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Filing this key form in October can double the amount of money you get for college

Twenty/20

Starting October 1, families can file the Free Application for Federal Student Aid (aka, FAFSA) for the 2020-2021 academic year. Yes, for next fall. And if you want to get more money for college, it helps to get the form in early.

The FAFSA matters so much because colleges and federal and state governments review it to figure out how much financial aid you can get. It informs their decisions about need-based grants and, often, merit scholarships. You'll also need to fill it out to apply for federal student loans.

Don't make the mistake of waiting too long: It's important to get the form in as soon as you can.

"We've always said that, the sooner you can file, the better," says T. Eric Reich, a certified financial planner and president of Reich Asset Management in Marmora, New Jersey. "That's when the school has the most money — at the beginning."

States and colleges set their own aid deadlines, often within months of when the FAFSA form becomes available — and it's not unusual to see them dole out aid on a first-come, first-served basis.

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Why it's so important to fill out the FAFSA early

"If you wait, you may miss out," says Mark Kantrowitz, publisher and vice president of research for SavingForCollege.com. "Students who file the FAFSA within the first three months tend to get twice as many grants, on average, as students who file later."

The bottom line, he says: "There will be less money available for students who file in December than those who file in October."

How to get ready to file the FAFSA

Expect to spend about an hour gathering key forms and getting ready to file, and then another 30-60 minutes actually filling out the form, Kantrowitz says.

Don't try to fill out the FAFSA without that advance legwork, Reich says. "That's when I find people tend to make the most mistakes," like providing incorrect numbers or putting a detail on the wrong line, he says. "They're trying to compile way too much information in real time."

On the other hand, he says, "if you have everything ahead of time, you're not scrambling as much."

Here's how to prepare so you're ready to file the FAFSA early:

  • Review your finances. The FAFSA looks at your income from prior years — on the 2020-2021 form, your income from 2018 — but it considers your assets as of the date you file. So there are a few last-minute money moves you can make that could increase your chances of getting college aid, Kantrowitz says. For example, it's smart to make any planned debt payments ahead of filing, which reduces the amount of assets you have to declare.
  • Gather key documents. Those include Social Security numbers (for parents and the student), your family's most recent financial account statements, and the student's driver license number, among others. You'll be able to use an IRS Retrieval Tool to download your 2018 tax information to the FAFSA, but it can help to have a copy on hand as backup, Kantrowitz says.
  • Sign up for an FSA ID. The student and parents each need an FSA ID, which serves as "a secure digital signature" on the FAFSA forms, Kantrowitz explains. Register for those in advance. If you've filled out the FAFSA in a previous year, now's the time to track down that ID. "Too often, people forget it," he says, and it can be challenging to reset.

Your payoff for those two hours of effort preparing for and filing the FAFSA can be substantial. One 2017 study estimated that students who don't file the FAFSA are missing out on almost $10,000 each year in aid, including roughly $2,300 that doesn't need to be repaid.

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