The Free Application for Federal Student Aid, or FAFSA, became available on Oct. 1 this year, three months earlier than in the past.
1. File Early.
As a result of the earlier FAFSA release, a small number of colleges have moved their financial aid deadlines into November or December, ahead of their admission application deadlines. A lot of aid is first come, first served, so you should still submit your FAFSA as early as you can. This is especially true for cash-strapped state universities.
2. Filling in your Financial Info is Easier.
For students starting college in the fall of 2017, families will use 2015 income tax information. Now you can use the IRS Data Retrieval Tool to automatically fill in parts of the FAFSA based on your 2015 return.
3. You Don't have to List Everything.
Report only the types of assets and investments that the FAFSA specifically asks about. For example, don’t include your IRAs, 401(k) plans, and other retirement accounts, which are not supposed to be counted on the FAFSA.
You should also omit any equity you might have in your home and the value of any small business you own that has fewer than 100 employees.
4. File even if you don’t Expect Aid.
Just submitting a FAFSA will automatically qualify you for a low-cost federal student loan of up to $5,500 for freshman year.
The interest rate on undergraduate student loans is currently 3.8% plus about 1% in fees, which works out to an annual percentage rate of roughly 4.1%.
The FAFSA is also required for many other kinds of aid, including work/study jobs; federal parent PLUS loans; scholarships from state agencies, private foundations, and colleges; and, in a few cases, merit aid.