By Scott Kahan
As a financial planner who has worked with many clients over the years figuring out how to pay for college, and as a parent who has sent two Greeley graduates to college, January 1st was never a date to look forward to. Just the uttering of the term FAFSA will send many parents into a panic.
For high school seniors who will be entering college in the fall of 2017, the quest for financial aid is beginning and FAFSA is a term you will get to know quickly.
What is the FAFSA?
The short answer is that the Free Application for Federal Student Aid forms, commonly referred to as the FAFSA, are the forms that are filed each year to be eligible for financial aid. Many parents tell me that since their child will not be eligible for aid, they don’t need to bother with the forms. Assuming that you have saved enough for college and will not need to borrow money, then you may not need to file the forms. On the other hand, if you are like many families that will either need financial aid and/or need to borrow, you will still need to file the FAFSA forms to be eligible for some of the loans offered for both parents and students.
Big Changes Coming
The main reason for the struggle each year is that when you file the forms in January, you have not even filed your tax returns, let alone received your W-2s, 1099s and other financial information needed from the prior year.
At the start of the 2017-2018 college year, the FAFSA forms can now be filed as of October 1, 2016. The good news is that since this is a transition year, you will use your 2015 financial information. For those with returning students, you will again use your 2015 financial information that you used when you filed earlier this year. If this is the first time you file the FAFSA, you should already have all the financial information you will need from 2015.
Going forward, you will use the prior year information. For example, for the 2018-2019 school year, the forms will be filed starting October 1, 2017, using 2016 information.
Get started early and don’t panic!
Scott M. Kahan, is a Certified Financial Planner® professional and President of Financial Asset Management Corporation, a fee-only wealth management firm located at 26 South Greeley Avenue in Chappaqua. Call Scott Kahan at 914-238-8900 or write to firstname.lastname@example.org.