6 FAFSA mistakes that could cost you financial aid

Each year, more than a third of undergraduates take out federal student loans, according to the Urban Institute. By the time they graduate, 70% of students with a bachelor's degree will have education debt.

The first step in accessing financial aid is completing a Free Application for Federal Student Aid (FAFSA). The FAFSA for 2027–2028 will officially be available by Oct. 1, 2026, although the Department of Education has made early testing available on StudentAid.gov.

The FAFSA has been streamlined for the new season, with a total of about 36 questions instead of the usual hundred-plus. But even small mistakes can delay aid or cost students thousands in lost grants and scholarships.

In a 2025 Sallie Mae survey, only 21% of families knew that the FAFSA opened in October, and nearly 30% reported not filing.

Anyone attending college or graduate school should complete a FAFSA, regardless of their financial situation, says Mary Jo Lambert-Terry, a former managing partner at student loan refinancer Yrefy. You may believe your income is too high to qualify, but the application is free and there are no set income limits.

"FAFSA is like an insurance policy, except it costs you nothing," Lambert-Terry told CNBC Select. "If you don't need the aid, you don't use it."

FAFSAs for 2027–2028 need to be submitted by June 30, 2027. But, apart from the federal deadline, each state has its own FAFSA deadline to determine eligibility for state-based financial aid programs, like the California-specific Cal Grant.

Many grant programs have aid available on a first-come, first-served basis.

The process only takes from about 45 minutes to an hour and a half, said Lambert-Terry. Still, according to Sallie Mae, 17% of applicants report missing the deadline.

It takes the Office of Federal Student Aid about three to five days to process an online FAFSA and for colleges to determine your financial aid package. Next June may seem a long way away, but If you wait until the last minute, you'll have less time to compare offers from different schools.

Waiting until the last minute also makes it difficult to correct any errors that may be flagged after submission.

To complete your FAFSA, you should create an FSA ID, which is needed to sign on. Each person needs unique credentials, so dependent students can't share the same FSA ID as a parent.

You'll also have to provide relevant information, such as:

• Your Social Security number (or Alien Registration Number if you aren't a U.S. citizen).
• Your driver's license or state identification number.
• Copies of your federal tax returns, including W-2 forms from the previous year. (Dependent students need to use their parents' tax return information.)
• Assets, such as savings accounts, stocks and real estate, beyond your primary residence 
• Bank statements and records of investments
• Records of untaxed income, such as child support or government benefits 
• The names or school codes of the colleges you want to receive your FAFSA information

One pro tip Lambert-Terry offers is using the IRS Data Retrieval Tool to automatically transfer your tax information into the FAFSA. 

"That's going to be the fastest way to get your tax information into the FAFSA and get you verified to determine what kind of aid you have available," she said.

Filling out the FAFSA form isn't always done in one sitting, Lambert-Terry added. Having an FSA ID will allow you to save your work and quickly pick up where you left off.

The length and complexity of the FAFSA, as well as changes from previous years, make it easy for errors to crop up. Family farms and small businesses no longer count as assets, for example.

Review everything carefully before submitting and double-check the entries for personal and financial information, which may require specific formatting. 

Mistakes can delay the processing or distribution of your financial aid package, Terry said, "but you can go back and make corrections and updates."

For the 2027–2028 cycle, the deadline for submitting corrections and updates is 11:59 p.m. CT on Sept. 12, 2027.

Human error isn't the only reason to log back in: Job loss, divorce, the addition of a new child, or other life changes may require you to update your application.

To make changes, log in to your FAFSA account with your FSA ID and choose the "Make FAFSA Corrections" option. From there, you can update your information, add or remove schools or make other changes to the application.

Some changes may require additional documentation or verification, which could delay the processing of your award. Additionally, if you make a correction after the federal or state deadlines have passed, it may affect your eligibility for certain types of aid.

The FAFSA could still require your attention after you hit submit. The U.S. Department of Education may want to verify your account, an audit-like process that requires additional documentation.

If selected for verification, you should see an asterisk next to the expected family contribution on the Student Aid Report (SAR), a summary document you will receive after filing the FAFSA. The financial aid offices from the schools listed on your application may also send you an email or letter asking for information.

"Do not feel like you're being singled out," Lambert-Terry said. "It's like a random lottery. You just happen to make a list because the schools have to physically verify a certain percentage of their students."

To stay on top of the status of your applications, Lambert-Terry recommends checking your email and online portal regularly. 

"I tell people to just set up an email address specifically for this," she said. "If the financial aid officer is asking for verification of information that was provided on the FAFSA, you're going to need to respond quickly."

After submitting your FAFSA, you should receive your Student Aid Report within three weeks. It will list your expected family contribution, so check that all information is up to date. 

Keep in mind, the SAR is not the final decision on financial aid: Offers are typically made by the individual school's financial aid office. Each will include a breakdown of the different types of aid available from that institution, such as grants and loans, along with the corresponding amounts you are eligible to receive. 

Lambert-Terry advises thoroughly reviewing each offer thoroughly to understand the terms before accepting anything. 

"The first thing you're going to want to do is to try to get the least expensive aid possible — your grants or scholarships and endowment money," she said. "Then go into subsidized and unsubsidized financial aid, and really take a look at what packages they're offering before you get into private loans." 

Exercise caution when deciding which offers to accept: Taking on too much debt can hobble your finances for years to come. One rule of thumb is to limit your total student loan debt to your expected starting annual salary after graduation.

Applicants can also appeal an aid offer if they believe they are eligible for more based on their financial circumstances.

At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience.

For this story, we interviewed Mary Jo Lambert-Terry, chief operating officer at student loan refinancing firm Alt Lending. She was previously managing partner at Yrefy, which specializes in refinancing private loans that are behind or already in default.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every student loan article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of student financing. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.  

Catch up on CNBC Select's in-depth coverage of credit cards, banking and money, and follow us on TikTok, Facebook, Instagram and Twitter to stay up to date.