You may be aware the FAFSA has a formula set by federal guidelines, which includes many factors, and certainly not least of all are parents’ and students’ Adjusted Gross Incomes.
A family’s income plays a large part in the financial aid process, and most importantly, when determining a student’s EFC (Expected Family Contribution). For most colleges and universities, this is first determined by submitting a FAFSA with your latest taxes and incomes.
But what you probably didn’t know is that parents should be careful to separate their individual incomes (wages, and other) as specified, as this actually works in your favor. Also, a large portion, if not all, of a student’s income may not even contribute to a family’s EFC, so it won’t hurt your EFC to report it (besides, it is required!)
What to do if tax documents haven’t been filed? If you haven’t filed your most recent taxes yet, you can consider submitting a FAFSA with estimated tax and income values. Many families don’t have their taxes filed until the extended October 15th deadline, but may find they want to submit a FAFSA around that same time.
The FAFSA tax-tool (IRS DRT) won’t be available to those families until several weeks afterward so it may be in your best interest to submit a FAFSA sooner, with some estimated information, especially for students with early deadlines. That way, colleges can still receive and review FAFSA information, but request to see filed tax information once it becomes available.
And what about those families who have filed last year’s taxes, but it doesn’t give an accurate representation of the family’s income? I will be covering this and related topics in upcoming posts, so keep checking back for more updates.
Until Next Time,
Hope Santos, PES Financial Aid Consultant
P.S. The financial aid process can be confusing and mistakes can be costly. If you’re looking for help with the FAFSA or just don’t want to do it, we are happy to help! Having us help with the FAFSA is kinda like hiring a CPA to do your taxes, sure you can do it on your own, but do you really want to? If you’d like us to help simply click here to get started!