More FAFSA updates, with news on availability and 529s.
Last week, the Department of Education finally announced when the FAFSA will be available: Dec. 31. There’s a twist, though: while the update says that “Students and families will be able to complete and submit FAFSA forms online by Dec. 31” it also says, “Schools will begin receiving aid eligibility information … by the end of January 2024.” So yes, the form will be available by Dec. 31, as required by statute, but schools won’t receive the information until about a month later.
Although common guidance is to file the FAFSA right away, that’s really only true for a subset of the population, specifically:
- Students who are eligible for state need-based funds that are allocated on a first-come, first-served basis
- Students applying to colleges with rolling admissions where aid awards favor earlier applicants.
Given that sitting in front of your computer waiting for the FAFSA website to load might not be your top priority on Dec. 31, if you don’t fall into either of those categories you should find out FAFSA deadlines for the colleges to which you’re applying and simply plan to submit your FAFSA sometime before the earliest deadline. Federal and institutional financial aid are both allocated by the colleges themselves and typically as part of the admissions process (for need-aware colleges) or following the admissions process (for need-blind colleges).
Something you can do while you wait: create FSA ID numbers for the student and parent, if you’ll be filing the FAFSA for the first time this year. Both students and parents must have FSA IDs to file the FAFSA. Just go to studentaid.gov and select “Create an Account.” Students and parents filing renewal FAFSAs will use their existing FSA IDs.
And since it’s Thanksgiving week, here’s something to be thankful for: the most recent draft of the FAFSA form itself includes a significant change. Parents only need to report the student’s 529 balance in their asset, not the student’s siblings’ 529 balances. This is very logical, given that the Student Aid Index is no longer divided among the family’s college students– and is yet another reason to use 529s as your preferred college savings vehicle. After all, if you use a taxable brokerage account or regular savings account, the full balance is reported as an asset. But if you set up a 529 for each of your children, balances for your other children are excluded from your student’s financial aid calculation.
We’ve still got a few weeks to go until the new FAFSA comes out, so stay tuned for additional updates.