Apply for FAFSA college aid money now, but avoid these costly mistakes

The Free Application for Federal Student Aid – also known as the FAFSA – rolled out Oct. 1 for students who plan to attend college next fall. This is one of the most important steps students and their families can take to secure money to pay for college since schools use it to determine eligibility for grants, scholarships, loans and work-study.

Students and their families should file their FAFSAs as soon as possible to get their share of the $150 billion in federal student aid, experts say. But they also caution that any mistakes could cost students thousands of dollars in financial aid.

Although the FAFSA is a crucial component of financial aid, 20% of undergraduate college students don’t have plans to complete it this year, according to a recent study from Student Loan Hero. It surveyed more than 1,000 undergraduate students from Sept. 9 to Sept. 20.

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In fact, 85% of students didn’t know that the FAFSA determines eligibility for free aid like grants and work-study in addition to loans, the survey showed.

“Unfortunately, many students have misconceptions about the FAFSA, which could be costing them valuable financial support,” Student Loan Hero said in its report.

The FAFSA is a free financial aid form administered by the Department of Education that helps students qualify for loans and financial aid for college. Students must complete the FAFSA form to apply for a federal student loan.

Household data from the FAFSA – such as annual income and savings – is crunched by the Education Department to determine how much a family could pay toward college. Colleges also receive data from the FAFSA, which serves as the basis for their financial aid offers to applicants, as well as state agencies.

Here are mistakes to watch out for with the FAFSA, according to experts.

1. Skipping the FAFSA

Only two-thirds (68%) of families with prospective college-bound students in the 2020-21 academic year submitted the FAFSA, the lowest recorded since 2008, according to Sallie Mae’s annual How America Pays for College report.

The most common reason? Nearly half (44%) didn’t apply for the FAFSA because they didn’t think they would qualify for any financial aid, the study from Sallie Mae showed.

“While this reasoning is more prevalent among high-income families (58%), nearly 1 in 3 of low-income families (31%) and middle-income families (36%) share this perception,” Sallie Mae said in the report. “This appears to be largely a perception.”

One-third of them, meanwhile, didn’t apply because they either missed the deadline, found the application problematic or too complicated, or didn't have time, data from Sallie Mae showed. Seven percent of nonfilers didn’t have time to submit, and 10% didn’t know about FAFSA.

Regardless of income, there are reasons to submit a FAFSA, experts say.

Any student who’s eligible can qualify for certain types of aid, including unsubsidized federal student loans. Those are loans made to eligible undergraduate, graduate, and professional students. But eligibility isn’t based on financial need.

It’s also worth having your FAFSA submitted in case your financial circumstances change throughout the year.

2. Don't wait to fill out your FAFSA

Submit your FAFSA as soon as possible, experts urge. Federal financial aid is awarded on a first-come, first-served basis, so apply as early as you can to maximize your financial aid.

About 42% of those who expect to file this year don't plan on doing so as early as possible, according to Student Loan Hero. While these students will put themselves in the running for financial aid and loans, they could unknowingly reduce their financial aid by waiting, experts say.

The last day to fill out the FAFSA application for the 2022-2023 academic year is June 30, 2023.

But college and state financial aid deadlines vary, so be sure to check your state’s financial aid deadlines here:

Also, apply for the FAFSA annually. You need to fill it out each year that you are or plan to be a student.

3. Avoid errors on your FAFSA

Double check the FAFSA form for errors before submitting it and be sure to include additional forms as needed.

Any mistakes like inaccurate Social Security and driver’s license numbers could slow down your paperwork if it gets flagged for review from either colleges or the Department of Education, experts say.

Most errors on the online FAFSA application can be corrected after submission, but a mistake with Social Security numbers may require you to submit a new application, experts say.

This article originally appeared on USA TODAY: FAFSA 2022-2023: How to get money for college with this application