The new Free Application for Federal Student Aid (FAFSA) is now available. The sooner families file, the better!
Submitting it is one of the most pivotal steps in the college application process for students planning to attend college next academic year.
But even if you are still weighing your post-high school plans, submit the FAFSA as soon as possible. You want to be first in line for financial aid in case you attend college next fall, and some types of aid are first-come, first-served or from programs with limited funds.
The COVID-19 pandemic and a less-than-conventional back-to-school season has been challenging for most families. But completing the FAFSA should remain at the top of every high school senior and college student’s to-do list.
Filling out the FAFSA opens the door for students to access federal grants, loans and work-study programs. The documents are also used to determine eligibility for state financial aid and money offered directly from the school.
Although the FAFSA period for the 2021-22 academic year runs through June 2022, the earlier families fill out the FAFSA, the better the chance to be in line for that aid, experts say.
Plus, there's no need to wait for a 2020 tax return before filing the FAFSA since the 2021-2022 FAFSA is based on a household’s latest federal income tax return from 2019.
The U.S. Department of Education continues to take steps to update the online version of the FAFSA app that was launched in 2018. Experts encourage parents to complete the FAFSA online for the fastest results. Online submissions are received immediately, while mailed-in forms can take several weeks to arrive and process.
Having a 529 plan can affect a financial award package, but the impact may vary based on who actually owns the plan.
- If a 529 plan is owned by a dependent student or a dependent student’s custodial parent, it is reported as a parent asset on the FAFSA.
- If a 529 plan is owned by an independent student, it is reported as a student asset on the FAFSA.
- If a 529 plan is owned by a grandparent, a noncustodial parent or anybody else other than the student or a dependent student’s custodial parent, it is not reported as an asset on the FAFSA, instead it is treated as unearned income and reported on the FAFSA the year after it is distributed for qualified higher education expenses for the benefit of the student. Related: Can I Combine a 529 Plan with Financial Aid?
To get started, students will need their Social Security number, federal income tax information (or their parents'), investment and bank records, and a federal student aid ID that can be obtained from the FAFSA website.
For tips on completing the FAFSA, visit the Federal Student Aid website.