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The cost of a degree in accounting may seem daunting to students and their families. Many students embark on their college admissions journey with little awareness of the financial aid opportunities available to them. Students seeking financial aid for accounting programs should begin by filling out the Free Application for Federal Student Aid, commonly known as the FAFSA.
Administered by the U.S. Department of Education (ED), the FAFSA serves as the gateway to Federal Student Aid (FSA) programs, which provide over $112 billion in federal grants, scholarships, loans, and work-study funds to millions of students each year.
The information collected on the FAFSA determines students' eligibility to receive any form of need-based federal aid. The FAFSA may also inform decisions about privately funded scholarships, college-specific assistance, or state-funded loans and grants.
You should complete the FAFSA even if you plan to pay for your education yourself, or if you believe your family income level is too high to qualify for financial assistance. Several schools require you to submit the FAFSA as part of their application process. Anyone who intends to pursue a graduate or undergraduate degree should learn about FAFSA funding. Otherwise, they might miss out on potential sources of student aid.
What Can You Use the FAFSA For?
Students apply their FAFSA aid to an array of educational purposes, including career schools, college programs, and graduate or professional degrees. Students sometimes rely on loans issued by the federal government or private banks to finance their education. Most borrowers prefer federal loans with a fixed interest rate. These do not require repayment until after borrowers leave school.
For accounting students, the FAFSA determines the type and the extent of funding available to them. Schools calculate the amount of financial aid awarded to a student by applying the Expected Family Contribution (EFC) formula, based on information from the FAFSA about family size, income, and other assets.
Once awarded federal aid, recipients may continue to receive assistance as long as they maintain the basic eligibility requirements and fill out the FAFSA form each year of enrollment.
Students should consider private loans only after exhausting other funding sources. Private loans typically charge higher interest rates and impose stricter repayment rules than federal loans.
Grants, sometimes referred to as "gift aid," generally do not require repayment unless the student drops out of school or goes on academic probation. Some schools offer work-study programs that place students in part-time, on-campus jobs.
FAFSA Eligibility Requirements
Eligibility for student aid through the FAFSA requires admission to or enrollment in a recognized degree or certificate program. U.S. citizens or permanent residents with green cards can fill out the FAFSA.
Applicants must possess a Social Security card or official government ID, and males between 18 and 25 must provide evidence of Selective Service registration. Educational requirements include a high school diploma, a GED diploma, or recognized homeschool equivalency.
While most applicants who meet the basic eligibility criteria qualify for aid, some exceptions apply, depending on the circumstances. Those who have been incarcerated or convicted for a drug-related or sexual offense may find their eligibility restricted.
When Do You Fill Out the FAFSA?
Deadlines for applying for financial aid vary by state. Several states set their filing deadlines as soon as possible after Oct. 1, the date the FAFSA becomes available each year. Some schools and states distribute their funding on a first-come, first-served basis. This means students who submit the FAFSA within the first 90 days of the filing season may receive more funding than others who file later.
While filing early may increase the size of the award, those who file later may benefit by reducing the amount of income used in the aid calculation. For example, some families may choose to delay the timing of their application if they can reduce reported earnings, shelter after-tax dollars in qualified annuities or retirement plans, or accelerate debt payments.
Information Needed to Complete the FAFSA
The FAFSA may seem intimidating, but if you take the time to gather all required documentation in advance, it's a simple process. Once you have collected all your records, create an FSA ID following the instructions on the website. Parents of dependent students also need to set up an FSA ID.
Acceptable forms of identification include a valid driver's license, a Social Security card, or an Alien Registration Number. The FAFSA requests tax returns from the past year and any records showing untaxed income. Parents of dependent students need to provide their tax records.
If you did not file a tax return, you should submit a W-2, a 1099, or pay stubs for each job held over the past year. You or your parents must report any other assets, such as real estate investments outside of your primary home or income from stocks. Applicants should also document any unusual expenses and their total debt load.
Before submitting your form, make sure to list at least one school to receive your eligibility information.
Filling Out Your FAFSA
The FAFSA provides three ways to file. Online filing offers the fastest and most convenient option. Students choosing the PDF option may fill out the form on the computer before printing it, or they may complete it by hand and mail it. Online filing shortens the FAFSA review process and allows applicants to list up to 10 colleges to receive their information. The paper version limits applicants to only four potential schools.
The application requires basic background information, including an address, marital and citizenship status, and legal records. It also requests the education level of applicants and their parents, the intended degree, and work-study preference.
Financial records include tax returns and any evidence of untaxed income. The student status section includes questions for military dependents, emancipated students, and wards of the state. The household section gathers information about the number of residents living in the home and how many will attend college in the coming year.
Parents of dependent children must provide answers to many of the financial, household, and status questions. The student, and a parent if the student is a dependent, must sign the certification statement confirming the accuracy of all information provided and agreement to all terms.
Tips for Completing Your FAFSA
- Apply Online: The online version of the FAFSA uses skip-logic, asking only relevant questions based on the applicant's previous responses and skipping those that do not apply. The online application catches common errors, resulting in greater accuracy and faster processing.
- Use the IRS Data Retrieval Tool: The IRS DRT transfers the applicant's tax information directly into the FAFSA form, exactly as it has been reported. This tool saves time and eliminates mistakes that slow down processing.
- List Your Potential Schools in a Particular Order: While federal aid does not ask applicants to list schools in any particular order, state aid eligibility sometimes requires you to do so. Students should verify state listing requirements before submitting their application.
- Fill Out Every Field of the Form: Fill in all fields, using a "0" to answer questions that do not apply to you. Skipped answers and blank fields slow down the processing of your FAFSA. Delays may affect the amount of aid awarded.
- Include an Explanatory Letter for Special Circumstances: Make sure to include any unexpected expenses on your FAFSA. These may include major medical bills or a reduction in income because of unemployment. In these special cases, you can submit a supplementary letter explaining why the situation requires more assistance and include third-party documentation.
How Do You Submit the FAFSA Program?
Online FAFSA submission requires the student (and a parent for dependent students) to sign the application electronically. If submitting a paper application, students and parents must provide handwritten signatures before returning the form by mail. The signed confirmation page attests to the accuracy of the information provided and acceptance of FAFSA regulations for receiving aid.
Student Aid Report
After you submit your FAFSA application, you will receive your student aid report (SAR), which provides information about your financial aid eligibility. When you receive your copy of the SAR, make sure to review it for mistakes and correct any errors as soon as possible on the Federal Student Aid website.
Your SAR includes the EFC, or the amount your family should expect to contribute to your educational expenses. The schools listed on your FAFSA application use SAR data as the basis for awarding federal assistance and other kinds of aid.
If your SAR has been selected for verification, your school cannot finalize your financial aid package until you submit the requested additional documentation.
Getting Your FAFSA Funding
Each school determines how and when you receive FAFSA funding. Once you have been admitted, the school sends you an aid offer breaking down the grants, loans, and/or work-study in your financial aid package.
You can choose which portions of the award to accept. Consider your situation carefully, accepting only what you need—especially if your aid package includes loans. Check with your school to find out how soon to expect disbursement of your federal aid, as each school has its own procedures.
Common Questions About the FAFSA Program
Do you need good grades to receive FAFSA funding?
As long as students continue to maintain satisfactory academic progress, most federal student aid programs base their awards on financial need without considering grades.
Is there an age limit for FAFSA aid recipients?
No age limit applies to FAFSA eligibility. While the form asks applicants to provide their age, this information is only used to establish parental dependency status.
Can your household income automatically disqualify you from the FAFSA program?
FAFSA does not enforce an upper limit on personal or family income. Many factors, such as family size or number of family members enrolled in college, affect the funding determination.
Do your parents have to be U.S. citizens for you to be eligible for the FAFSA program?
The FAFSA does not ask about your parents' citizenship status. If they do not hold a valid Social Security number, they may enter 000-00-0000 when asked for this information on the form.
Can you file your FAFSA before you've applied to any schools?
Yes, you can file before applying to any colleges. Name at least one school to receive your information, and consider listing others that interest you in case they require early deadlines. You may add or delete schools later.
Reviewed by: R.J. Weiss
R.J. Weiss is a certified financial planner and current CEO of the financial education company The Ways To Wealth. Weiss has worked with clients across a variety of fields, including insurance planning, investment planning, income tax planning, and retirement planning. The Ways To Wealth teaches the fundamentals of financial planning to hundreds of thousands of monthly readers.
R.J. is a paid member of the Red Ventures Education Integrity Network.
Page last reviewed April 22, 2022.
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