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Financial Aid Awareness Month -- FAFSA Tips & Common Mistakes to Avoid

Throughout the month of February, the higher education community celebrates Financial Aid Awareness Month in an effort to provide crucial information to students and families about access to federal, state, and institutional student aid.

During the time I worked in a financial aid office and the subsequent years as a college planner, I’ve seen just about everything. I estimate about 75% of families incorrectly fill out some part of the FAFSA, which usually resulted in an artificially higher EFC (soon to be renamed SAI), which meant a family qualified for less financial aid than what they really should have received. With that in mind, I want to share the following insights.

  1. When working with the FAFSA, I strongly recommend using their online version and not the paper version. Be sure you are using a “.gov” website. There are plenty of scammers out there who want to steal your information or money by creating a fake FAFSA site. So always look for “.gov” in the URL. The real FAFSA is always free to complete. I like to start here: (notice the “.gov” about midway in the URL).
  2. If you are a first time user of the FAFSA, both the child and one parent will need to e-sign the FAFSA, which is accomplished by setting up your own PIN, or what they call FSA ID. You will need to retain these FSA ID’s as this is what you’ll use for the subsequent years as well. The FSA ID’s can be set up at (again you should notice the “.gov” in the URL).
    1. As a side note, it’s common for the child to use their high school email when setting up the FSA ID. You don’t want to do that as they will need access to the email well after high school. Be sure to use some other email address that they can use moving forward.
  3. Deadlines – the deadlines noted on the FAFSA website are solely for Federal funding. Don’t use those. Instead you need to check the deadlines posted by each college’s financial aid office.  Also, I don’t recommend trying to fill out the FAFSA the first week it opens up and don’t wait until the final week either. The Dept. of Ed’s network is very fragile and easily gets overloaded. I usually like to fill out the FAFSA in November unless there is a strategic reason to wait until December, January, or February. But to give you an idea of the common complaints with the FAFSA site crashing or not working properly, just visit to see what other people are saying.
  4. If your child is applying to more than 10 colleges, you will need to submit the FAFSA more than once. The FAFSA limits you to 10 colleges per submission. After you complete the FAFSA with the first 10 colleges, you can log back in and revise the college list. After you revise the college list, you will need to submit the FAFSA again. The Department of Education will process all those submissions and forward them to all the colleges noted.
  5. Be mindful to not make any typos or enter abbreviations on the FAFSA. For example, if your child’s name is Joseph, don’t enter Joe. The name on the FAFSA must match your Social Security card.
  6. When entering numbers on the FAFSA, don’t use commas or decimal points. You simply round to the nearest dollar.
  7. Don’t guesstimate when answering the financial questions on the FAFSA, such as how much is your income or how much you have in assets. You are supposed to pull the data from your actual tax return and various financial statements. Here is a checklist of documents you should have when completing the FAFSA: All too often I have seen parents over-estimate their financial figures, which led to them qualifying for less financial aid.
    1. When it comes to income, the FAFSA asks about the “prior prior” year. By this I mean if a student is applying for the 2022-2023 academic year, the income used by the FAFSA comes from the 2020 tax return. However, when answering the FAFSA questions about assets, the values you enter are to reflect the day you are completing the FAFSA. So if the amount of money in your checking and/savings accounts significantly fluctuates during the month, or if you have been saving up for something which you intend to purchase soon, you may want to be strategic in the timing of when you complete the FAFSA.
    2. The FAFSA encourages you to import your tax information using their IRS Data Retrieval Tool. Every where you look, you’ll hear how much simpler it makes completing the FAFSA. However, I don’t like it and never recommend using the IRS Data Retrieval Tool. For one, if you do use the IRS Data Retrieval Tool, and submit the FAFSA, you cannot go back and edit your financial data. You are locked out. The second reason I don’t like the IRS Data Retrieval Tool is if you filed an amended tax return for the year in question, the IRS Data Retrieval Tool imports the original tax return, not the revised version. The final reason I don’t like using the IRS Data Retrieval Tool is if you happen to have a retirement account roll over into another retirement account, the IRS Data Retrieval Tool interprets that rollover as actual income. Therefore your income figure is over-inflated, which decreases the amount of financial aid for which you may have qualified.
    3. Overstating the value of assets on the FAFSA sometimes happens when the instructions are not carefully read. For purposes of the FAFSA, your assets do not include your primary home, your retirement accounts, nor the money built up in a permanent life insurance policy. But assets do include the values of your 529 savings plan, trust funds, stocks, bonds, money markets, other real estate, and more.
  8. Since the FAFSA uses prior prior income figures as one of the factors in determining financial aid, it’s important to let the colleges know if there has been a significant change (read reduction) in your income more recently. The FAFSA doesn’t really have a place for you to note any changes in your financial circumstances. In such an event, you will need to communicate with the financial aid office at each college to which you apply. Typically this occurs as an email to the financial aid offices. You cannot afford to be vague in this email, such as “We made less money in rental income this past year because our tenant could not pay and we could not evict them”. Instead you need to provide the financial aid office specific details, such as how much income you have lost. Are you still losing income, or do you have a new tenant? Be sure to include whatever documentation that you can provide as well. If you send a vague message, some financial aid offices will follow up asking for more details, but some financial aid offices won’t even bother. So be proactive from the start.


Need Help?

If you have any questions or need help with the financial aid process, be sure to contact your in-house college planner today.

J.P. Schmidt