The FAFSA (Free Application for Federal Student Aid) determines the expected family contribution – a rough estimate of how much money the family will be expected to contribute (EFC) for a year of college education. Many factors come into play to determine the EFC, including the number of family members in college and your family’s savings, earnings and assets. College financial aid offices use the FAFSA to determine a student’s need-based financial aid. Here are a few tips on preparing the FAFSA and helping to minimize the EFC.

  1. Submit the FAFSA as early as possible. Technically, you will have plenty of time to meet the deadline (October 1, 2013 for the upcoming academic year) but most colleges set their priority deadlines between early February and the middle of March.
  2. If your current-year tax return isn’t ready before the deadline, you should estimate the required information. You can use a combination of prior year tax returns, current year-end pay stubs and bank or investment statements to get estimated figures. It’s much better to use estimated tax information than to miss a deadline. Update your FAFSA once you complete your tax return and the information will automatically update with all of the selected colleges.
  3. When reporting investment net worth, remember to consider any debt owed. The net worth is the asset value minus debt owed.
  4. While you do not have to include the total value of qualified retirement plan savings as part of investment net worth, you must include your pre-tax contribution to the plan as part of “untaxed income.”
  5. When reporting parent information in split family situations, include information from the parent that the student lived with 51 percent of the time. If the custodial parent is remarried, all income and asset information from the new spouse must also be included in the FAFSA application.
  6. Pay down consumer debt. Much of the EFC is determined by how much you have in savings. Parents who are considering paying down their debt have another reason to do so since it will bring their savings balance down and potentially help decrease their EFC.
  7. Move money out of your child’s name. For tax purposes, parents sometimes move assets to their children. But when it comes to financial aid, when assets are in the child’s name, your expected family contribution toward the college education tends to be higher than when those assets remain under your name.
  8. Don’t leave any items blank on the FAFSA form. If the appropriate response is zero, then enter zero. Blank lines could delay the processing of your financial aid information.
  9. After you submit the FAFSA, you should receive an output document called the Student Aid Report, or SAR. If you provided an email address on the FAFSA, you will receive an email with a link to this information within three to five days. The SAR will indicate your EFC and tell you if you are eligible for a Federal Pell Grant. Carefully review the SAR to look for any errors. If corrections need to be made, you can make corrections online at
  10. After submitting the FAFSA and receiving a college’s financial aid award, you can appeal to the college to adjust your financial aid based on unusual circumstances like a layoff, future salary reduction, unusual expenses or perhaps a large bonus received in the reporting year. You will need to provide documentation for these unusual items. Should the college determine that the circumstance merits an adjustment, it may offer more aid.
March 1, 2013 12:00 am