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By Adam Zoll | 03-04-2014 04:00 PM

College Planners: Avoid These Common FAFSA Mistakes

All families should submit a FAFSA regardless of income level, but they also need to monitor household finances and understand student aid formulas, says Edvisors publisher Mark Kantrowitz.

Adam Zoll: From Morningstar I am Adam Zoll. College acceptance letters are already in the mail, but for those who still haven't filled out their Federal Financial Aid Forms. There is still time. Here to talk about the Federal Financial Aid Form, or FAFSA, as it's known, as well as common mistakes that people make while filling it out is Mark Kantrowitz. He is publisher of Edvisors.com, a college-planning website.

Mark thanks for joining us today.

Mark Kantrowitz: Thanks for having me.

Zoll: Mark you've written that one of the most common mistakes people make when it comes to the FAFSA is failing to fill it out at all. Why is that one of the most common mistakes?

Kantrowitz: It's leaving money on the table, and everybody who files a FAFSA is eligible for the unsubsidized Federal Stafford Loan and the Parent PLUS Loan. They don't depend on financial need. But even among students who might be eligible for a Pell Grant, about 2.3 million undergraduate students didn't file the FAFSA who would have been eligible for a Pell Grant, and of them about 1.1 million would have been eligible for a full Pell Grant.

The FAFSA is also your gateway not just to federal student aid, but also to financial aid from the state governments as well as financial aid from all but about 250 mostly private colleges.

Zoll: Would you recommend that even students from higher-income families, who maybe don't expect to receive any aid, still fill out the FAFSA?

Kantrowitz: Absolutely. The financial aid is based on financial need, which is the difference between the cost of attendance and the expected family contribution. Now you can have greater financial need if you have the lower EFC. But you can also have greater financial need if you're enrolled at a higher-cost college. So middle- and upper-income students are more likely to enroll at much more expensive colleges and they may qualify for some need-based aid at those more expensive schools.

Zoll: Let's talk about timing. Here we are in March; the tax deadline is coming up next month. Is it too late to file for financial aid if you have already been accepted to a school or if you are planning to attend in the fall.

Kantrowitz: Ideally, you should file as soon as possible after Jan. 1. The federal government has an 18-month application cycle. You can apply for Federal Student Aid as late as the last day of the semester of the academic year or June 30 of 2015, whichever comes first.

However the state aid and the institutional aid tend to have much earlier deadlines. So you may have missed the deadlines for your state. There are two states that have deadlines in February. There are 10 states that have deadlines in March. There are seven states that award their aid on a first come, first serve basis. But it's better to apply than to not apply. There still is some money available, and you should get a head start on next year's FAFSA by making sure to put in your calendar that you start as soon as possible after Jan. 1.

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