FAFSA Acronyms: Decoding Your FAFSA

Some of the language of the FAFSA (Free Application for Federal Student Aid) may be unfamiliar to you. There are plenty of FAFSA acronyms you may not recognize. To help you decode FAFSA language, here are a few acronyms to familiarize yourself with as you go through the college financial aid process.

  • COA – Cost of Attendance (COA) is an estimate of the educational expenses for a particular college or university. The amount includes tuition, fees, room and board, books and supplies, and miscellaneous expenses. Every school will have a different COA, but schools will list their COA on the award letters they send to students.
  • DRN – A Data Release Number (DRN) is a number that is assigned to your FAFSA. The DRN will help financial aid officers and customer service representatives locate your application and make changes, if necessary. You can find your DRN in the upper right hand corner of your Student Aid Report (SAR) or on your FAFSA confirmation page.
  • DRT – The IRS Data Retrieval Tool (DRT) is a part of the Financial Information section of the FAFSA form. It allows you to transfer your tax return figures from IRS.gov onto your FAFSA application. Instead of manually entering tax data on the form, use the DRT to automatically enter the information. The tool connects to IRS.gov and locates the correct tax return. Once you click the “transfer now” button, the IRS will transfer your information into FAFSA.gov. Questions that have been answered by the DRT will populate with this response: “Transferred from the IRS.”
  • EFC – An Expected Family Contribution (EFC) is a number that’s used by financial aid offices to determine your federal student aid eligibility. All the information you report on the FAFSA helps calculate your EFC. The EFC is not the amount you’ll have to pay for school or how much aid you’ll receive. It’s a number that helps financial aid offices calculate your financial aid package.
  • FSA ID – A Federal Student Aid Identification (FSA ID) is your username and password for filling out the FAFSA. It also serves as your electronic signature on the application. This ID allows you to return to the application at a later date, utilize the Data Retrieval Tool and access your financial aid history. The student and one parent will need an FSA ID.
  • SAR – A Student Aid Report (SAR) is a form that you’ll receive after you’ve submitted your FAFSA. It’s a summary of all the information you entered on the application and a general overview of your federal student aid eligibility. You may receive a paper or electronic version of your SAR. You can always access it by logging into FAFSA.gov with your FSA ID. It will also report your EFC.

What is Verification?

After completing your Free Application for Federal Student Aid (FAFSA), you will receive an email with a link to your Student Aid Report (SAR). The SAR is a document that recaps the data you provided on the FAFSA and offers some basic information about your eligibility for federal financial aid. On this SAR, you may read that you’ve been selected for verification. Typically an asterisk appears next to the Expected Family Contribution (EFC) number near the upper right corner on the SAR, which indicates your information must be verified.

Verification is a process in which the school’s financial aid office must confirm the information provided on your FAFSA is accurate. About one-third of all students are selected for verification because questions may have been left blank, the data provided is inconsistent, or they’re just randomly chosen. If this happens, don’t worry. The financial aid office at the schools you’ve applied to will contact you and request additional documentation they’ll need to complete the verification process. Be sure to respond promptly and meet all deadlines set by financial aid personnel.

After you submit the requested materials to your school’s aid office, follow up with them to ensure it’s been received. Remember, you must complete the verification process in order to receive any federal or state student aid. If you have questions about the process, contact your school’s financial aid office.

 

IRS Data Retrieval Tool Outage

Please be advised that the IRS Data Retrieval Tool (DRT) will be unavailable Saturday, Jan. 12, from 5:00 a.m. to 11:00 a.m. Central Standard Time. The DRT is used for transferring student and parent tax information from the IRS to the FAFSA application. During this outage, users may still access and complete the FAFSA. However, if any action requires entry of federal tax information, it must be provided manually. Applicants may wish to complete the FAFSA after the outage is over.

What to Expect with the New IRS Form 1040

Have you heard? There’s a new 1040 form coming, and it will be available for the 2018 tax year. Here’s a brief summary of the changes to the form.

  • The new 1040 replaces the current form, as well as form 1040-A and 1040-EZ. All taxpayers will now be using the same form.
  • The new form contains 23 lines; the 1040 for tax year 2017 contained 79 lines.
  • More schedules/forms will now be available. According to the IRS (Internal Revenue Service), they used a ‘building block approach’ when drafting these changes. All filers will now use the new 1040, and those with more than the basic details to report will attach one or more schedules or forms to their return.
  • At least six new schedules will be available, numbered one through six. Do you remember schedules that are lettered–Schedule A, B, C, etc.? For the most part, they’re still in play, and you can continue to use them to report your 2018 income tax information.
  • Here’s an example of how your reporting methods may change. If you claimed an education credit for 2017, it would have been entered on Line 50 of the 1040 form. For the 2018 tax year, if you claim an education credit you’ll complete a Schedule 3 (Nonrefundable Credits), and then include the total from Schedule 3 on Line 12 of the new form.

The purpose of these changes is to make the filing process less burdensome for a great many filers who usually didn’t have any ‘extras’ to report in previous years.

For more information about the changes coming for the 2018 tax year, see these two informative articles at Forbes.com:

Here’s How The New Postcard-Sized 1040 Differs From Your
Current Tax Return

IRS Announces 2018 Tax Rates, Standard Deductions, Exemption Amounts And More

*All information is based on IRS drafts of 2019 tax forms and is subject to change.