The Free Application for Federal Student Aid (FAFSA) is the first step in getting financial aid for college. Information on the FAFSA is used to calculate how much a student can get in both federal aid (grants and scholarships) and federal loans.
FAFSA must be filled out each year, and the sooner the better! Although the traditional deadline is June 30, January is a much better time to have the form completed. Each state distributes the aid, and some have earlier deadlines while others give on a first-come first-serve basis.
The problem for early filers is they must give their financial information based on the previous year’s income, and W-2 forms, as well as other financial information, may not come out until late January or even later. But this problem can be solved. You are allowed to file the form early based on income estimates. When the information becomes available, you need only update the information right online. Also, starting in 2016, filers can file even earlier, by October 1, with estimates for the following fall.
Please note: Income as well as assets are used to determine the level of aid a student can get. Parents are not expected to tap into retirement funds (IRAs and 401ks), but stock portfolios and capital gains do count. Depend status of a student helps, and having a single-parent home also helps. Never think a family makes too much to fill out the FAFSA because you could still be eligible, at the very least, for low-interest federal loans. Be aware, also, you can always request a review of any financial aid package a college offers you.
Be prepared to file the FAFSA early for the fall of 2017! October 1 is the date you should aim for.