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FAFSA Updates and College Financial Aid Information

Suzanne Shaffer


With the cost of college rising each year, many families look to financial aid to help pay for their student’s education.

In order to qualify for financial aid, students must file the Free Application for Federal Student Aid, or FAFSA. If your student does not complete the FAFSA, they will not be eligible for any federal, state or institutional aid.

Filling out the form isn't as complicated as you may have heard, especially with the ability to apply using their new mobile application. It's well worth it to find out if your student is eligible to receive grants (money that does not need to be paid back), work study and federal student loans.

Changes to the 2020–21 FAFSA

Tips for filling out the 2019-20 FAFSA from CollegiateParent

The new mobile FAFSA app.

Each year, in an effort to improve and simplify the FAFSA, updates and changes are made. This year is no exception.

Here is what you need to know about the changes on the 2020–21 FAFSA:

  • Fafsa.gov has been synchronized with the myFAFSA component of the myStudentAid mobile app. This helps promote an integrated user experience and allows applicants and parents to transition easily from one source to the other.
  • Students and parents may start, complete and submit a new or renewal FAFSA form for both the 2020–21 and 2019–20 FAFSA processing cycles on the mobile app.
  • Due to the elimination of IRS Forms 1040A and 1040EZ, Schedule 1 questions were added to determine a student’s eligibility for the Automatic Zero or an Expected Family Contribution and the Simplified Needs Test. Based on the answers to these questions, applicants might be able to skip questions about income and assets. For more information on this topic, read this article from Saving for College: Federal Income Tax Form Simplification Complicates FAFSA Form.
  • Students who are residents of certain states and attending certain schools will be asked all asset questions regardless of their eligibility for the Simplified Needs Test formula or the Automatic-Zero EFC. Check with your individual state and school to determine whether you can skip the optional questions.
  • Students can now access and view their Student Aid Report (SAR) on the myStudent mobile app.

7 Things You Need on Hand to Fill out the FAFSA:

  1. An FSA ID
  2. Social security number
  3. Driver's license number (if you have a driver's license)
  4. 2018 tax records
  5. Records of untaxed income (such as interest income or child support received)
  6. Records of your assets (bank account balance, value of stocks, value of real estate other than your primary home, etc.)
  7. List of schools your student is applying to or currently attends that will receive the information from your FAFSA.

Learn more about each item on this list here.

The Student Aid Report — Key Information Collected from the FAFSA

After completing the FAFSA, you will receive a Student Aid Report (SAR), either electronically or through the mail. If you have an FSA ID and your FAFSA has been processed, you can view your SAR at fafsa.gov or using the myStudentAid mobile app.

The SAR provides a summary of the information entered on the FAFSA and you should review it to make sure everything is correct. Colleges will use this data. The SAR also includes information about the amount of federal financial aid you might receive.

After receiving your Student Aid Report, follow these next steps:
  • Make corrections if necessary, either on the form itself or online at fafsa.gov. These might be incorrect data entry of basic information or if you want to add or delete a school.
  • Locate the Expected Family Contribution (EFC). If your application is incomplete, your SAR will not include an EFC but will tell you what you need to do to resolve the issue. This figure is an estimate of what your family will be expected to pay and will help you plan financially.
  • Make note of your Data Release Number (DRN). Colleges will need this number if you choose to allow them to change certain information on your FAFSA form.
  • Watch for verification requests on your report. Verification usually means that additional documentation is required and is based on either a federal formula or can come directly from one of your colleges. If selected, respond as quickly as possible to keep the approval process moving.
  • For current college students, the SAR will also provide an update on the current level of federal student loan borrowing.
  • If awarded a federal Pell Grant, you will find it on the SAR. This grant is based on your EFC, cost of attendance, and your student's full- or part-time status.

Additional FAFSA Tips

  • The first "F" in FAFSA stands for "Free." There is no charge to submit an application on the official ed.gov website. Beware of online companies that will contact your student and offer to help them "maximize their financial aid award" by charging a fee to help them submit the FAFSA!
  • Be on the lookout for free financial aid/FAFSA preparation workshops at your local high school, community college or town library.
  • Current high school seniors applying to college should complete the FAFSA as soon as it is available and can send the application to all the schools to which they're applying. Colleges and universities will typically offer an estimated financial aid award around the same time that they offer admission.
  • The deadline for submitting the 2020–21 FAFSA is June 30, 2021. HOWEVER, states and colleges/universities have their own deadlines that are often much earlier. Schools in particular will have “priority filing” deadlines that must be met. At some, the earlier a student submits the forms, the greater the chances of receiving institutional financial aid. Look at a college's financial aid office webpage to find the deadline, or call.

CSS Profile

A second form, CSS Profile, is used by almost 250 colleges, universities, professional schools and scholarship programs to determine a student’s eligibility for the institution’s own grants and scholarships (which may be need-based, merit aid or a combination). CSS Profile is also available on October 1 and also uses prior year taxes for assessing a student’s financial need. In addition, CSS Profile collects estimates of the current year’s income for both students and parents and projected income for the following year as well, and some colleges may ask similar questions on their own financial aid forms.

CSS Profile is managed by the College Board, the same company that administers the SAT, PSAT and AP tests, so if your student has taken those tests, they will already have a login which makes it easy to get started. There is a fee to submit CSS Profile to the schools your student attends or is applying to but fee waivers are available for eligible families. Find out more about fee waivers as well as information for divorced/separated families, international students and more on the CSS Profile website.

529 Savings Accounts and Financial Aid

Is your family using 529 savings accounts to help pay for college? Good news: changes made to the FAFSA in recent years will give you more flexibility about which accounts to draw on when.

You may know that qualified distributions (payments) from parent- or student-owned 529s are not reported as income and are ignored by the FAFSA formula when calculating your EFC. However, qualified distributions from 529s owned by a grandparent or third party count as untaxed student income on the FAFSA and can decrease your student’s financial aid.

For this reason, in the past families were advised to hold off until the final year of college to tap into grandparent 529 accounts. Now, with the FAFSA collecting tax year information from two years prior to the academic year when the aid will be received, families can use grandparent or third-party 529s to finance the last two years of college without it impacting FAFSA formulations and the student’s financial aid eligibility.

Additionally, recent changes in the Asset Protection Allowance will also affect 529 Savings Plans and how they are reported on the FAFSA.

According to SavingforCollege.com, there are three factors that affect whether 529 college savings plans are counted on the Free Application for Federal Student Aid (FAFSA) and the extent to which they are counted:

  • Simplified Needs Test. If parental income is less than $50,000 and they satisfy certain other criteria (type of tax return filed or eligible to file, receipt of certain means-tested federal benefits or a parent is a dislocated worker), all assets are disregarded on the FAFSA.
  • Asset Protection Allowance. The asset protection allowance shelters a portion of parent assets. It was originally intended to shelter college savings funds. In 2009–10, the asset protection allowance could cover as much as three years of tuition, fees, room and board at an in-state public 4-year college. Today, it covers less than a third.
  • Contribution from Assets. Any remaining reportable assets, after applying the Simplified Needs Test and Asset Protection Allowance, are assessed on a bracketed scale with a top bracket of 5.64 percent.

Financial Aid Throughout College

If your student wants to continue receiving financial aid beyond the first year of college, they need to complete the FAFSA (and CSS Profile if it applies) each year. Students must refile the FAFSA to qualify for government aid — federal grants, federal student loans, federal parent loans and work study — and institutional grants and scholarships.

There are a few reasons for this. Families experience job changes, increases and decreases in income, graduations, marriages, births and other life events that affect finances, taxes and financial aid eligibility. One simple but significant change in family circumstances that impacts aid is an increase in the number of children in your family attending college in a given year.

Financial aid formulas also change each year. If a college raises tuition, room, board, fees, etc., it must then adjust its COA (Cost of Attendance) which in turn affects the formula it uses to determine need-based aid. Your EFC (Expected Family Contribution, generated by the information you enter on the FAFSA) is also adjusted each year.

Always file the FAFSA even if you think your family might not qualify for federal aid. Colleges use this form when giving out their own scholarship and grant funds. Even if your student didn’t receive financial aid the previous year, they might qualify for merit aid based on academic performance while in college.

Renewal Tips

Your student will not have to start a new FAFSA every year. The renewal FAFSA is populated with the previous year’s personal and demographic information. Your student can access the form and its information by using the FSA ID that they used the previous year to file. Gather all documents, personal and financial, in advance.

CSS Profile must be completed every year as well. Once your student has logged in to their account with their username and password, they can download a printable application worksheet that will help them gather all the pertinent information for renewal. For the schools that require CSS Profile, your student’s eligibility for merit aid is directly tied to this form.

If your student currently receives financial aid, the school will communicate directly with your student about procedures and deadlines for renewal. Information will also be available on the college or university's Financial Aid Office webpage.

Be sure also to read:

Updated for 2020–21 with contributions from CollegiateParent staff.

Suzanne Shaffer counsels students and families through her blog, Parenting for College. Her advice has been highlighted on Huffington Post, Yahoo Finance, U.S. News College and TeenLife online and she has written for Smart College Visit, College Focus, Noodle Education and Road2College. Her articles have also been featured in print in TeenLife, UniversityParent and CollegiateParent publications.

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Toni
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Toni

Hello, I am a single parent and through the FAFSA my son is getting financial aid for his first semester/year 2017 since he was 17. For the new year since he is now 18 can he do his own FAFSA and maybe get more financial aid, how does that work? Thank you.

Diane Schwemm
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Your son can fill out his own FAFSA but will still be required to include information about parental income unless he is "emancipated" (not a dependent for tax purposes, and not receiving any financial support from parents). He does need to fill out a new FAFSA each year and any other financial aid renewal forms required by the school.

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