FAFSA and FSA ID Tips for Parents


FSA ID Video

Understanding the Award Letter

Financial Aid Award Worksheet

The FAFSA Process


A: If you don’t fill out the FAFSA form, you could be missing out on a lot of financial aid! We’ve heard a number of reasons students think they shouldn’t complete the FAFSA form. Here are a few:

  • “I (or my parents) make too much money, so I won’t qualify for aid.”
  • “Only students with good grades get financial aid.”
  • “The FAFSA form is too hard to fill out.”
  • “I’m too old to qualify for financial aid.”

If you think any of these statements apply to you, then you should read Myths About Financial Aid. The reality is, EVERYONE who's getting ready to go to college or career school should fill out the FAFSA form!

Financial Aid Award Letters

Students will only receive an award letter once they have been accepted to a college and have submitted the required financial aid form(s). This letter, or financial aid package, is the official offer of financial aid from the college. The financial aid package may include different sources of aid to help you and your family meets the gap between your Expected Family Contribution (EFC) and the actual college cost.

Financial aid award letters look different at each college. Many create their own template that works best for their school. Some colleges include their estimated cost of attendance, or how much a student will potentially need for one year of college (including billable costs such as tuition, fees, and room and board if living on campus, as well as non-billable costs, such as transportation, books, supplies, etc.) right on their financial aid award letter, while others do not.

Some financial aid award letters will break down the amount of free money offered (grants and scholarships) separately from loan options (Federal Direct Loans and Federal Perkins Loans) and may include information such as net costs (a college’s cost of attendance minus the total amount of grants and scholarships awarded). The financial aid award letter(s) you receive from your college(s), may look different, so it is important to understand the various components listed on yours.

Since college financial aid award letters will differ in appearance from college to college, review the letters carefully to determine your family’s true out-of-pocket costs (cost of the college less grants and scholarships) at each college. Keep in mind that any Federal Direct Loans and Perkins Loans will need to be repaid, so while they are excellent loan options, they must be included in the total cost of the college. Use a worksheet like this one to help you conduct a side-by-side comparison of your college financial aid offers. Consumer Finance also offers a very useful website that helps families compare college costs and calculate possible loan payments based on the amount borrowed.

FAFSA Tips

To begin filing the FAFSA, go to fafsa.gov. The FAFSA is always filed from the perspective of the student, so keep in mind when it says “you,” it means “you, the student.”

At the beginning of the application, the student will be asked to create a Save Key. This is a temporary password that lets you return to a partially completed FAFSA. If you and your child are accessing his or her FAFSA from different locations, your child should do his or her part and then share the Save Key with you. You’ll need to enter it to get access to your child’s FAFSA.

The FAFSA requires federal tax information for both the parent(s) and student. See below for a chart that illustrates which tax year information is required on the FAFSA based on the academic year.

When a Student Is Attending College (School Year) When a Student Can Submit a FAFSA Which Year’s Income and Tax Information Is Required
July 1, 2018–June 30, 2019 October 1, 2017–June 30, 2018 2016
July 1, 2019–June 30, 2020 October 1, 2018–June 30, 2019 2017

Note: If your family circumstances have changed since the year reported on your FAFSA, i.e. large change in income, marital status change, parent separation, large medical bill debt, etc., contact the college’s financial aid office and share that information with them. Each college may have their own process and guidelines, so contact each one directly.

The FAFSA allows for 10 school choices at a time. You will be asked to note if the student will be living on-campus, off-campus, or with a parent.

If you have more than 10 schools to list, submit the FAFSA with the first 10 schools. Once the FAFSA is processed, which takes about 3-5 days, you can go back into your FAFSA, remove the original 10 schools, and add the remaining schools and submit.

When reporting parent information, it is important to include information from the parent that the student lived with 51% of the time. Parents must indicate the month and year they were married/remarried or divorced/separated. If the custodial parent is remarried, then all income and asset information from the current spouse must also be included. It is important to note that filing the FAFSA as a parent does not obligate a parent to pay, but does assure your student will qualify for federal student aid.

Be sure you or your child sees the confirmation page pop up on the screen so you’ll know the FAFSA has been submitted. Read the FAFSA confirmation page carefully. There are a few differences between the e-mailed confirmation (which arrives later) and the one you see at the end of the application, so consider printing or saving the confirmation page before you exit. If you have more than one child attending college, select the option on the confirmation page to transfer your parent information into the other child’s FAFSA.

Financial Aid FAQs

A: Yes. Many families mistakenly think they don't qualify for aid and prevent themselves from receiving financial aid by failing to apply for it. In addition, there are a few sources of aid such as unsubsidized federal student loans and PLUS loans that are available regardless of need but require that you have completed the FAFSA to be eligible to receive. The FAFSA form is free. There is no good excuse for not applying. College counselors at NHHEAF will help you file FAFSA for free. Just call 888.747.2382 x119.

A: No. You can apply for financial aid any time after October 1 for the following academic year. You need to be admitted before the school will put together a package for you and to actually receive funds you must be admitted and enrolled at the university.

A: Yes. If you are receiving any kind of financial aid from university or government sources, you must report the scholarship to the financial aid office. Unfortunately, the university may adjust your financial aid package to compensate. Nevertheless, the outside scholarship will have some beneficial effects. At some universities outside scholarships are used to reduce the self-help level. At other universities, outside scholarships are used to replace loans instead of grants. To be certain about how outside scholarships might affect your financial aid award, it is advisable to research the financial aid policies of the schools to which you are applying (policies can usually be found on the school’s Web site under “Financial Aid”) or you can call or e-mail their financial aid offices.

A: The money you earn from Federal Work-Study is generally subject to federal and state income tax, but exempt from FICA taxes (provided you are enrolled full time and work less than half-time). Federal Work-Study earnings during the calendar year should be included in the totals for AGI and Additional Financial Information on the FAFSA. Work-study earnings should only be included in the Additional Financial Information section when they represent financial aid to the student, since the answer to this question is used as an exclusion from taxed income. The student should also be careful to report amounts based on the calendar year, not the school year.

A: If your parents are separated or divorced, the custodial parent is responsible for filling out the FAFSA. The custodial parent is the parent with whom you lived the most during the past 12 months. (The twelve-month period is the twelve-month period ending on the FAFSA application date, not the previous calendar year). For determining household size (the number of family members), the same criterion above applies to all children (under the age of 24).

A: Capitalization of interest is when the interest that accumulates on a loan is added to the outstanding principal balance, increasing the total principal balance. (Example: interest that accrues during a forbearance that is added to the loan prior to entering repayment).

A: If a parent is denied a PLUS loan, the student/family may consider other options. A different parent may apply for a PLUS loan, the parent may get an endorser or, more typically, the school may certify additional Direct loan money for the student ($4000 for freshman/sophomore years; $5000 for junior/senior years).

Securing Your Loans: Entrance Counseling and the Master Promissory Note


Okay, you’ve completed all your admissions requirements and completed your free application for federal student aid (FAFSA). Your college of choice received all this information, accepted you, and used your FAFSA (and maybe a few other financial forms as well) to determine what your total financial aid package for one year of school would be.

Because you completed your FAFSA, you were initially offered a Direct/Stafford loans from the federal government and it’s possible you were later offered a federal Perkins loan as well. However, before your federal loans can be dispersed to your school to pay for part of your tuition, fees, room, and board, you will need to do what’s called entrance counseling and then sign a Master Promissory Note (MPN). Your school will typically notify you by e-mail or by way of a message on your student account on the college website to complete these final two tasks. You will be prompted to go to studentloans.gov and there on the left side menu you will see links for completing both of these tasks. Have your FSA ID handy because you will use this ID to sign into the site for entrance counseling and you will use it to sign your MPN.

Entrance counseling is a bit like a short quiz designed to make you understand your rights and responsibilities as a loan borrower (don’t worry, it’s not a difficult “quiz” by any means; it is very self-explanatory). Basically, you will be asked to read a little on various loan topics including:

  • Understanding Your Loans
  • Managing Your Spending
  • Planning to Repay
  • Avoiding Default
  • Making Finances a Priority

And you will answer questions about these topics in order to gauge your own competency with them.

To complete entrance counseling as an undergraduate student or graduate/professional student, you will need:

  • 20-30 minutes to complete
  • Your FSA ID
  • Name(s) of the school(s) you wish to notify of counseling completion

Useful Information to Have:

Any details on your income, financial aid, and living expenses. Some of this information can be found in:

  • Your student account information
  • A copy of the award letter from your school’s financial aid office (if you have received it)
  • A listing of the tuition and fees for your school. Visit CollegeNavigator.gov

How to Access Entrance Counseling:

Sign in to studentloans.gov using your FSA ID

  • Select “Complete Counseling” on the left-hand navigation bar
  • Select “Entrance Counseling” under “Choose Counseling Type”

If you sign in, you will be able to:

  • See your federal student loan information available in the National Student Loan Data System (NSLDS)
  • Notify schools of counseling completion
  • View proof of counseling completion

Parents borrowing a Direct Plus loan to pay for their child’s education are not required to complete entrance counseling.

Helpful Link: Entrance Counseling FAQ

The MPN needs to be signed before your loans can be dispersed to your school. You will put in some personal info, provide some references, and sign with your FSA ID. You may only need to sign the MPN once to cover all your federal loans for all four years of your undergraduate career, unless you change schools.

Students who need to complete a Master Promissory Note (MPN) will need:

  1. Approximately 30 minutes to complete
    • MPN must be completed in a single session
  2. Your FSA ID
    • Students must sign in using their own FSA ID.
  3. Personal Information
    • Permanent Address
    • Mailing Address (if different from permanent address)
    • Telephone Number
    • Email Address
  4. Employer Information
    • Employer Name
    • Employer Address
  5. School Name
  6. Reference Information for two people with different U.S. addresses who have known you for at least 3 years. The first reference should be a parent or a legal guardian.
    • Name of each reference
    • Address of each reference
    • Email address for each reference
    • Telephone number of each reference
    • Relationship of each reference to the student

If you have previously completed either a Direct Loan MPN or a Direct PLUS Loan Request, some of this information may be populated for you. You should review all populated information carefully for accuracy.

Helpful Link: Master Promissory Note FAQ

Top Questions for Your Financial Aid Office

  1. Each college lists a cost of attendance on their website, which includes tuition, fees, and some other expenses. However, you may want to ask financial aid if there are any costs not accounted for in the cost of attendance (for example, some majors may require extra materials/books).
  2. What are the terms/conditions of the aid package (i.e., treatment of outside scholarships, loan repayment policies, renewal criteria, etc.)?
  3. How will my aid package change from year to year? Will loan amounts increase? What impact will cost increases have on the aid package? What will happen if my financial situation changes? Are my scholarships valid for four years?
  4. If the financial aid award package is insufficient for me to attend the desired institution, under what conditions, if any, will the financial aid office adjust the aid package?
  5. When can my family expect to receive college bills? How many times a year will I be billed? Is a tuition payment plan available?
  6. Is all the financial aid credited to my account, or will I receive checks for some or all of the financial aid awarded? What about my student employment earnings?
  7. How are work study jobs assigned? How many hours per week will I be expected or allowed to work?
  8. How much money should I have for the first week of college to cover costs of my books, parking registration, phone and cable set-up, etc.? (Much of this money is due before the student receives his/her first work-study paycheck.)
  9. Is there a financial institution or bank with fee-free ATMs and/or check cashing on or near campus?
  10. Ask your student loan provider(s): Do you offer life-of-loan servicing, or will the loan be sold during repayment? Do you offer a fixed or variable interest rate? When do I have to start paying on the loan? Do you offer a co-borrower release program? Do you offer a discount if I pay automatically?

FSA IDs


An FSA ID is a username and password that you must use to log in to certain U.S. Department of Education (ED) websites. Your FSA ID identifies you as someone who has the right to access your own personal information on ED websites such as the Free Application for Federal Student Aid (FAFSA®) site at fafsa.gov.

Students:
You’ll need one in order to electronically sign your FAFSA form and to fill out a Renewal FAFSA form.

Borrowers:
You’ll need one to electronically sign a Master Promissory Note, complete entrance and exit counseling, apply for an income-driven repayment plan, and more.

Parents:
A dependent student will need to have one of his or her legal parents sign the student’s FAFSA form, so the parent needs an FSA ID as well. Parents also need one to apply for a Direct PLUS Loan on StudentLoans.gov.

It is important to understand that the student and the parent may not share an FSA ID: Your FSA ID is your signature, so it has to be unique to you.

FSA ID

You can create an FSA ID when logging into certain ED websites, including this one. Create an FSA ID now.

The FSA ID process consists of three main steps. The first is your log-in information. This consists of your: email address, unique username, and a password. You’ll then follow that up by entering in all of your personal information (ie.name, date of birth, Social Security Number (SSN), mailing address, phone number, and challenge questions/answers.)

Your username does not expire, but your FSA ID password will expire every 18 months unless you change it. If your FSA ID password is expired when trying to log in, you’ll be prompted to create one before logging into your FAFSA form.

If you’ve forgotten your username or password, don’t worry; on most log-in pages, you’ll find links that say something like “Forgot My Username” and “Forgot My Password” so you can start the process of recovering your information.

Important: To retrieve your username or password, you’ll either need to have a code sent to your mobile phone or your email address, or you’ll need to answer your challenge questions. If you haven’t provided and verified your mobile phone number or email address in your FSA ID account, and you can’t remember the answers to your challenge questions, you will have to contact the Federal Student Aid Information Center by calling 1-800-4-FED-AID (1-800-433-3243). If that does not resolve the situation, you will go through the FSA ID “verification” process. You’ll send in copies of identification, and the email address on your account will reset to one you can access. This process takes 7–10 days from the point at which you send in your documentation.

Data Retrieval Tool


The IRS Data Retrieval Tool (IRS DRT) electronically transfers your Federal Tax Return information into your FAFSA form.

Transfer Tax Info graphic

The IRS DRT is:

  • EASY: Transfer info with the click of a button.
  • FAST: Instantly retrieve your information.
  • ACCURATE: Correctly fill in your information.
  1. Log in to your current FAFSA form or start a new application at fafsa.gov
  2. In the finances section of the online form, you will see a “Link to IRS” button if you are eligible to use the IRS DRT.
  3. Click the “Link to IRS” button and log in with your FSA ID to be transferred to the IRS to retrieve your info.
  4. Once at the IRS site, enter your information exactly as it appears on your federal income tax return and click the “Submit” button.
  5. Check the “Transfer My Tax Information into the FAFSA form” box, and click the “Transfer Now” button.
  6. You will know that your federal tax return information has been successfully transferred because the words “Transferred from the IRS” will display in place of the IRS information in your FAFSA form.

When filing the FAFSA, it is easiest to retrieve federal tax data by using the online IRS Data Retrieval Tool to transfer your tax data into the FAFSA. If this is not possible, enter the data from your tax form, and you may be asked by the Financial Aid Office at a college to update your information at a later date by using the IRS Data Retrieval Tool or by sending the college or university an IRS Tax Return Transcript.

You can order the Tax Transcript in three ways: order online through the IRS and authenticate yourself using the Secure Access process, complete the 4506-T form found on irs.gov, or request by phone at 800-908-9946. The IRS will mail only one copy of the Tax Return Transcript to you, so if you are sending it to multiple colleges, you will need to photocopy the transcript and keep your original copy.

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