Common Errors on Financial Aid Applications
Making a mistake on the FAFSA can delay the processing of your
application, because it takes an additional 2-3 weeks to process a
Most mistakes on the FAFSA could have been avoided by carefully
reading the instructions and questions. If you don't understand a
question or are having trouble filling out the form, call the Federal
Student Aid Information Center at the number listed in the Help Completing the FAFSA section. The
financial aid administrator at your school can also answer your
questions. Their only purpose is to help you, so take advantage of
You can also find the answers to some of your questions in the Answering Your Questions section of FinAid.
The US Department of Education also provides advice on
completing the FAFSA
on their web site. It includes a copy of the
instructions that accompany the FAFSA in addition to a few extra words
Make a copy of the form before mailing it.
Most Common Errors
The most common errors on the FAFSA involve the answers to questions
involving Adjusted Gross Income (AGI), total income tax, Social
Security Number (database mismatch with name or date of birth),
marital status, and the Worksheets.
Failing to answer a question (leaving it blank instead of writing in a
0) is another common error.
The FAFSA instructions concerning income earned from work
are incorrect. This usually leads to an earned income figure that is
too low, which causes certain tax allowances to be too low, which in
turn leads to an EFC figure that is too high. To correctly
calculate income earned from work, add Box 5 of your W-2
statements to line A.4 or B.6 of Schedule SE.
Errors involving Taxes
- A common error is to report total income tax equal to the Adjusted
Gross Income (AGI). Generally speaking, total income tax should be less than
the AGI. This happens most often when you report the amount of taxable
income (AGI) in the answer to the question about tax liability. This
is such a common error that there are standard rejects for such FAFSAs
(rejects 3 and 12).
- Another common error is to report taxes withheld or tax due
instead of total income tax. The total of your withholdings can be higher or
lower than the total income tax. If you got a refund, it was higher. If you
owed additional tax, it was lower. Be sure you are reporting the total
total income tax (the total tax liability) and not just the withholdings or
the additional taxes due.
- Note that the FAFSA asks for the last line in the Tax and
Credits section of the income tax return (line 55 of the 2012 Form
1040), not the total tax line of the Other Taxes section (line
61). The taxes in the Other Taxes section are traditionally not
included in the FAFSA's "total income tax" field, in part because
they are already considered by the need analysis formula. If you use
the wrong line from your income tax return, you will have made an
error that needs to be corrected.
- If you filed an IRS Form 1040 even though you were not required
to file a 1040, you should fill in the oval to indicate whether you
were eligible to file a 1040A or 1040EZ. A 1040TEL form is equivalent
to a 1040EZ form. To see whether you required to complete an IRS Form
1040, look at the simplified needs
head of household
filing status is prone to error and abuse. Most cases where a family
files as head of household are incorrect. If there is an error in the
filing status on the income tax returns, the school will require the
family to file an amended income tax return to resolve the conflicting
information. If the family refuses to file an amended income tax
return, the school is prohibited from disbursing aid.
- Some families indicate that they are not required to file a
federal income tax return even though their income was above the IRS
filing thresholds. Starting in 2007 the online FAFSA will question
such a conflict, and attach a reject code to the FAFSA if
submitted. College financial aid administrators can override the
reject if presented with documentation of one of the handful of
circumstances in which a tax return is not required. Please note that
tax protesters are not eligible for federal student aid; if you are
required to file a federal income tax return but don't, the college
will insist on your filing an income tax return before they will
disburse any aid. Likewise, if an error is found on your income tax
return, the school will require you to file an amended income tax
return. Federal law prohibits a college from disbursing aid until
conflicting information is resolved.
Errors involving Social Security Numbers
- Use your legal name as it appears on your Social Security card. Using a nickname or any other name will cause a processing delay.
- Be careful to write your Social Security Number (SSN) and date of birth accurately and clearly. Any errors in the SSN or date of birth will cause processing delays.
- Check to make sure you haven't accidentally swapped your Social
Security Number with your parents' Social Security Numbers.
- Although you are required to have a Social Security Number,
your parents are not. If your parents do not have a Social Security
Number, don't make up a random number or use a Taxpayer Identification
Number (TIN), as it will fail the database
match. Instead, use 000-00-0000. (If the parents indicate that they
have filed or will file a US tax return, the application will be
rejected with reject codes J or K. If this occurs, resubmit and it
will be accepted.)
Errors involving Marital Status
- If the student is married but separated he or she should answer "Yes" to
the question "As of today, are you married?". Likewise for the
- If your parents are divorced or separated, the parent with whom
you lived the most during the past 12 months is the parent responsible
for filling out the FAFSA. This is not necessarily the same as the
parent who has legal custody. Use the most recent calendar year for
which you lived with either parent. If the parent who is responsible
for completing the FAFSA has remarried, your step-parent must report
his or her income and assets on the FAFSA, even if they weren't
married during the previous year. Prenuptial agreements have no
bearing on this requirement.
- The FAFSA cannot be updated for mid-year changes in an
applicant's marital status. If the student expects to be married in
the near future, they should carefully consider whether to submit the
FAFSA before or after they are married. What matters is the date the
FAFSA was completed, not the date it was signed or processed. (The
signatures on the FAFSA or signature sheet attests to the
accuracy of the information on the FAFSA as of the date the form was
completed, not the date the form was signed.)
For example, suppose an unmarried student submits the FAFSA online on
Friday with a marital status of "married", anticipating her wedding
that weekend, gets married on Sunday, and signs and mails the
signature sheet on Monday. For federal student aid purposes she will
be considered unmarried because she was not married on the date the
FAFSA was completed. Likewise if the student initially completes the
FAFSA as single and changes it online to married before signing and
mailing the signature sheet. Corrections are only permitted when the
marital status on the date the FAFSA was completed was inaccurate, not
when the marital status changed after that date.
If there is any question as to whether the applicant was married, the
school will ask for a copy of the marriage certificate and compare the
date on the certificate with the application date on the SAR/ISIR.
Errors involving Assets
- Prepaid tuition plans are now reported as assets on the
FAFSA. The asset value is the refund value of the account.
- Section 529 college savings plans of siblings are reported as
assets of the parent if the parent is the account owner.
- Custodial 529 college savings plans, custodial prepaid tuition
plans, and custodial Coverdell Education Savings Accounts are not
reported on the FAFSA when the applicant is a dependent student. (This
is only for the custodial versions of these three accounts, where the
applicant is the account owner. Other types of custodial accounts are
still reported as assets of the account owner. Likewise custodial
accounts owned by an independent student are reported as assets of the
applicant.) This change went into
effect starting in the 2007-2008 FAFSA, and was due to a legislative
drafting error in the Higher Education Reconciliation Act of
2005. Congress intended for these assets to be treated as though they
were assets of the parent, but the legislative language just said that
they are not assets of the student. Congress has corrected this error
effective with the 2009-2010 academic year.
- Rental properties are counted as investments, not business
assets, unless they are part of a formally recognized business.
- Pensions, annuities and the cash value of a life insurance policy - known
as a whole-life policy - is not reported as an asset on the FAFSA.
- Even if you qualify for the simplified needs test, you should
still complete the asset information section of the FAFSA. Some states
and schools will use this information for computing their own
financial aid awards.
Errors involving (In)Dependent Student Status
- The question that asks whether you were born before January 1
is very confusing. If your answer to this question does not agree with
your date of birth, it will cause processing delays.
- To be considered a veteran, you must have served on active duty
and must have been discharged under other than dishonorable
conditions. If your service was only for training purposes (e.g.,
National Guard or Reserves, or a ROTC student), you are not considered
a veteran for federal financial aid purposes.
- A legal dependent is a person for whom you provide and will
continue to provide more than half of their support. Support includes
money, gifts, loans, housing, food, clothing, automobile, medical and
dental care, and payment of college costs. If you have a child and
your child is supported by your parents or someone else, you should
answer "no" to the question which asks about legal dependents other
than a spouse.
- If you have an unborn child, and that child will be born before
or during the award year (July 1 through June 30), and that child will
receive more than half of his or her support from you, then that child
should be counted as a member of the household.
Errors involving the Worksheets
- Some families incorrectly report their total income in the
"Student grant and scholarship aid" line of Worksheet C. This is more
common among families that use FAFSA on the Web (fafsa.ed.gov) because
the instructions there make reference to grants and scholarships that
were reported to the IRS on "line 7 of the 1040 or 1040A
or line 1 of the 1040EZ", while the printed FAFSA uses the language
"in your (or your parents') adjusted gross income". The families see
the reference to specific lines of the federal income tax return and
report those figures without fully reading the description. The
intention of this line is to allow families to report just those
scholarships and grants that were included in gross income, not all
income. (The US Department of Education corrected this problem with
the online FAFSA in early 2007.)
- Some families forget to complete Worksheets A, B, and C,
perhaps because they appear at the end of the application. Although
the worksheets are not submitted with the application, the totals for
each worksheet are included on the FAFSA form. Failing to complete the
worksheets may result in an EFC that is higher or lower than the
- The Earned Income Credit (EIC), also sometimes referred to as
the Earned Income Tax Credit, is reported on Worksheet A. It is
not reported as part of "Income Earned from Work".
- Do not include employer contributions to retirement plans as
part of the payments made to such plans on Worksheet B. Only the
employee's contribution should be listed.
- Worksheet C asks for income and benefits that are to be
excluded from taxable income. Most students will report money earned
from work-study here. Remember that the FAFSA is based on the calendar
year, not the academic year. Another common exclusion is child support
paid by the student or any other person whose income is reported on
the FAFSA. If any grant or scholarship aid was reported on the income
tax form, it should also be reported here.
- The Earned Income Credit is considered "untaxed income" on the
FAFSA. Other types of untaxed income include retirement plan
contributions made during the year and military food and housing
allowances. These get reported on the worksheets.
Questions affecting Aid Eligibility
- In the question that asks about bachelor's degrees, answer "no"
if you will not have completed your first bachelor's degree by July
1. If you answer "yes", you will be ineligible for the Pell Grant in
most circumstances. (Contact the school's financial aid administrator
for advice if your bachelor's degree is from a foreign school, as you
may be able to answer "no" if the foreign baccalaureate degree is not
the equivalent of a US bachelor's degree.)
If you have a bachelor's degree from an unaccredited US institution or
distance education college,
you must answer "yes". However, if your degree is from a diploma mill,
destroy it and answer "no" to this question.
- In the question that asks about your interest in different
types of aid (e.g., work-study and student loans), answer "yes" to
each question. Answering "yes" does not obligate you to accept a
loan. Answering "no" will not get you more grant aid.
- Do not skip the questions about the educational attainment of
your parents. The purpose of these questions is to qualify you for
state scholarships for first generation college students.
- If you are using the online version of the FAFSA, do not check
the "Early Analysis" flag if you are actually applying for financial
aid. Early analysis is intended for students who will not be attending
college next year, but would like to file the FAFSA to get an idea of
what their EFC will be for the following year (i.e., high school
students and parents who are trying to plan ahead). If you set the
early analysis flag, your information will not be sent to the state,
which can prevent you from getting state aid.
- One of the questions on the FAFSA asks for permission to
release the information on the FAFSA to your state aid agency. Do not
answer "no" to this question if you wish to be considered for state
- If you are a male between the ages of 18 and 26 who have not
already registered with Selective Service, you should register using
the appropriate question on the FAFSA. If you are required to register
and do not register, you will not be eligible for federal student
aid. If you are female or otherwise not required to register for
Selective Service, you should not answer this question.
Errors involving Signatures
- Sign the form and make sure everybody who is supposed
to sign the form signs it. An unsigned form will not be
processed. Even though the rest of the form should be completed in
black ink, you should sign the form in blue ink.
- If you are completing the form online, make sure you print out
the signature page or that both you and your parents use the correct
PINs to e-sign the form. (Note that the student and parents must each
have their own PINs.)
- If someone other than you, your spouse, or your parents
complete the FAFSA, or told you what to write, that person must
complete the "Preparer's Use Only" section. Preparers must complete
this section even if they are not paid for their services. If the
preparer refuses to sign the form, it's a sign that they encouraged
you to provide false or misleading information on the form. The
penalties for doing so are severe.
- The number one mistake students make is leaving a field blank. All
income questions must be completed. If the answer is zero or the
question does not apply to you, write in a 0. Do not use dashes or
leave the question blank. If you leave an income or asset question
blank, the federal processor will assume that you forgot to answer the
- Dollar amounts on the FAFSA are written without cents. If you
enter $500 as $500.00, it will be misread as $50,000.
- Read the questions carefully. The words "you" and "your" on the
FAFSA always refer to the student, not the parents.
- Remember to count yourself, the student, as one of the people
who will be college students during the award year.
- When you get your Student Aid Report, read it carefully to make
sure it doesn't indicate any problems, such as a missing signature.
- Do not include anything with the form when you mail it. If
there are unusual family financial circumstances, you should contact
the school's financial aid administrator to ask for a
review. Any enclosures with the FAFSA form will be
destroyed. Likewise, do not write comments or notes in the margins of
- Families may find the question about federal benefit programs a
little confusing. The Supplemental Security Income Program (SSI) is
not the same as
Social Security Disability Insurance (SSDI). The acronyms may be
similar, but the programs are not the same. Do not answer yes to the
questions about SSI if you are receiving SSDI.