8 FAFSA mistakes that will costs you money


The 2020–21 FAFSA® application form became be available October 1! If your student plans on attending college between July 1, 2020, and June 30, 2021, you should fill out your FAFSA form as soon as possible!

Just make sure you don’t make one of these 8 common mistakes:

1. Not Completing the FAFSA Form

We hear all kinds of reasons: “The FAFSA form is too hard.” “It takes too long to complete.” “I’ll never qualify anyway, so why does it matter?” It does matter. For one, contrary to popular belief, there is no income “cut-off” when it comes to college aid. Also, the FAFSA form is not just the application for “free money” such as the Federal Pell Grant, it’s also the application for scholarships and grants offered by your state, the school, and even private organizations. If you don’t complete the FAFSA form, you could lose out on thousands of dollars to help you pay for college.

2. Not Filling Out the FAFSA Form as Soon as Possible

If you want to get the most financial aid possible, fill out the FAFSA form ASAP. Some financial aid is awarded on a first-come, first served basis, and some states and colleges run out of money early. Even if it seems like your school’s admissions deadline is far off in the future, get your FAFSA form done ASAP. The 2020–21 FAFSA form requires 2018 tax information, which you should already have -so there’s no excuse to wait!

3. Not Getting an FSA ID Before Filling Out the FAFSA Form

It’s important to get an FSA ID before filling out the FAFSA form. Why? Well, because when you register for an FSA ID, you may need to wait up to three days before you can use it to sign your FAFSA form electronically. An FSA ID is a username and password that you use to log in to certain U.S. Department of Education websites, including fafsa.gov. You AND your parent (if you’re considered a dependent student) will each need your own, separate FSA IDs if you both want to sign your FAFSA form online. Don’t wait! Create an FSA ID now: StudentAid.gov/fsaid.

4. Not Using the IRS Data Retrieval Tool (IRS DRT)

For many applicants, the most difficult part about filling out the FAFSA form is entering the financial information. But thanks to a partnership with the IRS, students, and parents who are eligible can automatically transfer their necessary 2018 tax information into the 2020–21 FAFSA form using the IRS DRT. It’s the fastest, most accurate way to enter your tax return information into the FAFSA form, so if you’re given the option to “LINK TO IRS” button, take advantage of it!

5. Not Reading Definitions Carefully

When it comes to completing the FAFSA form, you’ll want to read each question carefully; sometimes the FAFSA form is looking for very specific information that may not be obvious. Here are some items that have very specific (but not necessarily intuitive) definitions according to the FAFSA:

Legal Guardianship

To determine your dependency status, the FAFSA form asks, “Does someone other than your parent or stepparent have legal guardianship of you, as determined by a court in your state of legal residence?” Many students incorrectly answer “yes” here. For this question, the definition of legal guardianship does not include your parents—even if they were appointed by a court to be your guardians. Also, you cannot be your own legal guardian.


The FAFSA form has very specific guidelines about which parent’s information needs to be reported. It has nothing to do with who claims you on their taxes. On the FAFSA application, you may be asked, “As of today, what is the marital status of your parents?” Use this guide to help you figure out which parent to report on the FAFSA form.

Number of Family Members (household Size)

The FAFSA form has a specific definition of how your household size or your parents’ household size should be determined. Read the instructions carefully. Many students incorrectly report this number, especially when the student doesn’t physically live with the parent.

Number of Family Members in College

Enter the number of people in your (or your parents’) household who will attend college at the same time as you. Don’t forget to include yourself, but don’t include your parents in this number, even if they’re in college. This number should never be greater than the number of family members in your household.

6. Listing only one college

Unless you are applying to only one college or already know where you’re going to school, you should include more than one. Colleges can’t see the other schools you’ve added, so you should add ALL colleges you are considering to your FAFSA form, even if you aren’t sure whether you’ll apply or be accepted. You can add up to 10 schools at a time. If you’re applying to more than 10 schools, follow these steps.

It doesn’t hurt your application to add more schools. In fact, you don’t even have to remove schools you later decide not to apply to. If you don’t end up applying or getting accepted to a school, the school can just disregard your FAFSA form. But you can remove schools at any time to make room for new schools.

7. Not knowing your EFC (Expected Family Contribution) before you file the form

Unless you have had a professional review your financial situation, you cannot assume that filing the FAFSA is not to your benefit.  Every October, we receive many calls from people asking about FAFSA and claiming they know they aren’t eligible for aid and want to know why they should file.  Over 50% of the people on those calls, are actually eligible for need based aid, another 20% tend to be eligible in the future because they will have multiple students in college at the same time.  Assumptions cost people tons of money every year.

8. Not getting help with your college funding plan before filing FAFSA

Families assume they know how they are going to fund college but the truth is many people do not have the proper knowledge and/or their financial advisors are not skilled with building a proper plan.  Understanding the true 4-year cost before you apply is the smart move.  Think about it, if you were going to buy a home, wouldn’t you know what you could afford?  Off course and there is no bank in the world that would lend you more..  However, you can get a loan for almost any amount to pay college.  No wonder college loan debt is over 1.5 trillion dollars…yes, trillion.  Please don’t be another statistic…know before you go.

As you can see, making mistakes on the FAFSA form can cost you money. If you need assistance completing your FAFSA or CSS PROFILE financial aid application form, give us a call.  We may be able to save you considerable money and help you avoid strategic mistakes on these complex application forms.

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About the author 

Stuart Canzeri

Stuart Canzeri is a well-respected professional in the world of college funding and financial planning. He's known as the "College Financial Guy" on the internet, where he's helped countless families save significant money on college costs. With more than 20 years of experience in the field, he's become an expert in investment, tax planning, and overall financial management.

Stuart has a strong educational background, which includes a Bachelor of Arts degree from Tulane University, a Master of Business Administration degree from Mercer University, and a Certified Financial Planner certification from the University of Georgia. These credentials allow him to effectively work with a variety of clients, including business owners and corporate executives.


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