The Scariest Ways Parents Mess Up Their Student’s College Aid

Students throw their caps in the air ahead of their graduation ceremony at the Royal Festival Hall on July 15, 2014 in London, England. Students of the London College of Fashion, Management and Science and Media and Communication attended their graduation ceremony at the Royal Festival Hall today. (Photo by Dan Kitwood/Getty Images)

You may be sticking your kid with more debt. | Dan Kitwood/Getty Images

As a parent, helping your kid apply for college financial aid can be a hands-on and time-consuming process. You play a central role in helping your child figure out how to pay for college and get the most student aid.  

If you refuse to help or make a mistake during the student aid application process, your child might take longer to finish a degree, pay more out of pocket, or even take out more student loans to make up the difference.

Find out the most common student aid mistakes parents make — so you can avoid them.

First: Forgetting to fill out the paperwork 

1. You failed to file a FAFSA for your kid

Free Application for Federal Student Aid (FAFSA)

FAFSA is important to get the most aid. | designer491/iStock/Getty Images

One of the worst ways you can mess up your college student’s financial aid is by failing or refusing to file a Free Application for Federal Student Aid (FAFSA).

Under FAFSA guidelines, students under 24 are considered dependents, with some limited exceptions. Note: The term “dependent” is defined differently in other contexts, such as when parents claim adult children as dependents on their tax returns.

Students who are classified as dependents must have a parent complete a portion of the FAFSA, said Erin Powers, director of communications for the National Association of Student Financial Aid Administrators (NASFAA).

According to Powers, there’s a good reason you’re required to provide this demographic and financial information on your child’s FAFSA. “The FAFSA determines a student’s eligibility for need-based financial aid by evaluating a family’s financial circumstances to establish what a family may be reasonably expected to contribute,” she said.

As a parent, you’ll submit tax forms and other financial information along with a FAFSA. This documentation is mandatory for your student to be eligible and evaluated for financial aid.

“Without parental information, a dependent student’s FAFSA will be considered ‘rejected,’” Powers said. “The student will not qualify for any federal student aid beyond an unsubsidized loan.”

Next: Missing the deadline

2. You waited too long to file a FAFSA

Folder labeled "Grants", glasses and notepad on graphs

Deadlines must be met. | LIgorko/iStock/Getty Images

The window for filing a FAFSA is pretty wide. For the 2018-19 school year, for example, FAFSA submissions were opened Oct. 1, 2017, and will be accepted through June 30, 2019.

“Federal financial aid deadlines are, for the most part, just priority deadlines by which students/parents need to submit their application and any accompanying documentation in order to receive their financial aid award in time to meet payment deadlines for a given semester,” Powers said.

Even if it’s the middle of the semester or school year and classes have already started, it’s rarely too late to file a FAFSA and get evaluated for financial aid. Additionally, when you file won’t affect how much federal financial aid your child will qualify for.

However, waiting too long to file a FAFSA could impact your child’s eligibility for state and institutional aid.

Many colleges and state-sponsored programs rely on information from a submitted FAFSA to evaluate a student’s eligibility for supplementary scholarships and aid. This process often happens well in advance of the school year, and aid might be granted on a first-come, first-served basis until funds run out.

Use this FAFSA tool to discover the FAFSA deadlines in your state.

If you file a FAFSA late, it could hurt your kid’s chances of getting help to pay for college beyond federal financial aid. So it’s a good idea to file a FAFSA as early as possible.

Next: Making FAFSA mistakes  

3. You submitted a FAFSA with errors

Jar with label college and money

Errors are easy to make. | designer491/iStock/Getty Images

You might include erroneous or false information on a FAFSA that can mess up your child’s financial aid. The FAFSA can be confusing to complete, and errors can slip in.

 Or you might make errors on your taxes that are then duplicated on the FAFSA, Powers said.

“Inaccurate tax filing can be a big hurdle during the financial aid application process,” Powers said. If you have errors on your tax returns, financial aid awards will be calculated on that incorrect information, potentially causing your child to lose out on funds.

“We would urge parents to seek assistance when completing their tax returns if there are any aspects they are unsure of,” Powers advised. If the Office of Federal Student Aid follows up with requests for additional documents or information, responding quickly can help keep your financial aid application on track.

Although FAFSA mistakes are usually accidental, some parents might consider purposefully including incorrect information on the form. Remember: Doing so is a fraudulent and criminal act that can result in jail time and up to $20,000 in fines.

Next: Assuming you’ll get financial aid that doesn’t materialize  

4. You miscalculated how much aid your kid qualifies for

Folders with the label Applications and Grants

Don’t go into it with any assumptions. | Zerbor/iStock/Getty Images

Many parents make the mistake of assuming they know how much aid their kid qualifies for before they submit a FAFSA.

For instance, you might plan on federal student aid to cover all college costs, only to find out you qualify for less aid than you’d counted on. If you end up in this situation, you’ll have less time to save and fewer options to pay for college. 

You might have to rely on student loans to keep your kid in college instead. However, a Student Loan Hero survey of parents who took out loans for their child’s education found that these parents can end up deep in debt. Among them, 55 percent owed more than $40,000.

On the other hand, you might be tempted to skip the FAFSA altogether.

“Many families that are relatively affluent assume that they won’t qualify for financial aid, so they either don’t file a FAFSA or wait too long to file,” said Jeff Weeks, a certified financial planner for wealth management firm ATX Portfolio Advisors.

“What these families may not realize is that not only will they not be considered for need-based assistance by not filing, but some universities won’t offer any scholarships (including merit-based) if there isn’t a completed application,” Weeks pointed out.

Next: The importance of working with the college financial aid office 

Work with your college’s financial aid office

Piggy bank

Work with the school’s financial aid office. | kroach/iStock/Getty Images

Students facing unique difficulties should reach out to their college’s financial aid office for additional help, Powers advised.  

“If a student’s parents are unwilling to provide their information on the FAFSA, the student should let their college’s, or prospective college’s, financial aid administrators know as soon as possible,” she said.

The college’s financial aid office can help parents who have issues or questions too.

For example, Powers suggested that if your financial situation is dramatically different from what’s represented in your FAFSA, you should get in touch with the financial aid office. You might have been laid off since then, or perhaps you finalized a divorce.

These financial aid administrators can evaluate your situation, provide personalized advice, and help you identify your next steps.

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