FAFSA and Your Taxes

FAFSA and Your Taxes

In order to apply for any federal student aid {grants, work study, loans} Free Application for Federal Student Aid must be completed. Many states and colleges use this information to determine eligibility for state and school aid.

It is the single most important thing you can do to get assistance paying for college. Every year, the federal government awards about $150 billion in the form of grants, work study funds, and low-interest loans to help millions of students pay for college.

You need to complete FAFSA every year that you plan to attend college or career school.

NEW: Deadlines for filing

For school year 2017-2018, you can submit your application as early as October 1, 2016. This early submission deadline is a permanent change, enabling students to complete and submit FAFSA as early as October 1 every year. With this new change, you will also be using an earlier tax year return. For 2017-2018, you will use your 2015 Tax Return.

There are THREE major deadlines for you to keep in mind: state, federal and college. For MN, the deadline is 30 days after term starts for 2107-2018 school year. For federal, the deadline is June 30th for 2017-2018 school year. Each college has a different timeline for awarding financial aid – check with your specific institution for more details.

What is IRS Data Retrieval Tool?

The IRS DRT allows students and parents, who have already filed their federal tax return, to access the IRS tax return information needed to complete the FAFSA, and transfer the data directly into their FAFSA from the IRS Web site.

This feature, although convenient, is limited. Applicants must have a valid SSN and Financial Student Aid ID in order to use this tool. Students and parents must use the tool separately for their respective income tax returns. The tool will only transfer data from original tax return, not amended returns and not foreign tax returns. Not all applicants will be able to use this feature: if the marital status of student/parent is “Unmarried but both parents living together”, or depending on the filing status of student/parent: Married Filing Separately or Head of Household.

If you elect to use this tool, you will leave the FAFSA website and be transferred to the IRS website where you will answer questions in order to authenticate yourself.

I Need Help… Who Can I call?

Have questions while filling out FAFSA or before you even begin? Some colleges offer assistance with FAFSA or you can visit the FAFSA website for further guidance or more information. www.FAFSA.ed.gov

  • Email questions by clicking the HELP button, then the CONTACT US tab.
  • Live Chat with a FAFSA Representative
  • Call 1.800.433.3243 during their regular business hours

Common FAFSA Misconceptions

MYTH: I need to file taxes before completing FAFSA.

FACT: New! You can now use the prior year’s tax return to complete FAFSA. This means your 2015 tax return will be used for school year 2017-2018; 2016 tax return will be used for 2018-2019 school year. There is no wait for tax returns now to submit your FAFSA!

MYTH: I (or my parents) make too much money so I won’t qualify for aid.

FACT: There is no income cut-off to qualify for federal student aid. Many factors besides income—from the size of your family to the age of your older parent—are taken into account. Your eligibility is determined by a mathematical formula, not by your parents’ income alone. And remember: when you fill out the FAFSA, you’re also automatically applying for funds from your state, and possibly from your school as well. In fact, some schools won’t even consider you for any of their scholarships (including academic scholarships) until you’ve submitted a FAFSA.

MYTH: The form is too hard to fill out.

FACT:This is a very common misconception, but the FAFSA has come a long way! It’s easier than ever to complete online. The form uses “skip logic,” so you are only asked the questions that are relevant to you. And if you’ve filed your taxes, you can IRS Data Retrieval Tool. As a result of improvements like these, the average time to complete the FAFSA is now less than 21 minutes. If you do get stuck, help is available by Web chat, e-mail and phone.

MYTH: I support myself, so I don’t have to include my parent’s information on my FAFSA.

FACT: Not necessarily true. You may support yourself and file taxes on your own and still be considered a dependent student for federal student aid purposes. Factors they consider: age, degree you are working towards, marital status, if you have children or dependents that live with you, if you are on active duty in the military, or a veteran of U.S. Armed Forces.

MYTH: Only students with good grades get financial aid.

FACT: While a high GPA may help get you into a good school or qualify you for academic scholarships, most federal student aid programs do not consider GPAs.

MYTH: I’ve done the FAFSA once so I am good to go!

FACT: FAFSA needs to be completed every year that you plan to attend college or a career school. The good news is that it gets easier each subsequent year, though. The system will pre-populate a lot of your information right onto the application after the first year.

MYTH: I can share a Financial Student Aid ID with my parent(s).

FACT: Each person signing the FAFSA will need their unique FSA ID. If you are a dependent student, then 2 people will need their own FSA ID: student and one parent. As a parent, if you have more than one kid completing a FAFSA, you can use your same FSA ID on each application.