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FAFSA mistakes that can cost you the game

Even with its many enhancements, the FAFSA can be a challenging form for some families to complete. Mistakes can be costly and possibly result in lost financial aid.

Mistakes can be costly and possibly result in lost financial aid.
Nancy Griesemer

Knowing this, the feds have thoughtfully provided a series of YouTube videos as well as lots of detailed explanations in FAFSA FAQ’s and throughout the Federal Student Aid Website.

For the record, federal student financial assistance programs represent the nation’s largest single source of financial aid for postsecondary students.

And families are finally getting the message. According to Sallie Mae, FAFSA completion jumped from only 72 percent in 2010 to 82 percent in 2013, with middle-income families making up a substantial portion of the increase.

So what’s the best way to maximize your potential for federal aid?

Complete the FAFSA early and online.

To combat a number of frequently-made mistakes, online applicants are now given the option of retrieving IRS data to automatically populate the FAFSA.

This option simplifies the application process, helps reduce errors, and may lower chances of being selected for verification. It’s great if you’ve already filed your taxes, but not so good if you haven’t and shouldn’t be used as a delaying tactic.

To help get you started, here a few costly FAFSA filing mistakes you can easily avoid:

  • Waiting to complete your taxes. Although it’s preferable to have completed tax returns available before starting, sometimes that’s just not possible especially if your employer is one of many who routinely ignore W-2 deadlines. Waiting for your employer’s bookkeeper can cause you to miss priority state and college filing deadlines, and these delays could cause you to lose aid. So go ahead and provide estimated information and plan to update once your taxes are done. (HINT: Use your last pay stub from 2013 to provide an income estimate).
  • Having the wrong parent complete the form. When parents are divorced or separated, you need to make sure the right one completes the form. The parent responsible for filling out the FAFSA will be the one with whom the student has lived for most of the year (more than 50 percent).
  • Leaving a blank field. The most frequent mistake made by applicants is leaving a field blank. If the answer is zero or the question does not apply to you, write in a “0.” If you leave a question blank, the processor assumes you forgot to answer, and too many blanks may cause miscalculation or an application rejection.
  • Entering the wrong legal name. Make sure that when you register for a PIN number, the name you provide matches what it says on your social security card. If you’re JoAnne for the Social Security Administration, don’t suddenly become Joann for FAFSA. The same goes for Bubba or Billy Bob. And don’t forget the hyphen or drop one of your last names just because your parents are no longer together. The FAFSA verifies this information with the Social Security Administration and if names do not match, there will be delays in processing.
  • Providing an incorrect Social Security number or Date of Birth. Check and double check every number you enter in these fields. Errors can be as simple as reversing digits or entering a parent’s SSN in place of the student’s. This REALLY slows down the process. No aid will be awarded until all numbers are correct and match what the feds already have in the system.
  • Failing to count yourself. The student for whom the FAFSA is being completed must be counted as a member of the household attending college during the award year. Also keep in mind that the form is all about the student, and the words “you” and “your” always refer to the student—not the parents.
  • Leaving the question about drug-related offenses blank. If you’re unsure or embarrassed, contact the Information Center instead of leaving this field blank. A conviction doesn’t necessarily disqualify you from getting aid, but you will need to complete an eligibility worksheet.
  • Entering the wrong tax amount paid. Use the 1040 federal tax return for reporting taxes paid. Do NOT use your W-2 form for this purpose. This is where the new IRS data retrieval tool may help you avoid errors.
  • Confusing Adjusted Gross Income with Gross Income. The FAFSA specifies the line on the 1040 that lists your AGI. If you use the gross income figure, you are over-reporting your income and could lose aid eligibility because of a high income. Again, the new partnership with the IRS should help, provided you file your return before you start completing the FAFSA.
  • Neglecting to register with the Selective Service. If you are a male, aged 18-26, you must register with the Selective Service. Failure to register will make you ineligible federal student aid.
  • Failing to sign the FAFSA form. This sounds like a “duh” moment, but you’d be surprised how many manage to screw this up. If you’re one of less than 2 percent filling out the paper FAFSA, be sure to sign it. If you’re filing electronically, use your PIN.
  • Forgetting to update tax information. If you submit the FAFSA before filing your taxes, you will have to estimate income and tax information. Once your taxes are complete (by April 15th), you must amend your Student Aid Report (SAR) by going to the corrections page on the FAFSA website. Do this as soon as possible, as over- and underestimating taxes can affect the amount of aid you receive, and colleges will not finalize your aid package until you’ve provided 2013 tax information.
  • Missing filing dates. Financial aid is given out on a first come first serve basis. Those who submit the FAFSA early and correctly are placed in the front of the line for aid. In the way of a reminder, the FAFSA website provides a list of known state filing deadlines. But since priority filing dates vary significantly by college, you’ll need to check with individual financial aid offices to get specific deadlines.
  • Filing the wrong FAFSA. Depending on the time of year you are completing the FAFSA, there may be two different FAFSA’s available. For example, families could currently file the 2013-14 FAFSA or the 2014-15 FAFSA. If you are seeking aid for the 2014-15 award year (July 1, 2014 through June 30, 2015), you must submit a 2014-15 FAFSA. If you are planning to take summer classes, ask your college’s financial aid office which FAFSA you should complete.
  • Listing only your top school on the FAFSA form. List all the schools to which you have applied. Gaming this question can lead to problems later. Yes, you’re showing your hand but sometimes that can work to your advantage particularly if you are applying to a list of schools that typically competes for the same students. You don’t want to miss a priority filing deadline because of a desire to maintain privacy about your college list. Note that the order in which you list these schools sends a message. You can either send a signal to your top college by listing it first, or you can choose to walk the middle ground by alphabetizing your list of schools.
  • Neglecting to coordinate related financial aid forms. These forms include CSS PROFILE, Institutional, or Verification forms. They ask for much of the same information as the FAFSA, but are filed separately. The key is to be consistent on all the forms. Colleges will compare answers and any discrepancies could result in lost aid.
  • Not filing the FAFSA because you think you don’t qualify. Way too many families make this mistake. Why? Sometimes families don’t realize that retirement and home equity are excluded. Or they think they simply make too much money. A little known fact is some colleges make scholarships available contingent on filing the FAFSA. And finally, stuff happens. Life can take unexpected turns, and you’re much better off having a FAFSA form on file in case an unexpected emergency changes your financial situation.
  • Deliberately providing misinformation. It’s never a good idea to lie to the federal government. The consequences can be severe.

You can learn more about federal student aid by downloading Funding Your Education. If you have specific questions, check the FAQ section on the FAFSA website or contact the Federal Student Aid Information Center. Remember that delays and errors can be costly!

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