01/12/2015 02:42 pm ET Updated Mar 14, 2015

FAFSA and Family

Families of millions of high school seniors are about to embark on a time-consuming, invasive and generally distasteful project: filling out the FAFSA -- the Free Application for Federal Student Aid. The only thing that is worse than sitting down at your computer to attack the project is procrastination.

Since you can't get financial aid (either federal student loans or even most private loans) without filing FAFSA, the longer you delay, the less chance you have of getting many sources of aid, which are given out on a first-come, first-served basis. The best advice is to start right now.

Don't Procrastinate

Many families figure they have to wait until they complete their 2014 tax returns to file. That's the first mistake. You can file FAFSA now, using an estimate of 2014 income -- and then later correct the form online if necessary.

There's another reason families procrastinate, and it's rarely discussed in columns that give tips on FAFSA. The form asks very invasive questions about the parents' income and savings. In fact, this may be the first information the student has ever had about how much money his or her parents make, or have set aside in savings. (Assets in a retirement plan are not revealed in the FAFSA.) This disclosure of family finances can make some parents reluctant to file.

FAFSA gets into family financial dynamics in ways that may be totally unanticipated. If a student lives with a parent and step-parent, both parents in the household must reveal their income and savings. Parents in the process of divorce may use FAFSA filing as a weapon against a spouse by not agreeing to file. Students caught in the middle should seek help from their high school guidance officers, or the college financial aid office.

But the government rules are basically unbending: If a parent refuses to file FAFSA, the aid cannot be granted. (Financial aid administrators are given some discretion to offer non-subsidized Stafford loans if there is extensive proof that the student is no longer being supported in any way by the parents.) But it's not easy to declare your financial independence.

(For those wanting more detail, there is an extensive article on this topic at

File FAFSA Online

There are several advantages to filing your application online at Don't be intimidated by using your computer to fill out the forms. You can securely save your application if you don't finish in one sitting. And there are helpful instructions along the way. Plus, if you make a mathematical error, the form will call it to your attention.

Even better, if you file online now using an estimated income, the form will update as soon as you file your federal tax return. Online filing allows school codes to be searched and inserted easily. And experts say the response from colleges is quicker if you file the FAFSA forms online. The online FAFSA can be completed either in English or in Spanish, with instructions in both languages.

Important Filing Tips

-- Starting to fill out the form is the hard part; finishing is even harder. Don't give up!

-- Remember to file every year, updating the income and asset information to qualify for the next year's loans. Renewals are more easily done in the online form.

-- Money in a student's own name (such as in custodial accounts) weighs four times more heavily against the family in the aid formula. Such assets should be spent down on the student's behalf in the year before making application.

-- Money in a 529 college savings plan -- either in the custodial parent's name or in the name of a dependent student -- is considered a parental asset, but it impacts financial aid in a minimal way. (Money in a 529 plan in the name of a non-custodial parent, grandparent or other person is not counted as a FAFSA asset -- but withdrawals are considered non-taxable income to the student, and have a much larger impact on the aid formula, potentially reducing aid by 50 percent!) Note that any money withdrawn from a 529 plan to pay for college expenses is ignored if the distribution is for qualified expenses and comes from a 529 account listed as an asset on the FAFSA filing.

-- When entering your income on FAFSA, do not use cents. Instead, round up to the next dollar to avoid any possibility of error.

-- Use correct Social Security and driver's license numbers. If your parents do not have a SS number, use 000-00-0000. Do not make up a number!

-- Don't forget to sign the application. If filing online, you will be instructed to get a PIN, which becomes your electronic signature.

Finally, don't get so overwhelmed by all this advice that you decide to wait even one more day to file. In this case, time is most certainly money. And that's The Savage Truth!

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