How to complete the FAFSA form. A step by step guide for this crucial financial aid application

By Karin Price Mueller

If your child goes to college next year, October 1st is an important day.

This is the day that FAFSA – the free application of Federal Student Aid – is open for students and their families.

The FAFSA is the application used by colleges to determine if your student will be eligible for federal grants, works and studies and federal loans.

It should take you an hour or less to fill out the form, but be careful. You do not want to go wrong.

Here is your guide to FAFSA.

Before you get to the details of the FAFSA form, you need to know some things.

First, some families think they should not miss the FAFSA because their income is too high. They are wrong.

To start with, parental income is just one of the factors in the formula used to determine a student's eligibility for financial assistance, said Michael Pappachristou, RegentAtlantic's Certified Financial Planner in Morristown.

Other considerations include the parents' assets, the student's income, and the student's property.

Pappachristou said that the submission of the FAFSA could also be essential for obtaining a scholarship.

"Many schools offering scholarships based on merit will automatically consider students who submit the FAFSA to these programs," he said. "Failure to complete the FAFSA could lead to a huge missed opportunity – or multiple."

People get caught when colleges notice inconsistencies in applications. Other times, FAFSA's information does not match tax returns, which can say a lot about a family's income and assets. In addition, the Ministry of Education selects about a third of FAFSA for verification, which requires documentation to back up the information contained in the application.

If you are caught, the penalties are steep. You could face fines of up to $ 20,000 and up to five years in jail. Then you will have to repay the fraudulently accepted aid and your student may be suspended or expelled.

Not worth it