College Tips: Parents, get ready to tackle the FAFSA

The college application process is often emotional, with students sizing up their choices based on their gut feelings. But there's an important financial side to the decision: How are we going to pay for it?

For most families, that conversation begins with the federal financial aid application, known as the FAFSA.

Edward Bove is College Planning Director and a founding member of Ducerus, a national organization that works with families on all aspects of college admissions and financial aid. Based in Union, Bove has more than 23 years of experience as a financial advisor and tax professional. And all three of his children are currently in college.

Here, he answers the basic questions about the FAFSA

Q. What is the FAFSA, and what information does it want?

The Free Application For Federal Student Aid (FAFSA) is the form used to determine the amount of money a family is expected to contribute toward college costs. Your financial need is difference between the cost of a particular college and this Expected Family Contribution (EFC). You are required to submit the FAFSA every year you attend college to qualify for federal grants, loans and work study. Most states and colleges also use it for their own aid programs.

The FAFSA seeks both personal and financial information for dependent students and their parents. (Independent students do not need to provide parent information.) You will need to provide obvious information like name, address and Social Security number, and some not so obvious information like the date the parents were married or divorced. Required financial information includes earnings, adjusted gross income, savings and the net worth of certain investments.

Q. Is the FAFSA just for lower income students and their families? Is there a maximum family income that makes it not worth the effort?

Not at all. In fact, you can make a comfortable six-figure income and still qualify for need-based aid. Because the FAFSA is based on a complicated formula called the Federal Methodology — does the federal government ever do anything that isn't complicated? — there is no specific income cutoff. In addition to income, there are many other factors that determine your eligibility for aid including certain assets, the size of your family and the number of students attending college at the same time. Even if you're not sure you will qualify for aid, it always is worthwhile to submit the FAFSA. In fact, you can't obtain federal loans without filling one out.

Q. It has a bad reputation for being a pain to complete. Is that fair?

It is a reputation that is well deserved. While it appears simple at first glance, it is anything but. Filling out the FAFSA is like tiptoeing through a mine field. One wrong move and you're a goner. For example, one question asks for the net worth of the parents' investments, including real estate. However, if you fail to read the question carefully, you may not realize that you are not supposed to include the value of the home in which you live. That has proven to be a very costly error for many an applicant who has mistakenly included the value of their home.

Q. Should I wait until I complete my 2013 tax return before submitting the FAFSA?

Absolutely not! It is much better to submit the FAFSA early using income estimates, than it is to wait until you have exact figures. In fact, you are allowed to go back and update the FAFSA after you have filed your tax return. So there is no reason to wait. Most colleges have a February 1st "priority deadline" for submitting the FAFSA. You'll get the best aid package if you get it in by that date since aid is dished out on a first come, first served basis. It's like going to a party: You want to get there early while there are plenty of refreshments to go around, not later when there are only crumbs left on the table.