The FAFSA season is approaching and families will begin navigating this process. Last year, the FAFSA was filled with missed deadlines and incorrect information due to FAFSA Simplification. The DOE has listed a FAFSA 2025-26 Launch date so we are hoping for an easier FAFSA process this year.
Simple mistakes can cause a family’s Student Aid Index (SAI) or the former (EFC) to be much higher. They can disqualify the student for need-based financial aid. PayForED hopes to minimize these mistakes and reduce 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 financial outcome of the college decision.
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 that the Department of Education uses. 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 2025-26 FAFSA, the tax information will be 2023 tax return data. This will be critical for dependent students to know, as the student needs to initiate the FAFSA process. If the parents have filed their taxes as married and separate, then both parents will need an FSA ID. For parents who have filed married and joint, only one parent will need an FSA ID since both parents’ information is linked to one tax return. It is recommended that you establish your FSA before the FAFSA submission process.
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 first-time FAFSA filers use a financial aid calculator to estimate their financial aid position or SAI. This number is called the Student Aid Index or SAI. The Student Aid Index (SAI)replaces the EFC or Expected Family Contribution under FAFSA Simplification. The SAI number is generated by completing the FAFSA.
It would be best if you did an estimate first because 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 like the College Cost Analyzer or another tool, you will get an estimation of the SAI generated by the new 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 a college financial aid office receiving your FAFSA. You cannot change any financial information imported into the system; only the college financial office can make that adjustment after correctly submitting the required documentation.
Using the Right Tax Year
The FAFSA process uses a term called Prior Prior. This term means the FAFSA information will use the taxes that you should have in hand starting on October 1 of that year. The 2025-26 FAFSA submission will use 2023 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 usually takes the IRS data 4 – 8 weeks to become available for the DOE integration, depending on your method of tax submission. If you had 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 recognized 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 since it was pushed back to sometime in December. 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 401k, 403b, 457 plan, or traditional IRA could be included as income on the FAFSA with the IRS integration. You will need to contact each college’s financial aid office to resolve this if it does occur.
Asset Reporting for FAFSA
The assets reported on the FAFSA need to use the value at the time of submission and not based on the tax year. The FAFSA should only include taxable savings and investment accounts, all children’s 529 plans, and business value. Items to exclude are retirement accounts and home equity. Some colleges have a secondary process that may ask for additional financial information that is excluded from the FAFSA.
Leaving Blank Spaces
We recommend that you do not leave any fields blank. Put 0 or NA in any fields that are not applicable.
Reporting of Child Support As an Asset
A new 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, not biology. 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 for 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. It appears that the FAFSA data feed to the state program will resume for this year’s FAFSA. The prior year’s FAFSA link was not working due to various problems. I would confirm that with your state’s 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 servicers’ contact information should match the StudentAid site and tax information.
Summary of the Most Common FAFSA Errors and Issues
We recommend that every college-bound student complete the FAFSA. It tells colleges 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.
Make sure you sign the FAFSA using the proper 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 was processed, and it will generate a report called the FAFSA Submission Summary or FSS. The new FSS form replaces the Student Aid Report (SAR) under FAFSA Simplification.
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 custom to specific situations. If you need a financial professional trained in college funding and student loan planning, please visit Our Find An Advisor webpage.
