FinAid - Financial Aid Advice The SmartStudent Guide to Financial Aid
Site MapAbout FinAid
 
Loans
Scholarships
Saving for College
Military Aid
Other Types of Aid
Financial Aid Applications
Answering Your Questions
Calculators
Beyond Financial Aid




Advertisement


 
Common Errors on Financial Aid Applications

Advertisement

Making a mistake on the FAFSA can delay the processing of your application, because it takes an additional 2-3 weeks to process a corrected application. 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 1-800-4-FED-AID (1-800-433-3243). The financial aid administrator at your school can also answer your questions. Their only purpose is to help you, so take advantage of their assistance.

You can also find the answers to some of your questions in the Answering Your Questions section of FinAid. Finally, the US Department of Education 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 of wisdom.

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. Also, failing to answer a question (leaving it blank instead of writing in a 0) is another common error

Get expert financial advice on everything related to applications, aid eligibility and evaluating financial aid award packages right here.

To see other common errors by topic, click the topic.

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.

  • 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.

  • The 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. 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.

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.

  • 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.)

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 parents.

  • 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.
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.s 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, a Federal Need Analysis Methodology devised to increase eligibility for low income families and individuals, 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.
(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, like National Guard, 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, 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.
FAFSA Worksheets

  • 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 correct value.

  • 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.
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.

  • In the question that asks about your interest in different types of aid, like 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. 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 aid.

  • 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.
Signatures

  • Sign the form and make sure everybody who is supposed to sign the form signs it. An unsigned form will not be processed.

  • 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.
Miscellaneous
  • 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. If you leave an income or asset question blank, the federal processor will assume that you forgot to answer the question.

  • 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 professional judgment review. Any enclosures with the FAFSA form will be destroyed. Likewise, do not write comments or notes in the margins of the form.

 

 
Home | Loans | Scholarships | Savings | Military Aid | Other Types of Aid | Financial Aid Applications
Answering Your Questions | Calculators | Beyond Financial Aid | Site Map | About FinAid®
Copyright © 2014 by FinAid Page, LLC. All rights reserved.
Mark Kantrowitz, Founder
www.FinAid.org