This column is for my brothers and sisters in the struggle. For those among us who, like our household, have a high school senior in their ranks.
In my house, my son’s college acceptance letters are in hand, the list has been narrowed and a declaration is imminent. At this point I am pretty confident if we can survive another five months of quarantine-enhanced acute senioritis, and from what I am told is likely to be a “summer from hell,” that we can finish this climb.
It is with this hope in one hand, and the narrowed list of college choices in the other, I set out once again to accomplish another right of parental passage, completing the dreaded FAFFA form. For those readers who are past this stage in life, or more entertainingly for those who have not yet reached it, the FAFSA is the government form used to determine financial aid. I generally recommend every family of an incoming college freshman complete this process, and the output will be pesteringly requested by any college your little bundle of joy considers attending.
This is the third time I have completed a FAFSA for myself, and I have also supported a good number of clients through the process as well. I am not going to go over FASFA strategies to enhance aid, that is another discussion. This conversation will focus on some small tips to get this dreaded task off your to-do list.
The process for my oldest daughter took the better part of a Saturday morning, about three hours; the second daughter took about 90 minutes, and this last time I knocked it out in 45. This is what I have learned. In this discussion we are completing the student FAFSA process, the parent process is similar but secondary to the student process, which is what will be requested by the schools.
First, the government, bless its little heart, labors under the delusion your high school senior is either completing this form for themselves, or sitting next to you while you spend quality time together. In the real world this has not been my experience, but you will need to have your senior “click sign” the form, so they will eventually need to be close.
The first thing you will need is to write down on a clearly viewable Post-It note all the identifiable information on your senior. This includes Social Security number, driver's license number, cell phone number and email address (hopefully you know their birthday). Before you start, the student's email should also be open in another browser tab, or have their cell phone in hand (yeah, right) as the FAFSA site will use these for verification.
The system will require the creation of a password and PIN. Write these down on another Post-It note. You do not want to get locked out of this system. After you’re done, destroy these Post-Its, or put them somewhere safe.
The system will ask if the person completing the form is the student or another person preparing the form for the student. In this process you are assisting the student, not professionally preparing it for them, so choose the student option.
For discussion purposes, I am assuming a straightforward situation. The form will request parents’ savings and investments. This entry should include checking, savings, CDs, stock, mutual funds, savings bonds and 529 plans. It does not include IRA, Roth IRA, 401(k)s, other employer retirement plans or life insurance cash value. The same applies for the line requesting the student’s assets. Have this information available before you start.
One critical reason my FAFSA process was sped up is in the tax section of the process. The process is now using 2019 taxes, which are highly likely to be filed at this point. The site will ask if you want to pull this data from the IRS site; you definitely do, as it speeds up the process considerably.
If you file your taxes jointly, have your spouse's Social Security number handy before you start as well. Make sure to use you and your spouse’s legal tax filing name in this part of the process. The same process can be used to import the student’s tax information if they filed a return in 2019 as well.
For most families, using these tips will save considerable time. If you do get hung up, or have a more complicated situation and need feedback, please shoot me an email. We are all in this together and I am glad to help. Good luck.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing includes risks, including fluctuating prices and loss of principal. Marc Ruiz is a wealth advisor and partner with Oak Partners and registered representative of LPL Financial. Contact Marc at marc.ruiz@oakpartners.com. Securities offered through LPL Financial, member FINRA/SIPC.
