What you need to know about the FAFSA 2022-2023 application
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The free application for Federal Student Aid (aka FAFSA) opens October 1, 2021 for the 2022-2023 school year. And in a year where change seems almost constant, the FAFSA app has undergone some changes as well.
Select spoke to Kalman Chany, president and founder of Campus Consultants, a company that guides families through the financial aid process, to explain why families should pay close attention to this year’s nomination.
How is the FAFSA application different this year?
Although the questions on the app will not change for the ’22 -’23 school year, the way the answers are interpreted will be a little different, explains Chany.
There are two application questions that have traditionally been “disqualifying” for financial aid: a question on drug convictions and a question on Selective Service registration.
In the past, students who received a drug conviction while also receiving financial aid were disqualified for future financial aid. And male students 18 or older who indicate on the FAFSA form that they did not enroll in the project have also been disqualified from receiving financial aid.
These two questions will still be on the application, but having a drug conviction and not entering the draft will no longer impact students’ ability to receive federal benefits. financial aid.
According to the Federal Student Aid website, there will be a few other small tweaks, including a visual update to the website and the ability for users to indicate whether they are a student, parent, or preparer, before starting the FAFSA application.
How will Covid-19 unemployment benefits affect student demand?
This year, completing the FAFSA application can be a bit tricky for some families who have received Covid-19 unemployment benefits under the CARES Act, Chany explains.
Some families who received the increased employment benefits may have earned higher incomes in 2020 and 2021 compared to previous years. In addition, the exclusion from unemployment benefit (UCE) adopted on March 11, 2021 allowed tax relief of up to $ 10,200 for unemployed people who were receiving unemployment.
The tax filing season began in February 2021, before the provision was passed, so those who filed their tax returns earlier could not initially claim the tax break. The IRS made an adjustment for filers when sending out refund checks.
But this poses a problem for early filers who are now filling out the FAFSA form for their students this year. Without the UCE tax credit shown on their tax forms, they have essentially overestimated their income and, as a result, could reduce the amount of federal student assistance that these families can receive.
âThe provision allowing up to $ 10,200 in unemployment income to be tax exempt had yet to be passed when some people filed their tax returns in February or early March,â Chany said. The IRS said early filers don’t need to change their tax returns and they will still give them this tax credit. The problem is with people who filed early and use the recovery tool. data from the IRS on the FAFSA form, their income will be overestimated because the data recovery tool will extract the data originally filed before the IRS adjustments for the UCE. This tax break from the UCE would have reduced their data. adjusted gross income. “
Federal Student Aid Office guidelines encourage financial aid administrators to work with affected families to use their professional judgment to appropriately adjust the family’s adjusted gross income on demand.
What should the affected families do?
For families who are concerned about the impact of the lack of a UCE tax credit on their FAFSA application, Chany recommends that they wait for further guidance before completing the FAFSA application until their student applies or does not apply. not attend schools in states that provide financial aid on a first come, first served basis.
There are 13 states that give aid this way: Alaska, Illinois, Kentucky, Missouri, Nevada, North Carolina, North Dakota, Oklahoma, Oregon, South Carolina, Texas, Vermont and Washington.
“It only helps to deposit early if the school donates money on a first come, first served basis,” he said. âOtherwise, there is no benefit in completing the FAFSA application immediately after it opens on October 1. It is best to wait and make sure you have the tax advice you need to complete the form correctly. “
How to fill out the form?
To begin completing the application, students and parents should go to fafsa.gov to register, log in, or print a hard copy of the application. Families will first need to enter biographical information about the student, including full name, permanent mailing address, date of birth, social security number, driver’s license number, email address, nationality, alien registration number (if applicable) and marital status.
Students will also have to indicate whether they are enrolled in the Selective Service (if they are male) and if they have ever been convicted of drugs (but the answers to these questions will no longer have an impact on your eligibility for receive financial assistance).
Students will also enter information about the high school they are attending and the college degree they are looking for.
The next section is about the student’s income tax return status and will include questions about the 2020 income tax return, income tax return status, Schedule 1 return, and adjusted gross income for the student. and his or her spouse (if applicable). There will also be issues related to child support, education tax credits, scholarships obtained, and other federal programs or distributions you may have received.
The third section includes questions to determine whether the student’s parents must share their income and tax information in order to qualify for federal aid. Typically, students who are dependents will be required to report information about their parents’ income and tax returns on the FAFSA app.
Once it is determined whether the parent’s information is needed, parents will enter their own biographical information and answer questions related to their adjusted gross income, wages, taxable income, and assets.
The following section is intended only for non-dependent students and requests information about their household. And for the last two sections, students fill in the names of the colleges for which they wish to receive financial aid.
It is helpful for students to know the federal school code for each institution, which can usually be found on the financial aid page of the college website. But if they can’t find it, they can just write the name of each school. Then all that remains is for the students and parents to sign and date the form and submit it.
This information can be found in a draft application on the Federal Student Aid website, or it can be found with additional tips and advice in Chany’s latest 2021 edition of “Paying for College 2022: Everything. what you need to maximize financial aid and college. “
Keep in mind that you will need to reapply for assistance each year you are in school. The actual time it takes to receive your financial aid award letter – outlining the amount of aid you will receive – will vary from school to school. However, schools typically send award letters within three months of receiving FAFSA information from students from the Department of Education.
The last day to complete the FAFSA application for the ’22 -’23 school year is June 30, 2023. The form can still be completed and submitted even if you are still applying to colleges and have not yet been accepted.
Editorial note: Any opinions, analysis, criticism or recommendations expressed in this article are the sole responsibility of the editorial staff of Select and have not been reviewed, endorsed or otherwise approved by any third party.