, the FAFSA applications open for the following Fall semester. For example, the FAFSA applications that just opened are for Fall 2021.

How do I submit my FAFSA application?

While I do know some who have been sold on the idea of hiring someone to fill out the form on their behalf, it really isn’t necessary. The application form is found at where you will create an account and fill out the form online and the system guides you through the process step-by-step. You first will need to create an FSA ID with a username and password which will allow you to confirm your identity when accessing your FAFSA info and signing documents.

Before you begin, it is helpful to first gather the relevant information for students and parents, such as 2019 tax returns and W-2 forms, bank statements, Social Security numbers, and driver’s license numbers. FAFSA has a helpful, but completely optional, worksheet you may use to help gather information at

Make sure to keep all your documentation used to prepare the FAFSA handy because the Department of Education or your school may randomly select your application for verification later.

When should I submit my FAFSA?

FAFSA applications opened October 1. We highly recommend filing as early as possible. By filing early, you will have a better chance at more federal and/or school financial aid. Many colleges offer their institutional aid on a first come, first served basis so filing early give you a greater likelihood of getting a bigger piece of whatever the college may offer in aid. Furthermore, many colleges offer early filing scholarships. Two of my daughters, for example, received $1,000 annually from their universities above and beyond their other school aid just for filing early. You have most likely heard the wise old English proverb, “The early bird catches the worm.” When it comes to filing your FAFSA, it is indeed wise to follow that advise and file as soon as possible.

If our family income is high, should I still fill out the FAFSA?

Many dismiss the idea of applying for financial aid thinking that their incomes are too high to qualify. According to Mark Kantrowitz, publisher of, “millions of students who would have qualified for college grants still fail to file.” Ashley Boucher, a spokeswoman for Sallie Mae, pointed out, “Nearly every student is eligible for some form of financial assistance, whether it be grants, work-study funds, federal student loans, or a combination.” Furthermore, it is important to understand that almost all schools use the FAFSA to determine how much institutional aid they will offer a student. Surprisingly, many relatively high-income families get some institutional aid. To quote Wayne Gretsky, “You miss 100% of the shots you don’t take.” Do not make the mistake of not at least trying to see what aid you may get by filling out the FAFSA.

Need Help?

If you have any questions on the FAFSA process or obtaining financial aid for college, please do not hesitate to ask us. We are happy to help in any way we can.


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