By: Gen and Kelly Tanabe
Founders of SuperCollege and authors of ten books on college planning.

We're sure you can think of much better ways to spend a Saturday morning than filling out the Free Application for Federal Student Aid. (Organizing your sock drawer comes to mind!) But neglecting to apply for financial aid can cost you big time. In fact, a recent study found that there are currently 850,000 students in college who qualify for federal grants. Yet none of these students have received a dime from the government. The reason? They didn't apply. So vow not to leave any money on the table and make sure that you complete the FAFSA!

Do your taxes early.

If you are one of the millions of families that wait until April to start figuring out your taxes, it's time to change your ways—at least while your child is in college. The reason is simple: You'll need some of the numbers from your tax return to fill out the FAFSA. If your taxes aren't done when you start working on the Free Application for Federal Student Aid, you'll have to use estimates and update them later (causing you to do some of the calculations twice and eating up even more of your valuable time). If your taxes are done, you'll have the numbers you need.

Track down your deadlines.

When should you turn in the FAFSA? The soonest that you may submit the FAFSA is January 1st of your child's senior year in high school because the FAFSA requires tax information from the previous year. Every college sets its own deadline for the FAFSA. The key is to find the earliest deadlines for the schools to which your child is applying. Colleges often list their deadlines in the application forms. If your child's application arrives after the deadline, there may not be any funding left, even if your family deserves it.

Don't get caught in the W-2 catch-22.

As a diligent parent who plans to do taxes early and submit the FAFSA as soon as possible after January 1st, you might find yourself in a slight dilemma: You can't do taxes until you receive your W-2s, and some employers do not send them out until weeks after the end of the year. Tell your employer that you need a copy of your W-2 as soon as possible to file for financial aid. Or use your final paycheck stub from the previous year—it probably lists your cumulative earnings for the year along with taxes paid. Don't be delayed by a late W-2.

Know the basic eligibility requirements.

Before you fill out the FAFSA, make sure your family is eligible to receive federal financial aid. To receive aid, your child must …

• have a high school diploma or General Education Development (GED) certificate or pass an approved "ability to benefit" test.
  
• be a U.S. citizen or an eligible noncitizen.
  
• have a valid Social Security number.
  
• enroll in an eligible associate's, bachelor's or graduate degree program.
  
• comply with the Selective Service registration, if required.
  
• not owe a refund on a federal grant or be in default on a federal education loan.
  
• have no drug convictions.

Determine whether your child is dependent or independent.

Financial aid is typically based on both the parents' and student's income and assets. Most students entering college directly from high school are considered dependent students, which means that the parent is expected to contribute to the child's educational expenses.

You may have heard that if your child declares independence, only his or her income and assets will be considered, resulting in a larger financial aid package. This is true, but specific rules govern whether a student is considered independent for the purposes of financial aid.

A student is considered independent only if one of the following criteria applies. He or she must…

• be at least 24 years old by December 31 of the award year.
  
• be married as of the date the FAFSA is completed.
  
• be enrolled in a master's or doctoral program (beyond a bachelor's degree) during the award year.
  
• have at least one child who receives more than half his or her support from the student.
  
• have a dependent (other than a child or a spouse) who lives with the student and receives more than half his or her support from the student.
  
• be a student for whom a financial aid administrator makes a documented determination of independence by reason of other unusual circumstances.

Find out who needs to file in cases of divorce.

If the parents are divorced, the FAFSA should be completed with information from the parent with whom the child lived for the majority of the past 12 months. (It does not matter which parent claims the child as a dependent for tax purposes.) If the child did not live with either parent or spent an equal amount of time with the two parents, the parental information on the FAFSA must be provided for the parent from whom the child received the most financial support during the preceding 12 months or the parent from whom the child received the most support in the last 12-month period during which support was given. If the parent providing the information has remarried, the stepparent's information is also required. A stepparent is considered a part of the student's family and therefore is expected to contribute to the student's educational expenses.

Always file online.

The paper-based FAFSA form is being phased out in favor of the online application. To access the FAFSA on the Web, log on to the U.S. Department of Education's web site at http://www.fafsa.ed.gov. Filing the FAFSA electronically has several advantages:

• Online help for each question
  
• Built-in checking that identifies potential errors before the application is processed
  
• Faster filing that brings results within one to five days
  
• Automatic calculations
  
• Software encryption that protects your personal information

If you use FAFSA on the Web, you will need to sign the application electronically by requesting a personal identification number (PIN) at the PIN site (you can find the link at www.fafsa.ed.gov). Dependent students will need to have one parent sign the application, which means that both the student and parent must have PIN numbers. Parents may use the same PIN to sign applications for multiple children.

If you would rather sign a paper form, print out the signature page and mail it in. You will receive a PIN when your application is processed. This PIN can be used to access and sign a renewal FAFSA application for the next school year.

Students, have your information handy!

It will take one to two hours to complete the FAFSA if you have all the necessary information, including your tax return, on hand. You will need the following key information and documents:

Student data:

• Social Security number
  
• Driver's license number
  
• Citizenship and state residency
  
• Alien registration card (if you are not a U.S. citizen)
  
• Prior year's W-2 forms and other records of money earned
  
• Prior year's federal income tax return—IRS Form 1040, 1040A, 1040EZ, 1040 Telefile, foreign tax return or tax return for Puerto Rico, Guam, American Samoa, the U.S. Virgin Islands, the Marshall Islands or the Federated States of Micronesia
  
• Asset information, including bank accounts, stocks, bonds, trust funds, etc.
  
• Education history
  
• Major course of study
  
• Marital status
  
• Spouse's income
  
• Dependency status
  
• Interest in student loans and work-study
  
• List of schools the student is interested in attending

Parents, have the necessary information ready.

Parent data:

• Federal income tax return. If you haven't completed your tax return by the time you fill out the FAFSA, use W-2 forms and other supporting documents. You may use estimates and update later.
  
• Past year's untaxed-income records—Social Security, Temporary Assistance to Needy Families, welfare or veterans benefit records
  
• Current bank statement
  
• Current business and investment mortgage information
  
• Business and farm asset and balance sheet records
  
• Asset information, including bank accounts, stocks, bonds, mutual funds, etc.
  
• Marital status
  
• Level of education
  
• State residency
  
• Age

Know where to get more help.

If you need help completing the FAFSA, visit the U.S. Department of Education web site at http://www.fafsa.ed.gov or call 800-4-FED-AID. The web site will take you step by step through the entire process. You may also want to contact the financial aid offices at a few local colleges since many hold free workshops to help students complete the FAFSA.

Final Thoughts ...

Filling out the FAFSA may ruin your plans for Saturday morning. But it won't be impossible. The hardest part may be gathering all the information you need. Once you actually start filling out the forms, you'll be surprised at how quickly it goes. And remind yourself that by taking the time to complete this application, you're making sure that you get every dime in financial aid that you deserve.