How to help students understand and navigate the FAFSA

The Free Application for Federal Student Aid (FAFSA) is a crucial part of the financial aid process for students. Submitting this form helps make higher education more affordable and accessible, empowering students to seek their desired path for long-term success. Affordability is a primary concern for many students and families, so simplifying the financial aid process and enhancing student knowledge can significantly impact their actions and attitudes toward higher education. Here, you can discover the best ways to engage students and ensure their understanding of the FAFSA and other methods of covering the cost of education.

Importance of student understanding of federal financial aid

The FAFSA is critical for students needing financial support to cover the cost of higher education. This tool gathers essential information to determine which loans and grants a student qualifies for and contributes to lower student loans after graduation. The application is free to complete, and every student should complete it to receive personalized financial support. The FAFSA considers several aspects, including special circumstances, tax records, untaxed incomes such as child support, and other assets, to provide financial aid opportunities to make higher education more affordable.

Students can use FAFSA money for various educational purposes, including tuition, books, room, board, and other college or university fees. Students can complete yearly, updating their information and receiving accurate aid based on their current needs and family financial situation.

The financial award amount for each student is typically segmented throughout the academic year, meaning it does not come all at once. Funds appear based on the institution and the student’s enrollment. For example, students often receive half of their aid at the start of the Fall semester and again at the start of the Spring semester in traditional higher education environments.

The biggest advantage of completing the FAFSA is receiving money from the federal government that students, some of which they don’t need to repay. Student debt is a crippling factor for student dropouts, with nearly 40 percent of dropouts occurring due to financial concerns and pressure. With college tuition facing price increases, it is more vital now than ever before for students to complete the FAFSA to receive the necessary financial support.

The Pell Grant alone can deliver up to $7,395 of aid. While each student’s enrollment status, attendance cost, and family contributions will impact this amount, the bottom line is that this federal student aid can be the difference between empowering a student to pay for education rather than dropping out or neglecting to apply to an institution in the first place.

Overview of the financial aid process

While the FAFSA plays a significant role in accessing affordable education, it can be beneficial to understand the overall financial aid process. There are several ways students can pay for college, and these financial awards often go hand in hand. However, many prospective students do not know where to begin applying for aid or how to access forms and documents to ensure they get the most aid possible. Generally, students should follow these steps:

Look for “free” money: Free money refers to any financial aid that a student does not need to repay after graduation. Financial aid often only covers a portion of education costs but can significantly impact total debt amounts. Students should begin looking for assistance by communicating with the school they are interested in to determine any available financial award packages and acceptable scholarships they can apply for. Furthermore, students who work full or part-time can investigate whether their employer offers any form of tuition reimbursement.
Know the deadlines: As students begin narrowing down their school and program search, it will be crucial to know any related deadlines. Some scholarships have deadlines well before a semester or program starts, while others are dependent on a student’s area of study, location, or educational institution. Other aid opportunities have strict deadlines for every student. For example, the FAFSA adheres to federal guidelines, requiring students to submit their application several weeks or months before the start of term.
Complete the FASFA: This free application is available online for every higher education student. The FAFSA will ask for information such as tax returns, social security numbers, records of investments, and information about any institution the student plans to apply for or attend.
Compare school options: Any schools a student lists on their FAFSA will receive details regarding the student’s FAFSA results. Institutions will use this information to create another financial aid package the student can use at that specific institution. Students should compare these packages and their academic needs before committing to an institution.
Ensure ability to cover costs: The last step in the financial aid process is to ensure the student can cover any remaining costs for their education. If the school’s financial package and federal aid do not cover the full balance, the responsibility falls on the student to find other ways of paying for their education. Students must know exactly how much it will cost to attend their school of choice, including any room and board, tuition, books, and similar fees. Students can either pay for the remaining balance with any money they or their family members possess or apply for student loans to repay after graduation.

Navigating recent FAFSA changes

A new FAFSA form launched in December 2023, bringing several significant changes for students and families. These changes transformed parts of the application process, making aid even more accessible for students. Institutions should understand these changes and encourage students to be prepared to:

Name contributors to provide information: The term “contributor” refers to anyone who must provide information on the FAFSA. Contributors could include the student, their parents or a parent’s spouse, the student’s spouse, adoptive parents, or legal guardians. The application will ask students several questions and guide them to determine contributors depending on their answers. All contributors must provide consent for the IRS to transfer federal tax information to make a student eligible for federal student aid.
Need a StudentAid.gov account for form access: One of the most significant changes is requiring a StudentAid.gov account. Students will only be able to access the FAFSA form if they have this account. Each contributor must create an account to access the form, sign the document, provide consent, and submit the application.
Qualify for additional Pell Grant funds: More students are now able to qualify for federal grants. The new eligibility formula will contribute to Pell Grant eligibility, but other factors, such as poverty guidelines and family size, also play a role. Students who do not qualify for the maximum Pell Grant amount may still receive a smaller Pell Grant award.
Understand the new eligibility formula: A new formula will determine financial aid eligibility and awards. Contributor and student information will help the government determine a Student Aid Index (SAI). The SAI replaced the Expected Family Contribution number and does not reflect a dollar amount.

Helping students with FAFSA: Tips and common mistakes

With so many students and families relying on federal aid to make education accessible, it’s crucial to understand the do’s and don’ts of completing the FAFSA. Several common mistakes can prevent students from receiving financial awards. Communicating these mistakes and establishing the best completion tips can ensure students get the help they need.

Some of the most common oversights include:

Leaving fields blank: Neglecting too many fields can cause miscalculations or application rejections. Contributors should respond to all relevant fields and write “zero” or “not applicable” in fields they would otherwise leave blank.
Entering temporary addresses: Students may be tempted to write their current or intended location on the FAFSA. For instance, some students write their apartment or dorm number on the FAFSA. This can impact their eligibility or cause them to miss physical mail notices. Students should always use their permanent address or their family’s address when completing the form.
Forgetting to list institutions: Each higher education institution has a Federal School Code. Students should gather these codes from any school they applied to and list them accordingly for accurate monetary awards.
Neglecting sign and date prompts: Contributors must always sign and date the FAFSA. A lack of signatures will make the student ineligible for federal aid. Dating the application highlights the student’s financial and marital status as of the completion date. This information can prevent discrepancies in the event that a status changes after the student submits the application, such as a student getting married.
Listing marital statuses incorrectly: Student must record their marital status at the time of signing the application. The FAFSA may also require information about the student’s parents, including whether the parents live together or have remarried. Students may be required to list both legal parents on the FAFSA if they live together, even if they are not married. Additionally, students must list the information of their stepparents when applicable.

Institutions can encourage students to follow these tips for FAFSA completion:

Apply early to become eligible for the most aid.
Complete the application online rather than on paper.
Use the IRS Data Retrieval Tool to transfer tax data directly to the application.
Have all documents ready before beginning the application.
Read all questions carefully.
Use in-form resources, articles, and help text to clarify any questions.
Correct any mistakes as soon as possible.
Complete the application even if the expected award is minimal.

A breakdown of financial aid options

Administrators should understand the difference between various aid options to explain each way students can lower their educational costs. Students should understand what your institution offers and what combination of aid will be the most beneficial.

There are two primary types of aid. Merit-based aid is an institutional award providing aid to students with specific talents or academic, artistic or athletic abilities. These financial rewards vary by school, making some institutions more affordable than others. Need-based aid refers to monetary rewards students can obtain from the government and by completing the FAFSA.

Students can make higher education more affordable through:

Loans: Students can take out loans to cover the cost of education. Government loans are fixed-rate loans, allowing students to borrow direct unsubsidized or subsidized loans. Students can also borrow from private lenders. In either case, students must repay their loans after graduation or upon leaving their academic institution.
Grants: Grants are awards that students do not need to repay. The Pell Grant is one of the most widely-known federal grants, but there are several others. Grants use information, including family size and poverty guidelines, to determine how much aid a student receives.
Scholarships: Scholarships are a form of financial aid based on specific criteria, such as academic achievement. Scholarships are merit-based awards that can apply for one academic year or apply to the duration of a program, depending on the institution and scholarship. Students can find scholarship opportunities from their intended institution, employers, community organizations, federal agencies, and organizations in their field of interest.
Work-study programs: Students qualifying for a work-study position can take on part-time work at their institution to help cover college-related expenses. Most of these positions pay minimum wage, making them a great way to cover costs like food, activities, and miscellaneous spending.

Active approaches your institution can take

Higher education institutions can take several steps to improve financial aid transparency and simplify the process for prospective students. Increasing conversations about this subject can spark greater interest in your community and empower students to seek the right program. Here’s how your institute can contribute to this collaborative culture:

1. Offering assistance programs

Higher education institutions can take the reins by offering assistance programs. Many institutions have created engaging programs to help students and families navigate the financial aid process. From hosting regular seminars to building comprehensive support networks to throwing celebratory community events for FAFSA completion, there are many ways to spread financial aid information and ease the application completion process.

2. Delivering mailing and engaging outreach

Increasing outreach efforts can bridge the gap between students and higher education institutions. Some students may not know where to begin searching for financial aid or understand the options available to them. Starting the conversation with engaging outreach can help them start the process and navigate applications in a timely manner.

While you can administer mass emails or papers, a more personalized approach is often more successful. Personalized mailings regarding free or lowered tuition may increase application and enrollment rates. Other strategies, such as text message interventions, can also be more effective in reaching younger students who may be less likely to sort through physical mail.

3. Leveraging powerful technology

Leveraging automation and robust technology can empower you to refocus your financial aid team’s time. Comprehensive solutions can help you access base-level information quickly, allowing your team to provide a more tailored experience for each student. This technology can provide a comprehensive view of your financial package offers, student funding sources, and any balances due, enhancing communication and understanding on both sides.

How Watermark can empower your students

Watermark is higher education’s got-to software suite for driving student success and meeting institutional goals. We empower continuous improvement by delivering high-quality solutions for simplifying workflows, enhancing communication, and boosting student engagement. Watermark products can help students overcome financial obstacles and make processes easier for students and administrators.

Watermark Student Success & Engagement delivers crucial insights for student engagement, optimizing degree completion, and increasing retention rates. Our predictive analytics software can identify at-risk students, empowering you to intervene at crucial moments. Our solutions also provide benefits by allowing actions such as completing forms, creating a central location for important documents, and enhancing communication with students.

Promote student success with Watermark

When you need to engage students and optimize your retention and enrollment, trust Watermark to provide the quality solutions to transform your processes and give your students the tools they need to succeed. Request a demo of our Student Success & Engagement software to see what we can do for your institution.