FAFSA is the Free Application for Student Aid. It is the official application that you must submit if you plan to apply for or accept federal student loans to pay for your undergraduate or graduate education. Even some private student loan lenders require a FAFSA form. FAFSA determines how much and what type of aid you're eligible to receive, so it is a critical application. It can be overwhelming for students, typically young adults making their first significant financial commitment.
Exemptions on the FAFSA form can be particularly complicated, so you must ensure you include them correctly. Thankfully, there are many examples of exemptions and answers to frequently asked questions about the FAFSA form.
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What Is an Exemption on FAFSA?
Exemptions on the FAFSA are similar to exemptions for tax purposes. They are types of income that will not be considered when determining aid eligibility. The purpose of the FAFSA is to help the government evaluate each student's need for aid to pay for their education. To determine your eligibility, the government assesses your family's income (which may be just yours if you're independent), expenses, living costs and other particular circumstances. With that in mind, it can be helpful to think of exemptions as reasons you might need more aid despite your income.
While your family's income may appear high, if circumstances beyond your control consume a lot of that money, the Department of Education wants to consider that so that more people can afford an education. Examples of exemptions can help you clarify what an exemption is and also help you determine if you might be eligible for one.
Examples of Exemptions on the FAFSA
First, any exemptions on your income taxes will also be considered FAFSA exemptions. You receive income tax exemptions for every member of your family. In addition, veterans and anyone in your household who cannot provide at least half their support are dependent and therefore qualify for an exemption. When you fill out your FAFSA, you'll find your exemptions on Form 1040, line 6d.
Specific types of income and assets are exempt from consideration on the FAFSA. These include a family home, a family farm, a family-owned business with less than 100 employees and other personal assets, like cars, antiques and other possessions. These items being explicitly defined as exemptions means that the value of those items will not be considered when the government evaluates what it thinks you can afford to pay toward your college tuition. Additionally, if your family's situation has changed, Federal Student Aid mentions that you may be eligible to adjust your FAFSA form.
FAQs and Tips for Filling Out Your FAFSA
What do you need to complete the FAFSA? To complete the FAFSA application, you'll need your family's most recent tax return. The applicant (the student) needs a valid form of ID (a driver's license or passport are the best), a W-2 and other sources of proof of income. You will also need Social Security numbers for everyone in your family.
Do you have to include your parents' income on the FAFSA form? According to Federal Student Aid, if they still claim you as a dependent when they file their income taxes, you must include it. You may also need to include them in some cases, such as if you live at home. These situations are common for undergraduates and less common for graduate students.
When should you complete the FAFSA? You must submit FAFSA applications by the deadline, which usually falls at the end of June for the upcoming academic year. It's a great idea to fill it out early. Filling out a FAFSA does not obligate you to accept any loans or aid.