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529 Tips

Fill Out FAFSA This Fall To Prepare For Next School Year

October is an important month on your calendar as you prepare for your child’s higher education. Beginning October 1, families can submit their Free Application for Federal Student Aid (FAFSA). This form is used by the federal government to determine how much financial aid to give to students for their education after high school. No matter what your family income is, you should always fill out FAFSA because 78% of families receive some amount of financial aid. 

The FAFSA enrollment period runs from Oct. 1, 2022 – June 30, 2024 for the 2023-24 school year. So whether your child will graduate from high school this year or is continuing their higher education, this fall is the best time to fill in FAFSA. Why? This is when the pot of federal student aid money is at its largest and financial aid is typically offered on a first-come, first-served method. So, the later you wait to submit your FAFSA form, the smaller the available pool of money becomes after other students receive their financial aid packages. Additionally, states and higher education institutions may have earlier submission deadlines for financial aid than the federal government.

What exactly is FAFSA?

FAFSA is the financial aid application that families fill out for monetary support to attend accredited four-year colleges and universities, two-year community colleges, vocational schools, certificate programs, and graduate schools.

However, FAFSA is not just used by the federal government to determine a financial aid offer. Other organizations—like states in which the applicant lives, the universities and colleges to which the student has applied, and other private organizations—also use the information found on FAFSA to determine institutional grants or loans to offer students. Therefore, it is in your family’s best interest to apply for FAFSA to receive federal financial aid as well as additional avenues for student aid.

For an estimate of what amount of financial aid your student may receive, use the same information from the FAFSA form to complete the Federal Student Aid Estimator. On the FAFSA, you submitted what your incomes and assets are as well as your student’s. This information is added to a formula to determine the Expected Family Contribution (EFC). The EFC represents what a family can expect to cover for higher education expenses. The difference between the total cost of enrollment and the EFC represents the remaining amount that may subsidized through federal student aid, based on need. Again, with this tool, your family will receive an estimate of what your EFC might be as well as your aid eligibility.

How Are 529 Funds Used For FAFSA

When filling in the Free Application for Federal Student Aid (FAFSA) form, your 529 account is considered an asset to determine the EFC. Current federal guidelines state that when a 529 account is owned by parent, the 529 plan funds are assessed at a maximum of 5.64% of its value. Therefore, if you, as a parent, have saved $10,000 in Ohio’s 529 Plan account, only $564 would counted against your child’s potential eligibility for need-based federal financial aid.

What’s considered federal financial aid?

After submitting your FAFSA, your child will receive award letters from the schools that they listed on the application. Each letter will break down the amount of federal and non-federal financial aid the student will receive from their elected school.

Federal student aid is available in different forms. Need-based federal financial aid typically is offered in as  grants, scholarships, work-study, or loans. Before you accept any aid, make sure you understand the financial commitments that come with each of them. For instance, a Pell Grant does not have to be repaid; however, a federally subsidized student or parental loans must be repaid and with interest. 

Earlier submission date

in 2015, the federal government moved the start date for FAFSA submissions to Oct. 1 of the year prior to the next school year. This aligns the financial aid application process with that of college applications. Now students who are heading off for their higher education can find out how much federal financial aid they may receive around the same time their acceptance letters arrive. Armed with this information, you and your child can better determine what schools may offer the best financial fit. 

By knowing how much federal monetary assistance you may receive, you can best estimate your child’s  qualified higher education expenses and so manage your 529 account savings.

How to fill out FAFSA

In order to start the process to receive financial aid, first visit Studentaid.gov. The website will take you step-by-step through the process. The first thing to do is create an account with a Federal Student Aid ID (FSA ID). You will use this same number each year you apply for financial aid. Once you have your FSA ID, then follow the guidance from StudentAid.gov to complete the application, including what documents you will need to have on hand to fil out the application. One of the recent developments to simplify the FAFSA application is to automatically transfer your tax information to the form through the IRS Data Retrieval Tool (DRT). DRT electronically imports your accurate IRS information to the FAFSA form. This can reduce the amount of errors entered on the application as well as reduce the time needed to complete the form. DRT will also help colleges and universities to speed up their approval process as there will be less need to authenticate the supplied financial information.

Once you’ve reviewed that the information on FAFSA is correct, you will need to sign then submit the form. If you discover later that there is some data that needs to be updated on the FAFSA, this page will guide you on how to make those corrections.

Then you wait to receive the awards letters from your selected schools. Make sure you understand what is being offered as financial aid in the letters, and what is being offered, especially loans. Your student aid letter will include how to get in touch with the school to accept their offer. Don’t forget, you can contact the school’s financial aid office to appeal their offer and request additional funding.

Visit Ohio’s 529 Plan online to start saving today for your child’s future education with as little as $25. A 529 account can be used for whatever school comes after high school—including four-year colleges and universities, community colleges, tech, trade or vocational schools, apprenticeships and certificate programs. Learn, plan, and start with Ohio’s 529 Plan today at CollegeAdvantage.com.

Posted on October 24, 2022

Ohio Tuition Trust Authority

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