The FAFSA season is approaching, and families will begin navigating this process. The FAFSA will be available on October 1, 2025.
Simple mistakes can cause a family’s Student Aid Index (SAI) to be much higher. They can disqualify the student for need-based financial aid. PayForED aims to minimize these mistakes and alleviate the stress during the financial aid season by compiling a list of the most common FAFSA errors and issues.
The PayForED College Cost Analyzer software also provides the transparency missing from the financial aid process by providing an estimate for families. Students and parents need to focus not just on admission but on the economic outcome of the college decision, especially under the new federal student loan limits.
Here is a list of the 10 most common errors and issues to avoid:
Create Your FSA ID and Password First
To complete and sign the FAFSA, all contributors must have an FSA ID. You need to create the FSA ID before starting the FAFSA. The FSA ID (or Federal Student Aid ID) is the login and electronic signature process used by the Department of Education. Students, parents, and borrowers use the FSA ID to apply for federal student aid, sign their FAFSA, and access any federal student aid records online.
With the mandatory link to the IRS data, your tax filing decision will determine who will need an FSA ID based on the tax filing year. For the 2026-27 FAFSA, the tax information will be 2024 tax return data. The dependent students will initiate the FAFSA process by creating their FSA ID. If the parents have filed their taxes as married and separate, then both parents will need an FSA ID. For parents who have filed jointly, only one parent will need an FSA ID, as the information of both parents is linked to a single tax return. Establish your FSA ID before the FAFSA submission process begins is recommended.
For divorced and separated families, the parent who will be submitting the FAFSA should be the one with the FSA ID and Password. Under FAFSA Simplification, some situations require both parents to get an FSA ID.
The applying student should be listed on their tax return if they are a dependent child. Ensure the student uses a personal email and not their high school email. The email address is needed for future use in FSA ID password recovery and resets.
First-time filers Should Use a Tool to Estimate Their Financial Aid Position
We recommend that first-time FAFSA filers use a financial aid calculator to estimate their financial aid position or SAI. This number is referred to as the Student Aid Index or (SAI). The SAI number is generated by completing the FAFSA.
It would be best to get an estimate first, as the IRS data integrates directly into your FAFSA, and you will not be able to see the data imported. By using a financial aid calculator, such as the College Cost Analyzer or another tool, you will obtain an estimate of the SAI generated by the FAFSA method.
After submitting the FAFSA, the SAI is generated. You can confirm if the SAI looks correct if you have a second tool. If there is a significant difference, we recommend contacting the Student Aid Help desk or the college financial aid office that receives your FAFSA. You cannot change any financial information imported into the system; only the college financial office can make adjustments after submitting the required documentation correctly.
Using the Right Tax Year
The FAFSA process uses a term called Prior Prior. The 2026-27 FAFSA will be available for submission starting October 1, 2025 and will use 2024 tax data. If you have filed for a tax extension, the new required import of IRS data may cause a delay in the FAFSA submission. It typically takes the IRS data 4 – 8 weeks to become available for DOE integration, depending on your method of tax submission. If you have a change in your marital status or income, you will need to submit an appeal to each college with an explanation.
Retirement Account Rollovers
Due to how the IRS system recognizes retirement rollovers, this amount is commonly identified as income when you use the FAFSA system. This error is expected to be corrected under the FAFSA Simplification Upgrade.
We have yet to see the new system. This issue is one reason why you should have a second calculation of your SAI.
This error has been a recurring issue for many FAFSA filers and could significantly impact your financial aid positioning. Any money rolled over from a 401 (k), 403 (b), 457 plan, or traditional IRA can be included as income on the FAFSA through IRS integration. If this arises, you will need to contact each college’s financial aid office to resolve it.
Asset Reporting for FAFSA
The assets reported on the FAFSA must use the value at the time of submission, not the value from the tax year. The FAFSA should only include taxable savings and investment accounts, and all children’s 529 plans. Small family business and farm values have been removed as a reported asset. Items to exclude as parent assets are retirement accounts and home equity. Some colleges have a secondary financial aid process that may require additional financial information excluded from the FAFSA.
Leaving Blank Spaces
We recommend that you complete all fields. Put Zero or NA in any fields that are not applicable.
Reporting of Child Support As an Asset
A FAFSA simplification change is that paid child support received will be reported in the asset section of the FAFSA. This change will significantly reduce the impact of that number since assets are weighted at 5.64% rather than the much higher income allocation.
Reporting of Step-parents’ Information
For divorced parents, if one or both have remarried, the FAFSA requires the household’s income, disregarding the parents’ biological status. In this case, the FAFSA-submitting parent must include the new spouse’s income and assets in completing the FAFSA.
Knowing Your State’s FAFSA Deadline
Most states use the FAFSA as part of their financial aid granting process. Each state’s deadline is different. Many returning college students need to pay more attention to their state’s submission date. The FAFSA data feed is used for the state program.
Keep your StudentAid.gov Contact Information Current
With the new IRS Opt-in function, we recommend keeping your contact information on the StudentAid.gov site up to date and matching it exactly with your IRS mailing information. For example, if your address on your tax return has an abbreviation, your contact information should match if it is current.
Once you are in repayment, you will work with a loan servicer. The loan servicer’s contact information should match the information on the StudentAid site and tax records.
Summary of the Most Common FAFSA Errors and Issues
We recommend that every college-bound student complete the FAFSA. It informs colleges of your ability to pay and helps families structure debt properly. The FAFSA process has the reputation of being overwhelming, but if you take your time and avoid the mistakes listed above, it can be very manageable.
Ensure you sign the FAFSA using the correct FSA ID and password. Once you complete the FAFSA, you will receive a submission notification on the screen. You should save that. Within a few days, the student will receive an email notification that the FAFSA has been processed, and it will generate a report called the FAFSA Submission Summary (FSS). The new FSS form replaced the Student Aid Report (SAR).
The FSS will list all the information submitted, excluding the tax information imported from the IRS. Only the school’s financial aid officer can see that data and make adjustments. If an adjustment is needed, contact each college to inform them. Each school can use the same adjustment or create a new one for its financial aid decision.
The FAFSA and financial aid process is another step in making the right college decision. PayForED’s suite of solutions helps students and parents make informed college decisions tailored to specific situations. If you need a financial professional trained in college funding and student loan planning, please visit Our Find An Advisor webpage.
