Finding Money for College Begins with the FAFSA
There’s no doubt that early planning and saving help when paying for college, but other resources are available. After calculating the personal resources you and your student are able to contribute toward college costs, financial aid offered by the federal government is the primary outside source of funding. It can be obtained only by completing the Free Application for Federal Student Aid, or FAFSA.
Read more about National College Savings Month and a chance to win money for college in a guest article from Treasurer of State, Roby Smith.
Understanding the Process
- A financial plan is essential.
By now your senior should have a short list of colleges or programs based upon the anticipated career plan and major. A key component to your financial plan is determining the total cost for the entire length of attendance, not just the first year. College is an investment — knowing the full cost as well as the resources that will be used to pay for it is the starting point. - Completing the FAFSA isn’t complicated.
The FAFSA may appear daunting at first glance, but it’s simplified if you take it step-by-step. By completing the FAFSA, you and your student are essentially applying for all of the federal student aid programs —grants, work-study and loans. Students and parents can receive free individualized assistance completing the FAFSA from an advisor at ICAN by scheduling a January 2025 FAFSA appointment when scheduling opens in mid-November. Take a moment to review the helpful tips and directions available on the FAFSA website. - You and your student need your own StudentAid.gov accounts.
The FAFSA collects demographic and financial information about you as the parent or guardian as well as your student. Therefore, the student and one parent in the household each need a unique account to electronically sign the FAFSA every year your student is in college. Additionally, your student will use it during and after college to access various federal websites related to any federal aid that was received, such as loans or the TEACH Grant. Your student may wish to use an email address different from a high school email and establish a unique password and challenge questions. Also be sure to tie a cell phone number to each ID account in case it needs resetting at a future date. It is now necessary to have your StudentAid.gov account before completing the FAFSA. Therefore, it would be very beneficial to take care of this step now.
What Happens Next
- Collect the proper documents.
Prior to completing the FAFSA, it’s important to have certain documents readily available to streamline your experience. The FAFSA form uses a prior-prior tax year methodology. For example, to apply for financial aid for your student’s first year in college (2025—2026), you will use your 2023 federal tax return when the FAFSA becomes available in December 2024. Federal tax information (FTI) can be imported into the FAFSA using the Direct Data Exchange. - Be ready to file the FAFSA when it opens in December.
College financial aid officers and ICAN advisors are currently researching the new 2025—2026 FAFSA in order to help families with questions and concerns. - The government will analyze your information.
The FAFSA uses several complicated formulas to analyze all of the data placed into it, with special concentration on the income and assets of both the parent(s) and student, the number of household members, and the age of the older parent. All of this data is factored into the Student Aid Index (SAI). This number and your FAFSA results are sent to all the schools (up to 20) your student listed on the FAFSA. Their financial aid offices individually determine your student’s financial need for their school and thus award financial aid. Each school uses their cost of attendance and subtracts the SAI to determine financial need. - Understand that being selected for verification requires extra steps.
One of every three processed FAFSAs is usually selected for a process called verification. Be assured it doesn’t mean your form wasn’t correctly completed. Rather, it means the college’s financial aid office will request additional paperwork from you, such as copies of signed tax returns, completed verification worksheets, and others. If selected, be sure to promptly return any requested documents as quickly as possible. Federal aid cannot be disbursed until verification is completed. - Don’t forget about the state’s application.
In addition to the federal government, the state of Iowa has financial aid programs available to Iowa students. The Bureau of Iowa College Aid administers various scholarships and grants. Their application is available through a separate link at the conclusion of the FAFSA application, as well as on their website.
What You and Your Student Can Do Now
- Set up your individual StudentAid.gov accounts.
Go ahead and set up your and your student’s ID accounts in advance of the FAFSA application becoming available. - Review the list of colleges.
The FAFSA results are sent directly to the colleges your student lists on the FAFSA, and each financial aid office will review and notify you of any additional steps to take before sending a financial aid offer. Up to 20 colleges can be listed on the FAFSA; however, most schools send offers only to students who have been accepted to their school. Now is a good time to make a final decision about which schools’ applications your student will complete. Also pay attention to the priority date each school has for filing the FAFSA. It may be a tight deadline with the FAFSA opening in December! - Get familiar with school websites.
College websites are typically very professional and robust. You should be able to find admission requirements, scholarship opportunities, billing and financial aid procedures, residence and student life, academic and support services, and more using their search features. Spend some time familiarizing yourself with the admissions and financial aid pages before calling or emailing their offices. More than likely, an FAQ area can answer your questions and save you the time spent waiting on hold or for an email response.
ISave 529 Celebrates College Savings Month with $5,290 Giveaway
College Savings Month, celebrated each September, is a national effort to encourage families to start thinking about saving for future education costs. To celebrate, ISave 529, formerly College Savings Iowa, is giving one lucky Iowan a $5,290 boost to their education savings! All you have to do is visit Iowa529Contest.com and register before the end of September. All Iowa residents with a child or grandchild under 18 years old are eligible.
Given the increasing costs associated with all forms of education, ISave 529 offers families a way to save for their children’s future, wherever their educational journey takes them. Funds saved in an ISave 529 account can be used for tuition at any eligible education institution in the U.S. or abroad, including colleges, universities, apprenticeship programs, trade schools, K-12 schools and more. But did you also know funds can be used for qualified education expenses beyond tuition at post-secondary institutions, including room and board, books, a computer and supplies? An additional perk for Iowa taxpayers is a state income tax deduction of up to $5,500 in contributions per Beneficiary account in 2024!
With more than $6.2 billion in assets and $5.1 billion already withdrawn for qualified education expenses, families across the U.S. have experienced the benefits of saving for education costs with the ISave 529 plan. It’s easy to see how invested Iowans are in the education of current and future scholars in their lives. To see everything the Plan has to offer, I encourage you to visit ISave529.com or contact us at (888) 672-9116. Happy saving!
Sincerely,
Roby Smith
Iowa State Treasurer
About the Author: Roby Smith is the State Treasurer of Iowa and administrator of the ISave 529 education savings plan. He serves as the State’s banker, coordinates bonding and invests Iowa’s money. Treasurer Smith is also the administrator of Iowa’s unclaimed property and Iowa’s ABLE plan for individuals with disabilities. To learn more about the Treasurer, visit IowaTreasurer.gov.
For additional details about ISave 529, read the Program Description.
ISave 529 and the ISave 529 logo are trademarks of the Iowa Educational Savings Plan Trust.
College Savings Iowa and the College Savings Iowa logo are trademarks of the Iowa Educational Savings Plan Trust.
Next Steps
Be sure to complete the survey questions at the end of this article to be entered into the 529 deposit giveaway!
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