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Why the best time to apply for college financial aid is now

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Why the best time to apply for college financial aid is now

When it comes to college financial aid, you can't win if you sit on the sidelines.

Students need to file a Free Application for Federal Student Aid, or FAFSA, to get in the running for federal and state aid.

The average cost of tuition, fees, and room and board reached $21,370 for in-state pupils a public college during the 2018-2019 school year, according to the College Board.

Costs were more than double that amount — $48,510 — for private school students, the College Board found.

Time is of the essence for applicants. "Stop, drop and fill it out," said Winnie Sun, managing director at Sun Group Wealth Partners in Irvine, California.

Loans aren't the only thing that families can get via the FAFSA. "It's a tool for obtaining other scholarships and aid as well," Sun said.

Here's another reason why you shouldn't wait until the last minute to file: State grants are finite.

In more than a dozen states, grants are given on a first-come, first-served basis until the dollars run out, Mark Kantrowitz, publisher of SavingforCollege.com, told CNBC earlier.

Those states are Alaska, Illinois, Indiana, Kentucky, Nevada, North Carolina, North Dakota, Oklahoma, Oregon, South Carolina, Tennessee, Utah, Vermont and Washington, he said.

Gather your documents

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Before you begin, get your FSA ID — log-in credentials you'll need to complete and electronically sign the FAFSA. You may need to wait up to three days before you can use it, so don't wait.

You should also gather the necessary paperwork before you start working on your application.

"When you file your FAFSA, you'll want to make sure you have all of your documents in order starting with your Social Security number," said Sun. "Make sure the number is correct."

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Students who are still dependents will need their parents' Social Security numbers; their Form W-2, which details wages and taxes withheld; and federal income tax returns — both their own and their parents', if they are dependents.

If you receive any untaxed income, including child support and interest income, the Department of Education will want to know about it. Have those related documents ready.

Finally, you'll need paperwork related to your family's cash holdings, savings and checking account balances, and investments.

Remember: 401(k) plan and individual retirement account balances aren't considered assets on the FAFSA, so you can exclude them. The same goes for insurance policies, home equity and annuities.

Be thorough

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Be prompt, but be thorough.

Remember to have a list of schools you'd like to apply to as you fill out your application. These institutions are receiving your FAFSA data, and failing to list them may keep you from being considered for grant aid there.

Avoid common flubs, including failing to complete the entire FAFSA form or waiting until the last minute to turn it in.

Finally, be sure to maintain your records in a safe place and make a copy of your completed form.

"Keep a digital copy on your computer just in case you need to make changes or produce the documentation again," said Sun.

CHECK OUT: 5 questions to ask yourself before buying a home, even if you can afford a down payment via Grow with Acorns+CNBC.

Disclosure: NBCUniversal and Comcast Ventures are invest