FAFSA season begins on Sunday. New Year’s Day is always the first day that parents can file the Free Application for Federal Student Aid.
While it’s been simplified in recent years, the FAFSA still isn’t what I’d call a user friendly document and it’s easy to make mistakes. Paula Bishop, a CPA friend of mine in Bellevue, WA., who fills out a lot of FAFSA forms for clients, tells me that she’s never seen any parent complete a FAFSA application without at least one mistake. Yikes.
Here then are 10 FAFSA mistakes to avoid:
1. Don’t include retirement assets on the FAFSA. The FAFSA doesn’t care how much you’ve got in your IRA, 401(k) or other retirement accounts and doesn’t ask. The FAFSA does ask about cash, savings and checking accounts.
2. Don’t leave blank answers. If your intended answer is zero, write “0″ or not applicable. Leaving blanks can cause miscalculations and the application could be rejected.
3. Don’t enter the wrong income tax figure. Provide the federal income tax you paid or will pay based on your 2011 federal tax return — not the tax withholdings on you and a spouse’s W-2 forms.
4. List the most current marital status. You need to state what your marital status is on the day you sign the FAFSA, whether you are married, separated or divorced.
5. Don’t inflate your education. If both parents didn’t graduate from college, don’t list “college” as their highest education attainment even if they did attend some college. Plenty of schools treat applicants more favorably if they are considered “first-generation” college students.
6. Don’t forget to list the colleges. On the FAFSA form, you can include up to 10 colleges that your son or daughter has applied. The federal processors will send the pertinent FAFSA information to the schools on the list. You will need each college’s Federal School Code.
7. Don’t assume you won’t qualify for financial aid because your house is too valuable. The FAFSA doesn’t even ask if you own a house so the amount of home equity you have is irrelevant. The FAFSA does ask about second homes or real estate investments.
8. Don’t assume you won’t qualify for financial aid because you have too much saved in retirement. You could have millions stuffed into retirement accounts and it wouldn’t hurt your chances for financial aid.
9. Don’t type in a wrong Social Security or driver’s license number. Double and triple check these numbers.
10. Don’t assume that you can’t file the FAFSA without a completed 2011 income tax return. You can estimate your taxes in order to complete the FAFSA, but be sure to update the financial aid application after your tax return is complete.
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Thanks for the super info! I would add, don’t forget to get a FAFSA pin# for BOTH student and parent if you plan to submit the form online. I made that mistake once and there were some tense moments when my form was not accepted electronically.
Lynn: I love your blog. I too write about college costs, education and health. I’d like to share this video I made with your readers which might help them keep college costs under control. Here’s a link to my video:
http://youtu.be/Mqu_ITng-kc
Lynn:
Do you know if checking account balances associated with a parent’s S Corp need to be included in the FAFSA submission?
Hi Bill,
Sorry, but I don’t know the answer to that one. I would contact the toll-free number on the FAFSA website and ask. They should know. Good luck.
Lynn O’Shaughnessy
question: My husband and I are divorced and share who gets to claim our daughter every other year on our tax form. She lives with him the majority of the time, but I get to claim her for the 2012 tax year. Can I still fill out the fafsa with her father’s information if I claim her on my taxes, or does she need to be on his tax return for her to apply with his tax information?
Hi Stacy,
The FAFSA requires that the parent that takes care of the child for the majority of the year is the one who must complete the FAFSA. It has absolutely nothing to do with who claims a child on the tax form or who pays child support. Your ex-husband must complete the FAFSA since your daughter lived with him the majority of the year.
Lynn O’Shaughnessy
One fact some students and even some colleges don’t realize is that the federal government offers two options for preparing the required federal student aid application (FAFSA) – either do it yourself for free on the U.S. Department of Education’s Web site or get professional help from a fee-based service. (Similar to options for preparing income tax forms – only with up to 140 questions, the FAFSA is longer!) The largest fee-based FAFSA preparation service, Student Financial Aid Services (http://www.fafsa.com) provides FAFSA preparation services free to student from low-income families.
Accuracy Counts. Calculation mistakes can reduce an aid award even if an aid application isn’t rejected. For example, taxable income isn’t adjusted gross income. If parents have tapped into retirement funds, it should be added to either untaxed income or adjusted gross income, not both, or the Expected Family Contribution (EFC) will increase, and aid eligibility will decrease.
Not All Assets Count. Not only doesn’t a primary residence count as an asset for the FAFSA neither do retirement plans, small family-owned businesses, and the cash value of life insurance.
Dependency Surprises. Just because a student financially supports themselves, doesn’t mean they are independent under FAFSA rules. Many students are considered dependent until age 24 requiring parents’ income on their FAFSA. However, for children of divorced parents only the income of the parent with whom the child lived with the most during the past 12 months is counted.
Job Loss Relief. If a member of a household has had their job eliminated, a student may be eligible for more aid. Look for the ‘dislocated worker’ question and see if the family meets one of the four criteria. Dislocated workers’ assets are counted differently than others – typically helping reduce an EFC, which increases aid eligibility.
Job Loss Relief. If a member of a household has had their job eliminated, a student may be eligible for more aid. Look for the ‘dislocated worker’ question and see if the family meets one of the four criteria. Dislocated workers’ assets are counted differently than others – typically helping reduce an EFC, which increases aid eligibility.
Hi,
I just found out this evening, that my son (and his mother-my ex) intentionally filled out the FAFSA for 2011-2012, incorrectly reguarding income.
My ex and I divorced over 10 years ago, both having joint legal custody of our son, but she kept the tax exemption, and he spent about 60% of his time living with her. When he began applying for financial aide, in Dec. of last year, he called and got particulars about my personal info and income. Then after I filed my taxes in April, I took his mother a copy. It was my assumption that he was using her income, as well as mine, for his income information. Turns out, he was ONLY using mine, because I have children with my second wife, and it gives him a better aid package.
When he called tonight to get updated information, there were a few things that didn’t seem right in our conversation. I called him mom and asked her some questions, and again, her answers seemed off. So I got on the FAFSA website, and found out that he is being scandalous with his application. When I called him mother about it, she knew about it, but said I owed it to him.
Not only do I not want him lying about this to get more money, but I am concerned about my liability. I want my son to continue his education, but I can’t justify this. Any thoughts on what I should do now?
Thanks.
It is common for parents to claim the income of the parent that would offer the most financial benefits for the child. Yes, you are technically supposed to claim the parent that provided most of the support. Are you ready to contribute financially to your son’s education? I doubt it.
On another note. I don’t agree with how the FASFA calculates the parents income in general. A lot of “kids” live on their own and support themselves after 18 but the government doesn’t want to help those that do that until they are 24 years old! The require the parents put down their income and ASSUME these parents are going to contribute to their children’s education. That is obviously not always the case. Some do but a lot don’t. Unless the child marries or has a child of their own, they are considered a “dependant” until the age of 24. That doesn’t seem right. It also isn’t right to include a step-parent’s income. A step-parent isn’t legally responsible for step-children EXCEPT for the FASFA.
I saw that as a stepfather my income needs to be included becasue my stepson lives with us. What if my wife and I get divorced on paper so his dad will have to fill out FASFA? He makes probably 1/3 what I do and my wife doesn’t work. Will this work or this there a better way to avoid having to include my income?
Gary — What you are suggesting is highly unethical. I could never condone something like that.
Lynn O’Shaughnessy
I just graduated from high school and wish to go a nursing school. I realize that I need my parents income tax information. However, it has been 2 years since my last communication with my parents, and no one knows where they are. My grandparents asked if I could use there income tax info. because I live with them.
What should I fill in for my parents income tax info.?
My son will be a junior in high school, and I am beginning to get information about his college choice and financial aid. I will be on disability retirement from the Ohio State Teachers Retirement System. How will this play into getting financial aid for college?
Hi,
My daughter spends 90% of her time with me and I have claimed her on my taxes for the last several years. He contributes a small amount $100 per month for her living expenses. For FAFSA, is it necessary to submit her dad’s tax info or just my own? He has re-married and has two young children; his and his new wife’s income together are much higher than mine. Thank you.
The parent who takes care of the child the majority of the year is the one who completes the FAFSA. You would complete the FAFSA and your ex would not include info on the FAFSA. If your daughter applies to a school that also uses the CSS Financial Aid PROFILE, it’s likely that your ex spouse’s income will also be used.
Lynn O’Shaughnessy
I just filled out my FAFSA online but had a question. I am married but me and my husband file our taxes separately. When I was doing my taxes I imported my information straight from the IRS into the FAFSA application. I then entered my husband’s tax information in another section by itself.
I was awarded financial aid at by my school but someone told me I have to combine my husband’s income with mine in the tax section. I want to make sure I’ve completed the application correctly. I don’t want to have to pay anything back if done incorrectly.
My question: Do I have to combine his income with mine or leave it separate in the tax section?
Lisa,
I would call the FAFSA hotline with this question. The number is 800-4-FED-AID.
Lynn O’Shaughnessy
I am a mother of twins 20 years old. I have been a single mom for many years that never recieved a dime of child support. I have recently remarried and this will cut out all grant money my sons recieve which is only $5k per year each. I understand this is a lot but it doesn’t cover it all and I have to cover the remainder as it is. In the upcoming year I have to include my husbands income and I truly find it unfair that he will now have to pay for my 20 year olds college education when he is not there father. There father is in prison and has been on and off for the past 15 years. Is there any way around this? I am not trying to be unethical but my new husband has been around 4 years of there life and he shouldn’t be responsible for all of this.
Hello Lynn, I have a situation that I did not anticipate. I just drove my son back to school for his Junior year. We also have twin daughters entering their Senior year in High School. Our plan was always for both my wife and I to continue working until the girls are done with their 4 years of Undergrad studies, which is also when I will be 62. I would then retire and my wife may work an additional 2 years as she will be 60 when they graduate. My company, a large Fortune 500 firm, just announced that if long term employees(I have 30 years with them) do not retire by 12/31/13, they will no longer subsidize Retiree Health benefits, which they currently subsidize 80% of the cost of the premiums. This is significant. Now I have to weigh the pros and cons and consider possibly retiring before 12/31/13 at the age of 58 1/2 to preserve this cost saving benefit. I would no doubt find some work to make up the difference from my current income to my pension. I do not believe Fafsa looks at retirement income(pension) but just wanted to be sure. Will our 3 children then qualify for more financial aid? Currently we cover the cost for my son’s college, but we are concerned when having all 3 in college! Any advice you may have would be appreciated. Are their counselors who specialize in this type of situation?
My school wont give me Financial aid because when I filled out my fafsa I put that I was married. At the time I was but separated (not legally though) and filled separate tax returns. Now the school needs my wife’s taxes even though she will not be financially supporting anything I do for school. This would not be an issue if the IRS could get her a tax transcript but its been a while now and she and I have had no success in getting the IRS to get me the transcript.
She has gone through the IRS website to get the transcript but she no longer lives at the address she filed from. She has also filled out the proper paper work to get it sent to the right address but its been over a month since its been processed and still no luck.
Is there anything I can do as I am broke and am in dire need for grants and loans?
I am wondering if we have to claim my portion of beneficiary SSI payment benefits received, from my deceased ex-husband, on my son’s college applications (fall 2012) or the FAFSA (1/2013)?
My income/wages earned is under $25,000. I claim SSI benefits (from my deceased ex-spouse) as income on my taxes each year, but I do not have to pay any income tax.
I have been told I do not have to claim the SSI on the FAFSA since it is it was not earned income. They are benefits received (payments as if I were receiving child support).
I want to be as truthful as possible, but I want to know if I am obligated to report to colleges or FAFSA of my benefits received.
Thank you in advance.
Hi Elyse,
I don’t know the answer, but if you call the FAFSA hotline you should get your answer. Calling a college financial aid office should also get you an answer.
Here is the link to the FAFSA contact info: http://www.fafsa.ed.gov/contact.htm
Good luck!
Lynn O’Shaughnessy
Ok thank you for your help
Hi,
As I was completing FAFSA my mom informed me that she married her bf half a year ago. Now I have to also add his income tax. They filed seperately and now I don’t know what type of income tax form to put down that they used if its seperate and different? Which type do I put? His or hers?
I am a 49 year old single mother of two. My daughter, age 20 is in college and we filled out her FASFA form last semester. She was not eligible for grants due to my income. I am going to be also going back to school beginning in January to get my Bachelor’s Degree in Nursing. Since I am a single mother and she and I will both be in school, will that change and give us the possiblity, either myself or her to get grants. I did receive grants when I was in school for my AS degree in Nursing. Will we qualify for grants now that we will both be in school?
Help!!! My brilliant daughter is being denied fafsa over what boils down to a typo.She has a 3.9 gpa. and really deserves this. She wants to be a teacher for specail needs children. She checked married when in fact we are seperated. My 2011 tax filing status was head of household. The school says I need to ammend this, but in order to do so I would face heavy fines from the IRS. Shes just finished her first semester and the school wont let her sign up for spring classes. . I dont know what to do.
According to FAFSA, my parents can pay for my education no problem. The problem is, they really can’t. They have said they are happy to help me in any way they can that doesn’t involve them paying for my schooling. Due to a pay cut my dad took when he got a promotion (yes, it’s a flawed system), their income is marginally less than it was when we filled out the FAFSA. Apparently the only way to have that taken into consideration is to file a petition, which isn’t always accepted. They are not willing to take out loans because they want me to be responsible and learn money management. I have no objections to learning. In fact, I think learning money skills is very important. I’ve been living on my own for a year and I have started to pay attention to Dave Ramsey like you would not believe. I think the worst part about the system is that my dad (who is technically my step-dad) is suddenly being held very accountable for me. The government would not consider him my father or give any rights to him as such while I was growing up, but they are plenty willing to foot him with the bill. We tried several times to have him adopt me, but things kept happening that made it impossible. My little brother is watching as we all struggle to figure out how I am supposed to pay for school and go to school. It does not seem possible with the government against me…
I don’t work, and my husband broke his back a few years back and is disabled and draws disability thru social security… It’s been hard for me to work or go back to school because I have to help him so much at home. I’ve been thinking about taking some classes online maybe… I really just don’t know where to start since I graduated high school in 2000! To say I’m nervous would be a major understatement!! Haha when applying for financial aid or any college applications, when it asks about my income, what should I put? Since his disability is our family’s only income…. Do I list it on the applications??? Any advice would be greatly appreciated!!! Thanks!!!
Ok, so I have filled out the FAFSA for our oldest (a senior) using 2011 tax numbers (shouldn’t be too much different) and saved it; do I submit it with those numbers and change them later or just leave it saved and then fix the numbers BEFORE sending it in? Confused first-time soon-to-be-college-mom!
I am trying to complete my FAFSA for 2013-2014 and its asking for my wages earned, I only worked about a week in 2012 so should I still list that under my wages?
My parents are divorced but they have 50-50 custody of me. I am 18 and applying for FAFSA for my second time, as this will be my second year of college. For 2012-2013 I said I was my Father and Stepmother dependent.
My father and stepmother are currently separated but my dad has “custody” of my four other siblings. My mother is on disability and has one kid.
Which parent would I put on FAFSA to get the most amount of aid: A single father of 5 making about $45k , or married mother who’s household income is about $13k?
I’m an American living in the US with relatives, but my parents are Canadians, and I’m confused as to how to fill in their info on my FAFSA.
Lynn, any way u can help me out with the part about spouse income and my income? we r married, so do I add ours together or not? Also would they count any lottery winnings (small Amount of course 10k on a 2011 income tax) Please email me. Austinbarnes83@yahoo.com
I’m an American living in the US with relatives, but my parents are Canadians, and I’m confused as to how to fill in their info on my FAFSA.
My son will be transferring to a different college in the fall but as of yet he doesn’t know which college it will be. Do I have to wait until he knows before I fill out his fafsa or can I do it now? I didn’t notice “undecided” as a college choice?? Anyone know?
Hi Jeanine,
You should not wait until you know what school your son wants to attend. Fill it out now. You can go back in later and designate what schools you want the application to be sent to.
Lynn O’Shaughnessy
I have been separated for two years and am in the middle of divorce proceedings. This is the first year that I will be filing Married Filing Separately. My two college age children live with me and are both in school full time (freshman and sophomore now).
My husband voluntarily pays me support each month (the guilt payment for walking out on us). He will not be declaring these gift payments on his tax forms and I will not be declaring them as income. The IRS says I don’t have to so I am confident about that.
I am wondering if I need to account for them somehow on the FAFSA which I am filing based solely on my income (since they live with me 100% of the time). I certainly do use the money he gives me to pay for their college. I qualify as a displaced homemaker. If I do not include his monthly voluntary payment to me, I only have $3,100 in income in 2012. They received no financial aid last year or the year before since we filed jointly at that time and my husband’s income was over $150k.
How do I account for their out-of state pre-paid tuition plan that pays about 12% of their total bill each year? Is that considered college savings?
Should I somehow account for the $20k inheritance I received upon my grandmother’s passing in 2012?
Not fasfa related, but check and see if you qualify for head of household. So you get the earned income for your children…will get nothing as married filing separately.
Lynn,
Recently divorced and have twin boys who are heading to college in the fall. My ex and I share all custody and finances 50/50 because at the time of our legal separation our incomes were only about 10K apart and I wasn’t eligible to receive any monies since its a wash according to any formulas. As we file the FAFSA, who should file? I do not know if he makes more than me (he was awaded some new accounts and territory) or if my income (I am on commission and due to short staffing and I was carrying workload of 3 for about 4 months.) My guess is he and I are both right around $75K…I have no way to reduce taxable income–he has the medical plan, 401k, HSA, dependent care for our 6 YO daughter so his taxable income is most likely less than mine. . Is there a way to determine between us without full disclosure to each other–obviously a senstive issue.
I am trying to fill out FAFSA and I am wondering about the student financial part. My mom files my taxes with hers because I am still dependent on her. How am i supposed to find out my adjusted gross income if she files my taxes with hers?
My dad has an associate’s degree and my mom never went to college, but the thing is, this all happened back in Vietnam. Since they have no degree here in the United States, what should I select? Other/unknown?
I am a mother of three with a 20 year old daughter in college. I have been a single mom for a few years and did not receive child support during that time. I have recently remarried and this will probably cause her FASA to be non-existent. For the year 2013-2014 I have to include my husbands income and I truly find it unfair that he will now have to pay for my 20 year olds college education when he is not there father. There father has never been around I am not trying to be unethical but my current husband has been around 4 years of there life and he shouldn’t be responsible for all of this. I have always taken care of my children on my own. Since he does not financially take care of them, do I have to add him to the FAFSA? My daughter attends school out of state with a full schedule and depends on her scholarship and FASA. Thanks for your help
Hi Laurie,
You will have to include your husband’s income on the FAFSA. That is the rule.
While you might not consider it fair, but is it fair that an unmarried parent, who is divorced, can file the FAFSA without the child’s other natural parent. Divorced parents do get a break in the FAFSA formula that married couples do not enjoy. The advantage disappears, however, when a divorced parent remarries.
If you didn’t have to include your husband’s salary on the FAFSA, taxpayers would be more likely to have to pick up the tab for your child and that’s not fair to them.
Lynn O’Shaughnessy
I never said it wasn’t fair, it was a question. I would have filed with the natural parent if he had not been registered with the State of Texas and I had access to his taxes. They have not seen him since they were toddlers, and believe me when I needed the government I was turned down with 20.00 til the next payday. I am a tax payer as well and my taxes have helped many that didn’t deserve it, but I still went to work and supported them and my three children. i wasn’t asking for a handout for her just some help, she has worked very hard to get to where she is at. I was just curious what a 20 year old does when they are on their own, but can’t file as independent. And though I know you are only here to answer questions to the best of your ability, have you ever wondered why between 18-21 you can vote, buy tobacco, buy alcohol and serve our military but you can not file as an independent to help you through school until you are 24 years of age. Anyway thanks for answering the question.
Hi Laurie,
In the past it was easier to be considered an independent, but the government changed the rules. Otherwise millions of parents would want to declare their children independent. The federal and state governments would go broke if all children qualified for extra financial aid because they were independent.
Good luck!
Lynn O’Shaughnessy
Lynn
For the last 15yrs our accountant had us file separately head of household ..with my husband using a different address (mailbox place..bur address looks like apt number). this was done bc my husband owed 40k to IRS from before we were married. We have 3 kids..I deduct the 2 older and he deducts the third.
I have never been comfortable with this but it enabled us to get a financially needed refund each year. I make 50k and house in my name only.I never legally changed my maiden name.
My husband makes $120k. I know his makes us look financially comfortable but we struggle every montage
We have a hs junior so know our 2012 taxes will be used for fafsa form
I do not want this to affect us getting aids or loans
If we have accountant change our filing..what should we do?
I am so confused and don’t want this to haunt ne din the line
Thanks…Karen
I
Hello, I just give birth to my daughter in december 2012 and I am trying to figure out if I need to file her on my income taxes or let my fiancee. I was wondering if I need to file her on my taxes to get single mother grants.
So my dad and my stepmom are separated and getting divorced. I am filling out my fafsa and don’t know what to do. They are doing taxes together again this year. So if I enter my father’s information without hers but they do taxes together, how will that work out?
My husband and I own a small business that I run. When filling out the FAFSA form, do I put my income (where it asks for mothers income) as what I made before or AFTER deductions since we show a loss. Or will this be figured (or assumed) as a loss after they see our Adjusted Gross Income. Just not sure if I plug in the Gross Income or Net Profit… thanks!!! Hope that makes sense
Great…
Many thanks for your ideas on the write-up Avoiding 10 Common FAFSA Mistakes | The College Solution.
They are generally very practical. I enjoyed reading your
posting..
Take a look at my website: QROPS
Can anyone help me in figuring out how I can fix this issue? I sold a business property this past year and I actually lost money on it. Now, my tax accountant hit me with a huge tax bill that I need to pay due to property depreciation value over the last 6 years I owned it. The bigger problem is that it wrongfully inflated my income in 2012 from 44K what I really made in 2012 on my W2 and other incomes to 180K (due to this depreciation schedule) which ended up with the family contribution of 100% of the tuition and even more. No way on planet earth I can afford any of that because I can hardly afford keeping the roof on top of our heads and food on our table. What can I do? Anyone came across this issue before and can shed some light or suggest how this can be fixed so my family contribution reflects what I really make and not an inflated number for tax purposes? Please let me know if possible by emailing eyemtv@yahoo.com. Thanks so much!
Hi Adam,
You can ask schools for a professional judgement when your circumstances are different from the EFC. If you want to hire someone who might be able to provide advice, I’d suggest Paula Bishop, a CPA in Bellevue, WA, who helps people with complicated financial aid issues. Just Google her name.
Good luck.
Best,
Lynn O’Shaughnessy
Thanks so much!!! This is a great start.
Paula add one more:
If you know you have made an error in your FAFSA application, go back to ‘Make Corrections’, make the necessary corrections, and resubmit. The correction will appear in your application. Making an error is not a problem. To error is human and pardon divine’.
I too help many clients mostly my students in filing the FAFSA applications. I do it for free.
I started my 2013-2014 FAFSA application 2 months ago, but I am still waiting for my parent’s 2012 tax return to be accepted. Can I still submit my FAFSA application by providing the information they have on paper?
Thank you.
Laura,
You can always file the FAFSA with estimated tax figures. It’s best to do that rather than wait because by waiting you can miss out on aid from your state.
Lynn O’Shaughnessy
Hi, my parents are married but filed seprately and I claimed my mother as single. Now that there filling together I claimed her married. Their asking for when she got married but she has been married all along. Should I put actual date of marriage?
Pris – You can’t claim that your mother is single when she isn’t. You need to acknowledge that you provided false information on the FAFSA and do so immediately.
Lynn O’Shaughnessy