The fall is here and this means it is also FAFSA time for college. This year FAFSA submission will again be delayed. The Department of Education (DOE) announced that the FAFSA will have a controlled limited launch on October 1st and then full availability in December, 2024 for the FAFSA 2025-26. We have created a FAFSA Launch Timeline for you to review.
Completing the FAFSA is an important step in the college funding process, and we believe that every student should complete the FAFSA for a variety of reasons. The FAFSA submission generates your Student Aid Index (SAI) which is an important number in the financial aid process and packaging. The colleges determine your financial need by subtracting the Cost of Attendance (COA) by your SAI.
PayForED has a suite of comprehensive student loan solutions to help you plan your child’s educational future. To help you better understand completing the FAFSA.
Listed below are a series of steps that will help you navigate the FAFSA submission.
FSA ID is Needed when Completing the FAFSA
The first step in completing the FAFSA is creating the FSA ID. This User ID and password used to sign various federal documents and give you access to some of the federal loan systems. We have created an entire article on creating your FSA ID so that our readers will understand the steps involved in creating your FSA ID. For dependent students, both the student and either one or both of the parents will need to create their own FSA ID depending on a variety of situations.
If you are an independent student, only the student needs an FSA ID. Here is a list of the most common independent types:
- Age – 24 or older
- Veteran
- Married
- Students with dependent children supporting themselves
- Have an undergraduate degree
- Some foster children and wards of the court
- Some emancipated minor
- Homeless or self-supported
Timing of Submitting the FAFSA
As stated above, the FAFSA or Free Application for Federal Student Aid is the form that generates the SAI. Families also need to complete the FAFSA to qualify for federal financial aid and many state aid programs. The FAFSA electronic form is available in December, 2024 for the upcoming college school year of 2025-26.
Many families believe that the FAFSA should be completed as soon as possible. In the past few years, there have been a few issues or bugs that occurred at the initial stages of the FAFSA submission process. Due to past history, by waiting a few days, you may avoid some system frustration, and it will have little to no effect on your financial award.
Due to FAFSA Simplification, the FAFSA submission now has an automatic feed from the tax system. It would be best if you did an estimate first because the IRS data integrates directly into your FAFSA, and you will not be able to see the data imported. It is now a blind submission for personal identity security. For the first-time FAFSA filers, you may want to get an estimation of your Student Aid Report or SAR by using a financial aid calculator like the College Cost Analyzer. As part of our newsletter list, we do issue alerts if we identify any significant issues with FAFSA or any other college funding topics.
The FAFSA needs to be submitted each year for each student. Some colleges require additional financial aid information such as the CSS Profile or their own supplement forms. For newly entering college students, getting the form in early is beneficial. For returning students, April is the recommended time frame, if not before, based on the college’s deadline.
An important note with regards to your income and assets. The income and taxes are reported based on the FAFSA Prior Prior timing. This means for FAFSA 2025-26 taxes will be 2023. If there is a significant change in your income, you should contact the schools and explain the change. Assets are reported as of the day of FAFSA submission. This reporting difference is an important item to realize and is confusing.
Entering Your College List when completing the FAFSA
The FAFSA allows you to input twenty colleges at a time. If you have more than twenty colleges, you will need to go back and enter the remaining colleges. You will need to wait until the initial FAFSA submission has been processed. FAFSA Processing will generally take 1 – 3 days, depending on the time of year.
Once the original FAFSA is processed, then the student can enter the remaining colleges.
It is recommended that you have a campus location since some colleges have multiple locations. You want to make sure it goes to the correct college. On the other hand, some colleges have centralized the financial aid process, and only one campus will be listed, and your college application needs to indicate the campus.
Signing the FAFSA
For the FAFSA process, each student and either one or both dependent student’s parent will need an FSA ID before completing the FAFSA. The student and the parent do not share an FSA ID. The FSA ID is needed to sign the FAFSA. It is your electronic signature. The independent student will only need their FSA ID to sign. You need to realize this is a legal document and should reflect the information correctly at the time of signature.
The new FAFSA Simplification process may require both parents to have an FSA ID and password. The most common situation where this would occur is when parents are filing their taxes, married and separate. The other conditions would be in divorced, separated, and never-married situations.
Starting with the FAFSA submission for the school year 2024-25, families will be required to opt-in to the IRS integration. This process will directly import the student’s and parent’s tax information into the FAFSA from the IRS data. If you do not opt-in, the FAFSA will not be submitted to the schools and the student will not qualify for need-based financial aid. Reviewing the Prior Prior tax information will help you understand who needs a FSA ID. As stated above, for FAFSA 2025-26 the tax year used is 2023.
Divorce and Separated Parents
As you can see, the FAFSA process is highly dependent on the IRS system. If the parents of the filing student are divorced or separated, then the parent who is submitting the FAFSA should be the person who claims the child on their taxes. Many divorced and separated families overlook or do not properly plan.
On another note, parents who are divorced or separated need to have separate mailing addresses for this to work. Living in the same location will be considered a household, and both incomes will be included. If the submitting parent has remarried, then the new household will be used, and biology is overridden.
These rules may be changed starting for school year 2024-25 under FAFSA Simplification.
Summary
The FAFSA process needs to be completed each year if you want to qualify for federal financial aid or Direct Student Loans. With each submission, a Student Aid Report or SAR will be generated, confirming the changes. As stated above, I feel every family should complete the FAFSA.
As a help in the financial aid process, PayForED has a college planning tool, College Cost Analyzer. This easy-to-use student loan software can help families generate their SAI calculation, calculates a four-year estimate of college expenses, and helps families understand their debt structure. A family student loan debt structure is becoming more important as it will determines the borrower’s repayment and forgiveness options.
