What you need to know about the FAFSA this year

How to talk to your kid about paying for college
How to talk to your kid about paying for college

There's one thing every American must do if they want help paying for college: Submit the Free Application for Federal Student Aid, or FAFSA.

It's not too early to apply for financial aid for the 2018-2019 school year. The form was made available on October 1.

The final deadline isn't until June 30, 2019, but it's best to file as soon as possible. Many colleges and states require families to submit the form before next spring for some financial awards. Tennessee has one of the first deadlines, set for January 16, 2018.

At least 12 states distribute grants on a first-come, first-served basis, and you might not receive anything if you wait too long.

And if your state is one of the handful that has made tuition free at some colleges, it's likely you'll still need to fill out the FAFSA to be eligible.

The earlier deadlines are usually for scholarships and grants (awards you don't have to pay back.) But you need to fill out the form to be eligible for low-interest federal student loans, too.

At a minimum, an undergraduate student will be able to borrow $5,500 from the government.

Related: How to read your financial aid letter

The FAFSA asks for both students' and their parents' income, as well as other financial assets like bank accounts, brokerage accounts, and 529 college savings plan accounts. It doesn't ask for the value of your home, but other real estate investments could count against you. (About 200 colleges require a second financial form called the CSS Profile, which does consider the value of your primary residence.)

Colleges use this information to determine the "Expected Family Contribution," or what it expects a family to be able to pay. Most students get scholarships and grants to help cover the remaining cost.

After the FAFSA is processed, each college that accepts you will send a financial aid award letter. But when those letters go out will vary by school.

Related: Why your financial aid award is smaller than expected

The government changed two big things about the FAFSA last year. It allowed families to submit the form as early as October instead of January. It also allowed them to base answers on their finances from a year earlier. This eliminated having to make guesses on future income and making corrections later.

The process has gotten easier in recent years, but it can still be tedious. Here are three tips.

1. Start here, ever year

Go to fafsa.ed.gov to resubmit the form each year you're in school. It's always free, so don't be duped by other sites that will charge a fee.

You'll have to create a username and password, collectively called the FSA ID, to use each time you submit the FAFSA. Both parents and students need to create their own.

2. The IRS retrieval tool can help

This online tool will transfer pertinent information from your tax return directly into the FAFSA form.

It can shave about 30 minutes off the time spent filling it out, said Kelly Peeler, the founder of NextGenVest. Her company offers free advice to students applying for college and financial aid.

Last year, the IRS retrieval tool was hacked and taken offline in April. It has returned with extra security and private protections, the Department of Education said.

Peeler still recommends families use the tool to save time, but said those worried about security can simply input the information from last year's tax return manually into the FAFSA form.

3. Parents might need to unfreeze their credit reports

Sometimes the loans, grants and scholarships offered to a student still aren't enough to cover the whole cost. In that case, parents may decide they need to take out loans in their own name to help out.

They can take out a Parent PLUS loan from the federal government, or they can apply for a private loan from a bank or online lender.

Either way, a credit check is required. If you've frozen your credit reports to protect yourself in the wake of recent hacks, you'll need to unfreeze them while you apply for these loans.

But you don't need to do that until you actually apply. A private lender should be able to tell you how long the process will take.

If you apply for a Parent PLUS loan, a credit check could take between seven and 10 days. But Peeler said she has seen it take longer.

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