How to Apply for FAFSA Student Financial Aid, and What Myths About the Program You Shouldn't Believe

FAFSA (Free Application for Federal Student Aid) — it Free Application for Federal Student Aid in the United States. This form is used by students (or their parents) to apply for various types of financial aid to help pay for college or university. Five Common Myths About the FAFSA is written by US News.

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Myth 1: My parents' income is too high

According to the annual Sallie Mae/Ipsos poll How America Pays for College, 63% of undergraduate families with incomes of $150 or more declined to file a FAFSA for the 000–2023 school year because they believed their income was too high to qualify for any aid.

However, there is no income threshold for filing the FAFSA, and completing the form is free.

“The FAFSA is not only an application for federal student aid, it’s also an application for federal student loans,” said Katie Conrad, executive director of the Georgia Tech Office of Scholarships and Financial Aid. “And you don’t even have to demonstrate financial need to qualify for an unsubsidized student loan or a Parent PLUS loan.”

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Some states and colleges use FAFSA information to award scholarships or grants.

“While you may not be eligible for a federal Pell grant, depending on the school you attend, you may be able to demonstrate financial need at a more expensive institution — a school with a higher cost of attendance — even if your FAFSA student aid score is higher,” Conrad explained.

Myth 2: Having illegal parents disqualifies you from filing the FAFSA

Having undocumented immigrant parents "may add a few steps to the FAFSA process, but it shouldn't stop you from applying," said Kate Wood, a credit expert at NerdWallet.

Can I create an FSA ID without a Social Security number?

Participants—a parent, stepparent, spouse, or anyone else required to provide information on a student form—can create an FSA ID without a Social Security number. The FSA ID is used to create a StudentAid.gov account and serves as the applicant's electronic signature.

Additional questions may be asked to verify the participant's identity. When prompted to complete the FAFSA, students should select the box indicating that the participant does not have a Social Security number. Individual Taxpayer Identification Numbers (ITINs) should not be entered in the Social Security number box.

"It used to be recommended to enter all zeros," Conrad said. "That's no longer required. You just check the box if the parent doesn't have a Social Security number."

When creating an FSA ID, the Executive Director of the Office of Scholarships and Financial Aid recommends that you take screenshots of the information you enter and ensure that it matches your demographic information.

"If there is a discrepancy, even in such a small thing as the spelling of Drive in full or abbreviated as Dr., it will lead to a mismatch," the official warned.

Can FAFSA be used to prosecute illegal parents?

"While the FAFSA is legally only supposed to be used to determine financial aid, the new administration has left many students concerned that their data could be accessed by other agencies," Wood explained. "At this point, it's pure speculation, but at the same time, no one can guarantee anything."

Myth 3: Filing the FAFSA means I agree to pay something.

Filing the FAFSA does not mean a student or parent agrees to pay anything, experts say.

“You’re simply providing your financial information,” Wood said. “When you sign the FAFSA, you’re certifying that the information you’ve provided is correct. You’re not signing a bill. You’re not signing a delivery note. You’re not ordering anything.”

Myth 4: Saving for college will hurt your eligibility for federal aid

Savings count on the FAFSA, but they are "looked at pretty favorably," said Martha Kortiak Mert, chief operating officer of Saving For College, an organization that helps families pay for college.

“Overall, they have a minimal impact,” she said. “The reality is that most families will be much better off if they have some money set aside to supplement any financial aid they may receive, which will likely be student loans.”

For example, a 529 plan — whether owned by a parent or a student — is considered a parent asset on the FAFSA. Parent assets make up a maximum of 5,64 percent of the FAFSA formula, compared with 20 percent for student assets, according to Kortiak Mert.

The sooner you start saving for your education, the better, she says.

"You'll benefit not only from the money you contribute, but also from the compound interest that accrues on your investments in a 529 plan," she concluded.

However, experts say it's never too late to start saving.

"If you haven't started saving yet and your child is already in high school, you still have four years ahead of you," Kortiak Mert noted. "By setting aside a certain amount each month, you'll have time to save a decent amount."

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Myth 5: All offers of help should be accepted

In a 2024 NerdWallet survey, 36% of respondents regretted the amount they took out in student loans. In the same survey, one in five borrowers said they took on more debt than they needed simply because they were offered it.

When you're offered any form of financial assistance, you're under no obligation to accept it, Wood advises.

“You can accept everything,” she says. “You can accept nothing. You have the right to say, ‘I want this grant or this scholarship, but I don’t want this loan.’ It’s really your choice. … You’re not committing to anything just because you submit the FAFSA or get a grade or an offer. You’re not committed to it until you accept the offer, in whole or in part.”

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