For Arturo Colmenares, a Truckee High School grad, going to college was a lifetime goal. To help fund this dream, high school counselors hosted an online practice run, where he was guided in how to fill out the Free Application for Federal Student Aid, otherwise known as the FAFSA. It took about 20 minutes. The result: He was awarded several grants and simultaneously qualified for student loans.

If you or your child are college-bound, here’s is a must-do step: Fill out the FAFSA. This standardized application form for student aid used by federal and state governments, as well as most colleges and universities, is completely free and could translate into hundreds or even thousands of dollars.

Colmenares is now a sophomore at University of Nevada, Reno, studying Early Childhood Education with a minor in Special Education. He believes that being at college is the best way to jumpstart his career and is the first in his family to go to college.

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Each year, the FAFSA application submission window opens on Oct. 1. Currently, applications for academic year 2021/22 can be submitted. The sooner applications are received, the better. This is because, in some instances, a particular type of aid may run out. Also, schools often distribute student aid on a first-come, first-served basis. Data does show that the number of families filing the FAFSA have declined in recent years and in fact, $2.6 billion went unclaimed in 2018. However, due to the economic fallout caused by the COVID-19 pandemic, there is the possibility of an increased need for financial aid.

There are a number of application deadlines that may be applicable. For the 2021/22 academic year, the federal deadline is 12 a.m. CST on June 30, 2021, but again, keep in mind that applying early may mean catching certain funds before they run out. Some states have earlier FAFSA deadlines. For instance, California’s is March 2, 2021, and some schools have their own unique ones. Missing the deadline(s) is not a good thing as a student will be unlikely to qualify for federal, state, or school aid until the next academic year.

Undergraduate, graduate, and professional students may apply for student aid using the FAFSA. Eligibility requirements include having a Social Security number or Alien Registration Number, obtaining a high school diploma or equivalent, and male students must have registered with Selective Service.

Eligible colleges and universities include 4-year, 2-year, and less than 2-year institutions that offer degree and certificate programs. This applies to associate degrees, not just bachelor’s, and includes public, private nonprofit, and private for-profit universities and institutions.

The types of federal aid that may be awarded based on the information provided on a FAFSA comprises Federal Pell Grants, Federal Stafford Loans, Federal Supplemental Educational Opportunity Grant, and Federal Work-Study Program.

EVERYONE’S DOING IT: FAFSA isn’t just for people who want or need student loans. It’s also used to qualify for aid that you won’t have to pay back, like college scholarships, grants, and even work-study funding.

Filing a FAFSA is a simple process. However, it does take some time and forethought. First thing to know is that there is no cost or fee. Filing can be done in one of three ways: online at fafsa.gov, through a mobile app available for both iOS and Android, or by submitting a good old paper application. You will need some personal identifying information of the student applying; name, date of birth, social security number, driver’s license number (if you have one). Tax return information will be required along with balance information on bank accounts, investment accounts, and such. If the student is a dependent, then the parent’s information will also be required.

While completing the FAFSA, at least one school must be listed. Online or in the mobile app, up to 10 schools can be listed, but only up to four if using a paper application. The schools named will use the information submitted to determine the types and amounts of aid for which a student qualifies. For federal aid, it does not matter the order in which the schools are listed. However, some states require a specified order. While California does not, to be considered for state aid, an aid-eligible state school must be included. Nevada has a similar requirement.

A common myth is that submitting a FAFSA will negatively impact the ability to qualify for financial aid or be accepted into a particular school. The truth is, the FAFSA can only help. Even if a family is well off, the only way to know if a student qualifies for aid is to submit the FAFSA. Don’t assume that just because someone may have the means to pay for college that aid is not available. Further, some schools require a FAFSA to be submitted to receive merit-based aid such as scholarships. The information contained in the FAFSA will not cause a school to revoke a scholarship.

The internet contains a wealth of information on the FAFSA. Two very good resources are fafsa.gov, mentioned earlier, and savingforcollege.com. Another excellent resource might be your student’s guidance counselor, as Colmenares learned.

~ This article is meant to be general in nature and should not be construed as investment or financial advice related to your personal situation. Please consult your financial advisor prior to making financial decisions. John Manocchio is a financial advisor with Waddell & Reed and can be reached at (530) 412-3757. Waddell & Reed, Inc. Member FINRA/SIPC. 01/21

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