By Charlestien Harris, Retired Financial Coach at Southern Bancorp
Parents, it’s your turn now! I have already addressed high school graduates and college graduates this month, offering financial tips to follow after the graduation ceremony has ended. Now, it’s time for the parents of those graduates.
What is FAFSA, you might ask? The Free Application for Federal Student Aid (FAFSA) is the official form used by college students and their parents or guardians to apply for financial assistance, including federal grants, scholarships, work-study programs, and student loans. Paying for college can be a significant financial burden for many students and families, but completing a FAFSA application can help ease that burden.
Let’s take a look at what you, as a parent, can do to take advantage of financial assistance that may reduce the cost of sending your child to college.
What to Do
- Do create your own FSA ID.
The first step for parents is to create a separate FSA ID account. Parents need their own username and password, distinct from the student’s credentials. This allows you to access information, make updates, track transactions, and act as a “contributor” on your child’s FAFSA application.
- Do provide consent and approval for the IRS.
One of the most important pieces of information your student will need is your financial data. You must consent to the IRS transferring your tax information, or you may enter it manually. Even if you did not file taxes, this consent is still required to receive aid. If you are married or unmarried and living together, both parents must be included. If divorced, include the parent who provided the most financial support.
- Do provide accurate information.
Even a single incorrect digit or initial can delay or void the application process. Always use your legal name, Social Security number, and date of birth exactly as they appear on your Social Security card. As a counselor, I have seen firsthand how inaccurate information can become costly.
- Do provide an accurate assessment of your assets.
Reporting financial information on the FAFSA helps the federal government and colleges determine your family’s ability to pay for college and calculate eligibility for need-based aid. You do not need to include equity in your primary home, IRA, 401(k), or the cash value of life insurance in the “net worth of investments” section.
- Do watch for FAFSA workshops in your area.
Local, state, and national organizations frequently offer hands-on opportunities for parents and students to receive assistance completing the application, either in person or online. Sometimes we all need help with the task at hand, so don’t hesitate to ask.
What to Avoid
- Don’t use nicknames.
For security reasons, it is always best to use your official legal name to avoid identification issues and prevent fraudulent activity. Nicknames or familiar titles can be easier to guess and may be more widely known. Create usernames and passwords that are not easily accessible, and consider using multifactor authentication. It may take a few extra steps, but it adds an important layer of protection for you and your child’s sensitive information.
- Don’t wait.
These two words are critical in the process. File as early as possible to maximize eligibility, since some state and institutional aid is distributed on a first-come, first-served basis. The longer you wait, the greater the chance that available funds will be depleted.
- Don’t misunderstand how assets are reported.
Unless your student is considered independent and completing their own application, be careful when reporting assets. Review FAFSA guidelines to determine which assets are reportable and which are not. Parent assets are assessed at a lower rate (5.64%), while student assets are assessed at 20%.
Completing a FAFSA application doesn’t have to be complicated. There are plenty of resources available to help both students and parents through the process. Even if you believe you or your child may not qualify for need-based aid, filing the FAFSA is still recommended to ensure eligibility for all potential financial assistance.
For more information on this or other financial topics, you can email me at [email protected] or write to me at Post Office Box 1825, Clarksdale, Mississippi 38614.
Until next week – stay financially fit!
