Student Loans and Applying for Financial Aid

The year is 2018, and there are 44 million Americans currently in debt valued at over $1.5 trillion. Today, student loan debt is the second largest consumer loan debt category, coming behind mortgage debt and above credit cards and auto loans.

To provide a bit of perspective, this means that the average loan debt of a member from the class of 2017 is a whopping $37,172, a $20,000 increase from thirteen years ago.

But this does not necessarily spell gloom and doom for incoming members of the class of the 2019/2020 set. There are multiple organizations students can apply to today to seek grants, scholarships or interest friendly loans.

An example of such an organization is FAFSA (Free Application for Federal Student Aid). FAFSA is a federal government aid program that is rolled out annually for current and prospective students (undergraduate and graduate) in the United States. Usually, a form, the answers to the questions on the form are used to determine eligibility for student financial aid from the government.

The FAFSA form for the 2019/2020 session will be officially available to the general public from the 1^st of October 2018. It is important interested candidates fill the form from the official site, fafsa.gov.

But before you go form hunting, it is essential you know what you are up to with FAFSA. Here are the key things you need to know:

FSA ID:

The FSA ID refers to your username and password that could be used to log in to some U.S department of education (ED) sites. Every student interested in FAFSA along with their parents are required to get an FSA ID to begin the FAFSA procedure. To get ahead of the pack, it is advisable you create your FSA ID before the form gets released in a bid to prevent delays and disappointment.

Recap:

Getting an FSA ID is a necessity for those who are looking to pick up the 2019/2020 FAFSA form
Should you be required to get parental information on the form, your parents would need to procure an FSA ID as well
Your FSA ID is the same thing as your signature. This is why each person’s ID is different and should be treated as such. ID’s should be created using your own email and phone numbers and avoid creating an ID for your parents or vice versa
Creating an FSA ID can take up to three days. We advise creating your FSA ID now to prevent unnecessary delays

Social security number:

In case you do not know your number, you can check your social security card. And if your card is missing, take the necessary steps to get a replacement card from the Social Security Administration. International students who wish to apply for FAFSA but don’t have a social security number should get their alien registration number.

Driver’s license number:

This could also be found on your card. However, if you have never been issued a license, you can easily skip this step.

Tax records

According to a recent change made to the FAFSA process by the Department of Education, individuals interested in FAFSA are required to report income information from an earlier tax year.

On the form for the 2019/2020 session, you (and your parents/guardians) are expected to report 2017 income information as opposed to 2018 income information.
You are expected to have filled 2017 taxes by the time FAFSA opens so you can easily import tax information into the form by using the IRS data retrieval tool.
Since not everyone is eligible to use the data retrieval tool and it does not input all the financial information required on the form, you are expected to have 2017’s tax return and 2017 IRS W-2 on standby for reference if necessary.
2018 tax information cannot be used for this form. Should you come from a family whose 2017’s income fails to correctly represent the correct financial information, you are expected to fill the form with the necessary information, contact the schools you are applying to explain and document the changes in your family’s income. The schools would be able to assess the situation and make the necessary changes to the form if necessary.
2019/2020 forms cannot be filled with 2018’s tax information after the 2018 taxes have been filed. What is required is the information from 2017.

Records of untaxed income:

The form asks questions about any untaxed income that may or may not apply to you. Some of these include questions about child support, interest income, and veteran noneducation benefits.

Detailed records of monetary assets:

Questions in this section pertain to checking and savings account balances, along with the value of investments like stocks, real estate, and bonds. You are expected to record the amount as of the date the form is signed and not the value found within the 2017 tax year amount.

A common mistake made my several FAFSA applicants is misreporting the value of investments. It is important to review what is a student investment, parent investment and what isn’t. Also, ensure you do not over-report or under report.

List the schools you wish to attend:

When answering this question, ensure you add all the schools you are considering including those you haven’t applied to and those you haven’t been accepted at yet. This is because even though there may be a slight chance of acceptance at a college, it is easier to remove schools from the form than it is to add new schools because most schools work with a first come, first served basis.

Schools featured on your list will receive your FAFSA results automatically via email. This information will be used to determine the type and amount of aid that may be available to you. Aid is only offered after the school offers admission.