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Answers to Your Toughest FAFSA Questions

At Nitro, we want to help you get through the FAFSA with as little pain as possible. We also know that even with guidance, individual circumstances may make some of the FAFSA questions difficult to answer. That’s why we recently gathered your latest and most complicated FAFSA questions and posed them to college financial aid pros to get the info you need. (Note: The following are only for guidance on how to think about the FAFSA. If you have a specific question, please contact the FAFSA Helpline or your school for detailed information.) 

Psst ... you can also check out our Step-By-Step Guide To Completing The 2022-2023 FAFSA Questions. Here’s what we found out.  

I can't log into my FAFSA - what do I do?

Reader question: I'm having trouble signing into the Department of Education website with my child’s ID and password. What do I do?

When completing your portion of the FAFSA as a parent, it’s important that you create your own unique FSA ID with the Department of Education. FSA IDs serve as a legal signature for the FAFSA, so your ID and username should be independent from your child’s.

 Note: With the 2022-2023 release there is no longer a Save Key feature that you may have used in the past. Prior to logging into the FAFSA, you'll have to select your role (Student, Parent, or Preparer). Once you select your role as “Parent" you'll be asked to enter your student’s personal identifiers which will link you to your student’s FAFSA form.

If you already:

  • have an FSA ID but don't remember your username, click Forgot Username.
  • have an FSA ID but don't remember your password, click Forgot Password.
  • Note: The password must be between 8 to 30 characters long. You can use any combination of numbers, uppercase and lowercase letters, and/or special characters.

Reader question: I can't get into my FAFSA!

If you're having trouble logging into your FAFSA with your username and password (FSA ID), you can check your FSA ID is fully functional by doing the following:

  1. Once the student selects their role as “student” they can click on “Log in to Continue” or use their personal identifiers to access the FAFSA form.
  2. Check to see if your FSA ID is matched with the Social Security Administration (SSA). 
    a.
    If the status is "Pending," your FSA ID is still being matched with SSA. You should wait a few days to try your FSA ID. (It typically takes one to three days from the day the FSA ID was created to match with SSA).
    b.
    If the status is "Not Matched," your information didn't match with SSA. You'll need to go to your information page and check your name, Social Security Number (SSN), and date of birth are correct and entered as they appear on your Social Security card. (If you changed your name, check you're using the name on file with the SSA).
    c.
    If the status is "Matched," your information matched with the SSA.
  3. Is your FSA ID enabled? If your FSA ID status is disabled and you didn't disable it, call the Federal Student Aid (FSA) Center at 1.800.433.3243 (or TTY for the deaf or hard of hearing at 1.800.730.8913.)

I forgot my FAFSA password.

Reader question: I don’t remember my FAFSA password. What can I do?

If you have an FSA ID but don't remember your password, select “Forgot My Password” you have two options.

Option 1: You can click on “Use Personal Identifiers:” to access the FAFSA form. You'll be asked to enter your first name, last name, date of birth (mm/dd/yyyy) and Social Security number, then click continue. Next, you'll be directed to your FAFSA application.

If that doesn't work for some reason, you can also reset your password using the following steps:

  • Enter either your FSA ID username, email, or mobile number. Next, enter your date of birth (month/day format), and hit continue.
  • Select one of the three recovery options: text a secure code to my mobile phone, email a secure code, answer my challenge questions. (Note: If you use the challenge question option to reset your password for security purposes, there is a 30-minute delay before you can use your FSA ID.)
  • Enter your security code or answer your challenge questions.
  • Create a new password.

What if I don’t have a driver’s license?

Reader question: I don’t have a driver’s license. Should I put my state ID number or leave the form blank?

The field for driver’s license on the FAFSA is optional, so it’s up to you. You can choose to enter your state ID number or simply leave the field blank. The choice is yours.

If you do submit your state ID number, the Department of Education will use it to further verify your identity for security purposes.  

Can I create the FAFSA ID for my parents?

Reader question: Can I create the FAFSA ID for my parents? How do I do it?

To make a parent FSA ID, you'll need to do the following:

  • Go to studentaid.gov
  • Fill in the information requested under "Create an FSA ID" and then click "continue."
  • You will be directed to another page to input your parent's personal information such as their name, address, and Social Security number.
  • Then submit the request.

When you first create your FSA ID, the use of your FSA ID will be restricted to completing, signing, and submitting an original (first-time) FAFSA form. You'll have to wait one to three days for your information to be confirmed by the Social Security Administration (SSA) before you can use your FSA ID for other actions, such as submitting a FAFSA Renewal or signing a Master Promissory Note. If you provided an email address, you'll receive an email letting you know that your information was successfully matched with the SSA, and you can begin using your FSA ID.

Note: You can't use the same email address or phone number for the parent and student FSA IDs. 

Do I need to have this year’s tax return?

Reader question: I haven’t filed my taxes yet this year and I read that my child won’t receive aid unless I have. Is it okay to use last year’s tax return?

Absolutely. In fact, in recent years the Department of Education has changed its position on which tax return is required for the FAFSA.

When completing the FAFSA for the 2022-2023 school year, students (and their parents, if the student is considered dependent) will submit information from their 2020 Tax return.

For online applications, the Department of Education uses a tool called the IRS Data Retrieval Tool (IRS DRT) which allows students and parents who filed a U.S tax return with the Internal Revenue Service (IRS) to access the tax return information needed to complete the Free Application for Federal Student Aid (FAFSA), and transfer the data directly into their FAFSA.

Here's a handy chart from the Department of Education for more info:

When a Student Is Attending
College (School Year)
When a Student Can
Submit a FAFSA

Which Year's Income Tax
Information Is Required

July 1, 2021 - June 30, 2022 October 1, 2020 - June 30, 2021 2019
July 1, 2022 - June 30, 2023 October 1, 2021 - June 30, 2022 2020
July 1, 2023 - June 30, 2024 October 1, 2022 - June 30, 2023 2021
July 1, 2024 - June 30, 2025 October 1, 2023 - June 30, 2024 2022
July 1, 2025 - June 30, 2026 October 1, 2024 - June 30, 2025 2023
   July 1, 2026 - June 30, 2027   October 1, 2025 - June 30, 2026    2024

How does retirement affect FAFSA income reporting?

Reader question: My husband retired this year, causing our income to drop significantly. When filling out the FAFSA, should we use last year’s tax info, or should we use the income we will be claiming on our next tax return?

If you're filling out the FAFSA in the fall, you'll need to use your tax info for the prior year. However, if your income has changed substantially since then, you can call the school your child plans to attend and let them know about your decreased earnings. Schools are sometimes able to adjust the data you supplied on your FAFSA if special circumstances apply, such as a job loss.

You'll probably be asked to submit additional documents for verification. In any case, don't wait until January to apply for FAFSA, or you could miss out on important financial aid deadlines. 

How do I correct a mistake on my child's FAFSA?

Reader question: I was ready to submit the FAFSA and noticed the filing status for my child is listed as married-filing joint return. She is not married and didn't file any type of tax return. FAFSA won't allow me to change this. How can I make a correction?

You should be able to make changes to any field in your FAFSA application (except your Social Security number), either before or after you have clicked Submit.

To make changes, click the Login button on the FAFSA home page and then click Make FAFSA Corrections. Your correction should be processed in three to five days.

How do I note student income if they didn't file taxes?

Reader question: My student received a 1098T last year and there is $3,500 difference between box 5 and box 2. I assume the difference would be considered income for the IRS and included on a 1040A line 7. However, he was not required to file taxes. The question is, where do we put this amount on the FAFSA? We don't want to mess up and lose out on financial aid money.

Your student is not required to report this amount on the FAFSA since he was not required to file a tax return.

Do I need to include 529 accounts for my other children? What about other investments?

Reader question: I'd like to know what’s included as net worth investments. We have a 17-year-old who is going to college next year and a 14-year-old and we have some money saved in 529 accounts for each of them. Do we report a total of two 529 accounts on the FAFSA, or only the portion that is designated for the 17-year-old? I'm assuming any stocks are added to this line as well? What else should be added to this line? I read that we do not add our 401K, the house we currently live in, cars, etc.

You'll need to report the total combined dollar amount contained in both 529 plans for both of your children.   

You are correct that stocks and other investments should be added to this line as well, including:

  • the net worth of investment properties (which can be found by subtracting the debt owed on the property from the value of the property)
  • trust funds
  • UGMA and UTMA accounts — UGMA and UTMA accounts are considered assets of the student and must be reported as an asset of the student on the FAFSA regardless of the student’s dependency status
  • money market funds
  • mutual funds
  • certificates of deposit
  • stocks
  • stock options
  • bonds
  • other securities
  • installment and land sale contracts (including mortgages held), and
  • commodities

Do not include your current home, car, or 401(k). (the home in which you (and your spouse) live; cash, savings, and checking accounts; ABLE accounts; or the value of life insurance and retirement plans (401[k] plans, pension funds, annuities, non-education IRAs, Keogh plans, etc.).

Do I have to list fellowships from last year as income?

Reader question: Last year, I received a fellowship for my graduate studies. I am now filling out FAFSA for the coming academic year for a different graduate program. I'm confused about whether I should list the amount from line 7 of my 1040 form under taxable scholarship income. I did report scholarship income to the IRS that year, but it seems irrelevant to my financial status for the next academic year since I received no scholarship this year and will not receive any scholarship next year.

Should I input $0 for the FAFSA question regarding taxable scholarships and grants or should I input the amount from the 1040 line 7?

If the taxable income from the prior fellowship appears on Line 7 of your 1040, you must report that number, since the FAFSA is asking for information from that year.

Completing the FAFSA with divorced parents

If your parents are separated or divorced, the custodial parent is responsible for filling out the Free Application for Federal Student Aid (FAFSA). The custodial parent for federal student aid purposes is the parent with whom you lived the most during the past 12 months. (Note: That's the twelve-month period  ending on the FAFSA application date, not the previous calendar year.) That doesn't necessarily mean the parent who has legal custody. If you didn't live with one parent more than the other, the parent who provided you with the most financial support during the past twelve months should fill out the FAFSA. This is most likely the parent who claimed you as a dependent on their tax return. If you haven't received any support from either parent during the past 12 months, use the most recent calendar year for which you received some support from a parent.

NoteIn the 2022 – 2023 FAFSA there is a new view that appears at the beginning of Section 4 to help students determine which parents’ information they should enter based on the parent’s marital status. 

Reader question: Do I have to include my child’s father’s income if we are no longer married? My child lives with me and I claim her as a dependent on my taxes.

Since you aren't married and don't live with the child’s father, you alone are considered the custodial parent and therefore you don't have to include his income.

Keep in mind that you will need to include any child support you receive and/or the income of a spouse if you have since remarried.

Parents separated but not divorced.

Reader question: My parents are separated but still married. Whose income do I report? What if the parent I live with doesn't work?

For FAFSA purposes, your married parents are separated if they are considered legally separated by a state, or if they are legally married but have chosen to live separate lives, including living in separate households, as though they were not married.

If your parents are separated and do not live together, answer the questions about the parent with whom you lived more during the past 12 months.

If you lived the same amount of time with each separated parent, give answers about the parent who provided more financial support during the past 12 months or the most recent 12 months that you received support from a parent.

If I remarried, do I need to include my spouse's income?

Reader question: If I remarried and filed joint taxes for the past couple of years, do I need to include all income (for me and my spouse) even though my spouse’s income doesn't support my dependent?

Yes. If you're divorced, the FAFSA is completed using the custodial parent's income. If you have remarried and you are the custodial parent, your spouse's income and assets must be included when reporting financial information.

Should parents file as married or divorced if they have remarried?

Reader question: I’m not sure whether to list as married or divorced on the FAFSA. I entered "divorced," but when I included my new husband’s income, it questioned whether I had made a mistake. What should I do?

You should select the "married/remarried" option for yourself.

Since you are remarried, you're right that you'll need to include your current husband's income and assets when reporting your financial information.

Should I include a non-custodial parent on FAFSA?

Reader question: I have three kids going to college. I never married their father and we have both since married other people. How do I fill out the part where it says marital status of “parents?” Does that include their father?

As the custodial parent, you don't need to list the children's father on the application. You should select the "married/remarried" option for yourself.

However, since you're remarried, you'll need to include your current husband's income and assets when reporting your financial information. 

Can I correct my FAFSA after I submitted it? How?

Yes. You can make changes in one of three ways:

  1. Go to studentaid.gov
    - Select the "Log In" button and enter your FSA ID
    - On the “My FAFSA” page, select “Make FAFSA Corrections” 
    - Change your information
    - Submit your new information.
  2. Write the corrections or updates on your SAR, sign it, and mail it to the address provided on the SAR.
  3. Check with the financial aid office at the school you plan to attend to see if they can electronically make the changes for you.

I moved to a new state — what do I need to do?

Reader question: I moved to a new state since filing FAFSA.  Do I need to resubmit my FAFSA?

No, you don't have to resubmit your FAFSA. However, you may want to correct your address on your existing FAFSA. The aid you receive from FAFSA is federal, not state. Therefore, the address field does not determine aid eligibility. 

What if I don’t have a permanent address?

Reader question: I'll be traveling a lot next fall and winter after my child leaves for school. Is it OK to use a P.O. Box or my employer's address for a permanent address?

For the purposes of filling out the FAFSA, you should use the address at which you currently reside.

If you don't currently have a permanent address, you may use another address, such as a P.O. Box, where you can receive correspondence. Make sure to include your email address so communications about your financial aid application can be sent to you electronically. 

What to claim on the FAFSA when I live in a rental property?

Reader question: The home in which I live is a duplex which also serves as a rental property. The form states not to claim the home in which I live.... but it also says to claim rental properties. How do I complete this line item?

For multifamily homes and apartment buildings where the owner occupies a unit, the portion not occupied by the owner is treated as an investment asset. Only the units occupied by the family are considered to be the family's primary residence.

If the property is not deeded separately, the value of the primary residence versus the investment property can be divided using any of the following methods:

  • Number of units occupied by the owner versus the number of units occupied by the tenants
  • Square footage occupied by the owner versus the square footage occupied by the tenants
  • Number of bedrooms in each unit
  • Prorated according to the fair rental value of each unit

This allows one to apportion an estimate of the fair market value of the building. For example, in a case involving a duplex, the net market value should be divided evenly.

For more information about this, please contact Federal Student Aid (FSA) at 1-800-433-3243.

How man tax forms must I include?

Reader question: How many tax forms/bank statements must I include when I fill out FAFSA?

To complete the Free Application for Federal Student Aid (FAFSA), you'll need the following, if applicable:

  • Federal income tax returns, W-2s, and other records of money earned. (Note: You may be able to transfer your federal tax return information into your FAFSA using the IRS Data Retrieval Tool.)
  • Bank statements and records of investments (if applicable)
  • Records of untaxed income (if applicable)

Income has changed since we filed our last tax return. What can I do?

Reader question: Our income has changed since we filed our last tax return. I want my financial aid to reflect my current (decreased) income. What can I do?

If your old tax return doesn't reflect your current status, submit your FAFSA form and then speak with the office of financial aid at the school you plan to attend. If you feel that your household income has significantly changed since your last tax return, you can request special consideration. You'll be asked to submit appropriate supporting documentation to your school’s financial aid office. The Financial Aid Office will review each situation individually to determine if professional judgment should be utilized to recalculate financial need.

What to know about the Simplified Needs Test and and asset protection allowances.

Reader question: Our family income barely covers our living expenses and we can't contribute much toward college costs. Will every dollar of income we report on the FAFSA be counted toward our ability to pay for college? 

The Simplified Needs Test eliminates the asset questions on the FAFSA. A family can qualify for the simplified needs test if they have an adjusted gross income of less than $50,000.

However, if the family doesn't qualify for the Simplified Needs Test, a portion of their reportable assets will be sheltered by an asset protection allowance. This allowance is based on the age of the older parent. For most college-aged children, this allowance is around $50,000. Any remaining assets are assessed according to a bracketed scale. Nationally, parental assets affect the aid eligibility of less than 4% of dependent students. It is important to note that 14 states and the District of Columbia don't allow students to qualify for the simplified needs test or auto-zero EFC to skip the asset questions. An applicant who qualifies for the simplified needs test may still be required to report assets on the FAFSA if they live in a state involving asset information to determine eligibility for state grant programs. The asset information will be used only to determine eligibility for state grant programs. It won't be used to determine eligibility for federal student aid. Those states include Colorado, Georgia, Hawaii, Illinois, Minnesota, New Jersey, New Mexico, Ohio, Oklahoma, South Carolina, Vermont, Washington, Washington, D.C., Wisconsin, and Wyoming.

What should I do if the income on last year’s tax return exceeds our expected income this year?

Reader question: My husband earned an additional $15,000 in overtime during the prior two tax years, putting us into a higher income bracket. However, we won't have that additional income again this year. Is there a way to discuss this with someone?

You must report your family’s full income from last year’s tax return on the FAFSA, even if your income will be different going forward.

However, if you feel that this additional income will unfairly reduce your aid package, contact the school’s financial aid office after receiving your aid award letter to explain your extenuating circumstances.

If your financial aid office has an appeal process, you may be able to provide proof of this income change, which may yield additional aid consideration

Breaking down questions about parental income.

Reader question: When filling out FAFSA's questions about parental income, what do I enter if I had a loss and file a schedule C? I put zero but does that penalize us by not giving us the employment expense allowance and income protection allowance?  I also filed a Schedule 1 and technically qualify as a dislocated worker. How do I get it to let me answer those questions?”

There are a few elements to this question: First, when completing the FAFSA, it uses "skip logic" based upon the information you provided at that time.  Skip-logic functionality means applicants see only the questions that pertain to them. The use of skip-logic technology makes sure students and families answer the minimal number of questions to determine their ability to pay for college. Therefore, you cannot select and choose the questions you want to answer. The next question is based on your answer to the last question.

One FAFSA question asks: "Did (or will) your parents file a Schedule 1 with their tax return? You should have answered 'yes' to this question. The following question asks about being a dislocated worker. 

Next, the income protection allowance is the dollar amount of living expenses deducted from an individual or family’s income. The dollar offset varies by family size. The Income Protection Allowance for dependent students is $7,040. The allowance for employment-related expenses for dependent students' parents recognizes the additional costs incurred by working spouses and single-parent households. This allowance is calculated based on the marginal differences in expenditures for a two-worker family compared to a one-worker family. The items covered by these additional expenses are:

  • Food costs away from home
  • Apparel
  • Transportation
  • Household furnishings and operations

The employment expense allowance for parents of dependent students is the lesser of $4,000 or 35 percent of the lowest-earning spouse's earned income.

To answer the parental income questions, use the following information:

For tax filers, enter the combined amounts from IRS Form 1040, line 1 + Schedule 1, lines 3 and  6, + Schedule K-1 (IRS Form 1065), Box 14 (Code A). (Lines 3 and 6 and Box 14 [Code A] of IRS Schedule K-1 (Form 1065) are for tax filers who are self-employed.) Note: If the values from lines 3 and 6 or Box 14 [Code A] of IRS Schedule K-1 (Form 1065) are negative, treat them as zero when determining the income earned from work.

Do independent students need to include their parents’ income?

Reader question: My daughter is starting pharmacy school and as a graduate student is considered independent. Do I still have to include my income information on her FAFSA?

No. Graduate students, like all other independent students, aren't required to report their parents’ income on their FAFSA.

How do I handle large assets?

Reader question: When does a large asset like a second home have to be included on the FAFSA? What if it doesn’t have a mortgage and is not earning a rental income?

Any real estate owned by a parent (or the student) that isn't used as a primary residence is considered an investment by the Department of Education. The only exceptions would be if the home was owned by a non-custodial parent or if the debt owed on the real estate exceeded its current value. 

Should I include stock dividends?

Reader question: Should I include shareholder distributions (Line 17 on Form 1040) on the FAFSA?

Yes. Shareholder distributions should be included on the income portion of the FAFSA. If you're completing the form online, you can use the IRS Data Retrieval Tool to pull your income information directly from your previously filed tax return and have it automatically filled in on your application. 

What is TAP?

Reader question: I filed FAFSA before I knew about TAP. What do I do?

If you missed the link to New York State's Tuition Assistance Program (TAP) on the Web when you completed your FAFSA, you must wait until you receive either an email or a postcard with TAP's web address on the Web. You can then set up a PIN, which will allow you to access the TAP on the website, and you can complete your TAP application and have it submitted to HESC.

Note: You must reapply for TAP every year in addition to the Free Application for Federal Student Aid (FAFSA).

Should I include my retirement account when I report my investments?

Reader question: For the FAFSA question about investment income, should I report investments such as IRAs that are meant for retirement, or just 529 college savings plans?

It depends on the investment. Your retirement account as well as your primary home, vehicle, checking account, and life insurance policy don't need to be reported. Therefore you shouldn't include your IRA balance on this question.

All other investment assets should be reported, including 529 plans, investment properties, trust funds, mutual funds, stocks, bonds, and commodities should be included when answering questions both investments.

Have more questions about FAFSA?

Check out our trove of resources on how to apply, when to apply, and what kind of aid you may be eligible for through FAFSA.

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