Whether you're applying for your own college aid or helping your teen get started on their college applications, you've probably heard of the Free Application for Federal Student Aid (FAFSA). This document holds an important place in the college aid process and may even impact the college or university you attend. Below, we discuss some tips and tricks for navigating the FAFSA for the 2021-22 academic year.
Why is the FAFSA So Important?
The FAFSA sets forth the income and assets deemed available to the student during the academic year. The FAFSA generates an expected family contribution (EFC), which dictates how much financial assistance may be available to you and what types of assistance you may qualify for—from subsidized federal student loans to Pell Grants or other aid.
What to Know About This Year's FAFSA
The FAFSA for the 2021-22 academic year was made available on October 1, 2020. The FAFSA for 2022-23 is likely to be available around the same time in 2021.1
Before you begin filling out the FAFSA, you need to gather a few key pieces of information:
- Your Federal Student Aid login information2
- Your Social Security number
- Your prior year's tax return
- Income records for the last tax year
- Records of your assets (like checking and savings accounts, 529 savings accounts, real estate holdings, and investments)
- The names of the colleges you're planning to apply to
By listing your prospective colleges on the FAFSA, your results may be sent directly to them, streamlining the admissions process if you decide to attend.
What to Do With Your FAFSA Results
Once you've completed your FAFSA and received your EFC figure, you may have a better idea of the types of aid you may qualify for and how much you may need to pay out of pocket. In many cases, you may be able to take out student loans to cover the difference. In other situations, you might be able to use saved assets like a 529 account.
It's often a good idea to create a spreadsheet for your prospective schools. This spreadsheet may include information on the cost of attendance for each school, your EFC, the school-specific grants that are available, and how much you may be responsible for paying on your own. Although cost doesn't need to be the only factor you consider when selecting a school, knowing exactly how much you can expect to pay can make it easier to make your college choice.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
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