Filling Out the FAFSA: Your Guide

Here's How to Maximize Federal Financial Aid

Oct 23, 2024

Parents and students can now start filling out the federal government's Free Application for Federal Student Aid (FAFSA) in beta mode. It will be more widely available on December 1. For students applying to colleges that require it, the College Board's CSS/Profile form has been available as of October 1.

Colleges award financial aid and scholarships based on the information parents and students put into these forms, so students and parents must fill them out.

This article focuses on what you need to know about filling out the FAFSA. For information on filling out the CSS/Profile, please read the companion piece.

According to research by the National College Attainment Network, over 50% of students didn't fill out the FAFSA last year. The most common reasons are that students (and parents) believe, incorrectly in many cases, that:

They can afford college without financial aid.
They're ineligible or may not qualify for financial assistance.
They're reluctant to take on debt.
They need more information about how to complete a FAFSA.

The reality? College is costly, so getting assistance matters. Some colleges cost as much as $$400,000 for a four-year degree. The average student pays between $80,000 and $130,000 for a four-year college education. Many students will qualify for assistance, so filling out financial aid forms is crucial.

Some students decide not to seek financial aid at specific colleges. At need-blind colleges, that decision makes no difference to the admission decision. At need-aware colleges, forgoing financial aid can improve your chances of admission. Of course, it means you're also giving up on need-based and possibly even merit-based aid.

This link provides a list of need-blind colleges, but please verify the policies of individual institutions.

LifeLaunchr Webinar on Maximizing Financial Aid: Filling Out the FAFSA

LifeLaunchr's webinar on maximizing your financial aid is an excellent resource before you fill out the FAFSA. It will explain how the financial aid system works and how you can maximize your aid legally by filling out the form correctly. Sign up to watch it at this link. Sign up even if you can't attend live: all registrants will receive a recorded replay.

Who Should Fill Out the FAFSA?

The FAFSA is for students who are U.S. citizens or permanent residents with social security numbers. International students (with or without visas) are only eligible if they are permanent residents of the United States (green card holders). Parent citizenship or visa status doesn't matter.

What's New in 2024

The 2025-26 FAFSA (for students attending college in the 2025-26 academic year) involves several changes from the FAFSA that pre-dates 2023:

Simplification: The FAFSA now asks at most 36 questions instead of 108.
Different rules about contributors: The FAFSA will now have to be started by the student, who will then invite their parents or step-parents to be contributors to the FAFSA. Every invited contributor must provide their information.
New rules about assets: Families must now report the value of small businesses and family farms in many more cases.
Updated needs-analysis formula: The new FAFSA replaces the concept of the "Expected Family Contribution" with a new term: the "Student Aid Index." The new FAFSA calculates the SAI with an updated formula.
New rules for families with multiple children in college: The new calculation no longer offers benefits for families with more than one student in college simultaneously.
Expanded use of direct import from the IRS: More people will import data directly from their tax returns instead of reporting income information on the FAFSA.
Expanded use of professional judgment: It expands the ability of aid administrators at colleges to process "special circumstances" or "unusual circumstances" claims and use professional judgment to alter a student's SAI or dependent status. It allows some students with unusual circumstances to be treated as independent, increasing their aid eligibility.

FAFSA Demonstration Videos

To get detailed instructions on filling out the FAFSA, use the Department of Education's YouTube channel, which offers videos explaining each step of the process.

Determining your Student Aid Index

The result of filling out the FAFSA is the Student Aid Index, which colleges use to calculate student aid offers. The Student Aid Index replaces the Expected Family Contribution, which colleges use to estimate how much a family should be able to afford to pay for college.

Not all colleges will award enough aid to make up the difference between their cost of attendance and the SAI, and the SAI may not represent the actual amount a family can afford. We recommend students and families fill out the net price calculators for each college. The links are in the "Costs and Aid" section of LifeLaunchr's college profiles.

Start by Getting FSA IDs for both Students and Parents

A Federal Student Aid (FSA) ID is a username and password. Depending on the student's status, either the student or both the student and the parent need an FSA ID to connect their FAFSA to their social security number and taxes. Getting one is easy, so do it right away. You can do it at this link; instructions are on the Department of Education's website.

Get Your Tax Returns and Financial Records Ready

The FAFSA and the CSS/Profile use the "prior-prior" year's tax returns. That means that to fill out the FAFSA for the academic year 2025-26, you need the parents' and student's tax returns for 2023. The new FAFSA requires nearly all students and parents to consent to retrieving their data directly from the IRS.

Other Records

Student and parent social security numbers. In rare cases, students without social security can receive federal aid. Click here for more information.
Students whose parents are undocumented: Remember, only the student's immigration status or citizenship determines aid eligibility, so the parent's citizenship status isn't relevant. The FAFSA doesn't ask about the parent's immigration status (NOTE: According to the American Civil Liberties Union of Northern California, there is still "some risk" in providing undocumented parent information on the FAFSA because although "immigration enforcement authorities have never requested student FAFSA information in the past, … that could change in the future.”): Click here for the Department of Education's guidance.
Parents without social security numbers should enter "000-00-0000" in the field that asks for it.
Americans without Social Security Numbers: You should apply for an SSN early to have one in time.
Records of untaxed income you received, such as child support you received, and of income you can exclude, such as combat pay, taxable scholarships, and child support you paid.
Asset Information, such as bank and investment account balances, your home's value, and the values of farms and business assets. Value these as of the date you file the FAFSA. Please print and keep the records based on which you entered the data in case you have to verify them.

Filling out the FAFSA

To fill out the FAFSA, visit https://studentaid.ed.gov/sa/fafsa and follow the instructions. It's relatively easy for most people. The FAFSA for 2025-26 is open now in beta. It opens generally on December 1, 2024

When the form is available, the Department of Education will provide detailed instructions here.

Please note:

You can only add 20 universities to the FAFSA at one time. To send your FAFSA to more colleges, submit the FAFSA with 20 colleges, then wait a few days for a confirmation email. You can then edit the FAFSA to remove the first 20 colleges, add the others, and resubmit it.
For college systems like the University of California, California State University, or the University of Texas systems, please send the FAFSA individually to each college you're applying to.

Special Situations

There are a variety of situations that make the process more complex:

Divorced or separated parents: The new FAFSA only treats divorced or legally separated parents as separated parents. The old FAFSA allowed informally separated parents to file the FAFSA with only one parent's information. And now, for divorced or separated parents, the parent who provides more financial support is required to report the information on the FAFSA.
Special or Unusual Circumstances, like a parent losing their job, unusual medical expenses, or abandoned children. These allow or require financial aid administrators to exercise professional judgment or change their dependency situation.

Sheltering Assets to Minimize the Student Aid Index

You don't have to report all assets on the FAFSA. So, some families with significant investments can use strategies to shelter assets. For example, you don't have to provide:

The value of your primary home
The value of retirement accounts
The value of 529 accounts designated for other students (e.g., the applicant's siblings)

For some families, moving assets into a bigger home and borrowing against that asset to pay for college can be beneficial.

The CSS/Profile requires information about many of those assets, so if you're applying to colleges that also require that form, these approaches may not work.

How Colleges Determine Your Financial Aid

Colleges offer many kinds of aid:

Federal Financial Aid: The FAFSA determines eligibility for Federal Aid programs such as the Pell Grant, Federal Work-Study, and Subsidized Loans. Each year, the Department of Education awards students about $150 billion in aid. It also determines eligibility for programs such as veterans' or servicemembers' benefits.

State Grants: Many states also offer residents financial aid through programs such as California's CalGrant program. Qualifying for many of these programs requires filing a FAFSA.
College Financial Aid: The FAFSA doesn't determine how much additional financial aid any college will offer you. Each college makes that determination on its own, using different criteria. To understand what assistance you might receive, fill out the college's net price calculator, which you can find on most college websites. Remember, many colleges require you to fill out the FAFSA for students to be considered for merit scholarships.

Some colleges also require you to fill out the CSS/Profile. For those colleges, read the companion piece on LifeLaunchr's blog.