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Five Common Mistakes To Avoid When Filling Out the FAFSA

Feb 19, 2008 Jennifer Williamson, Distance Columnist | 1 Comments

When looking for financial aid for college for yourself or for your child, your first step is often to fill out the Free Application for Federal Student Aid (FAFSA).  Of course, that’s easier said than done.  The FAFSA is a complicated document, and making a mistake could cost you thousands in financial aid dollars.  When filling out your application, here are a few common mistakes to avoid.

1. Choosing not to fill it out at all.

 Many people believe they make too much to qualify for federal tuition aid, so they don’t bother with the FAFSA.  This is a mistake.  Both the government and individual schools use this form to qualify you for a range of low-interest loans, grants, and scholarships available to people of all income levels—not just the neediest applicants. 

However, your financial need isn’t determined simply by your income.  Schools and the government look at a variety of factors, including your age and the number of dependents you have in college.  Even if you think your income is too high to bother with the FAFSA, other factors might qualify you for need-based student aid.

In addition, more expensive online private colleges are coming to recognize that tuition hikes and high-interest student loans are becoming a problem even for those from middle-income families.  Some have expanded their requirements to offer more aid to higher-income students.  No matter what your income is, you should fill out the FAFSA—or you could miss out.

student and form


2. Waiting too long to fill it out. 

If you wait too long to fill out your FAFSA, you could lose out on some funds.  That’s because some aid—particularly scholarships from individual colleges—is given on a first-come, first-served basis.  You should fill out the form as soon as possible after January 1 of the year you’re seeking aid for, as some schools’ deadlines close as early as February 1.

3. Listing assets that aren’t asked for. 

You don’t need to put all your assets on the form—and if you do, it could reduce the amount of aid you’re qualified for.  In particular, the FAFSA does not require you to include retirement assets when you fill out the form.  So if you have money in an IRA, a 401(k), a 403(b), or a 457 plan, you should leave it off the assets section of the form. However, untaxed contributions to these funds may be counted as untaxed income.

In addition, there are a few other types of assets that are not asked for on the FAFSA—for example, 529 accounts opened in a student’s name.  In the current FAFSA, there is no space on the FAFSA to list accounts like these in a child’s name, so parents shouldn’t include them when listing the child’s assets.  This is set to change starting in the 2009-2010 academic school year.

4. Listing assets twice. 

Watch for sections of the FAFSA that seem to request assets to be listed twice.  Some accounts could conceivably be listed under both parents’ and students’ assets, such as certain online education savings accounts under the child’s name.  The general rule is that if you have an education savings account in a parent’s name, it should be listed under the parent’s assets—not the child’s.  If you list it under both categories, it could be counted twice.

5. Letting the higher-earning parent fill out the form if you’re divorced. 

The FAFSA only looks at the earnings of the household that has custody of the child.  If you’re filing for a child’s financial aid, arrange for the less wealthy parent to have primary custody of the child in the year before you plan to send your child to college.   If both parents plan to contribute to the child’s tuition, it doesn’t matter—only the less wealthy parent should have assets listed.

The FAFSA is a complicated document, and it can be confusing.  But it’s important to get it right; a misstep on the form could lead to you missing out on thousands of dollars in financial aid.   Take your time and watch out for these common errors, and you’re more likely to get a better deal on college financing.


Darius Ajama Over a year ago

A nice article.

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