8 FAFSA mistakes that can hurt your chances of getting federal student loans

Each year, 30% to 40% of undergraduates take out federal student loans to help finance their education, according to the Urban Institute. The first step in securing government-backed loans, grants, scholarships, work-study and other benefits is completing a Free Application for Federal Student Aid (FAFSA).

For the 2025–2026 FAFSA cycle, the federal deadline to submit a FAFSA is June 30, 2026, at 11:59 p.m. CT. The 2026-2027 cycle started Sept. 24, 2025, and applicants have until June 30, 2027, to file.

Even small mistakes can delay aid or cost students thousands in lost grants and scholarships, and mean turning to private lenders or even pausing your educational journey.

Mary Jo Lambert-Terry, a former managing partner at student loan refinancer Yrefy, shares the most common FAFSA mistakes filers make and how to avoid them.

Anyone attending college or graduate school should complete a FAFSA, said Lambert-Terry. regardless of their financial situation. You may believe your income is too high to qualify for aid, but the application is free and there are no set income limits that determine eligibility.

"FAFSA is like an insurance policy, except it costs you nothing," she said. "If you don't need the aid, you don't use it."

Still, in a 2025 Sallie Mae survey, only 21% of families knew that the FAFSA opened in October, and nearly 30% reported not filing — potentially missing out on access to billions in federal aid.

FAFSAs for the 2025-2026 year could be submitted as early as Dec. 2024, but all applications must be filed by June, 30, 2026.

For the 2026-2027 academic year, the form can be submitted between Sept.24, 2025, and June 30, 2027,

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.

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

Many grant programs have aid available on a first-come, first-served basis. Once grants are exhausted, you may be limited to loans

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. 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.

Before you start your FAFSA, you'll need to gather some information, like your Social Security number (or your Alien Registration Number if you aren't a U.S. citizen). The form may also ask for your driver's license or state identification number.

You also have to indicate your tax dependency status, so get copies of your federal income tax returns, including W-2 forms from the previous year. (If you are a dependent student, you will need to use your parents' tax return information.)

The following may also need to be reported if it applies to you or your parents:

• Any 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 Office of Federal Student Aid highly recommends that you create an FSA ID, which is needed to access, sign or correct your information online. 

Filling out the FAFSA form isn't always done in one sitting, according to Lambert-Terry. You may realize you're missing some information and need to finish the application later. Having an FSA ID allows you to quickly pick up where you left off.

Each person needs unique credentials to electronically sign and submit their portion of the FAFSA, so dependent students can't share the same FSA ID as a parent. Take care not to mix up the parent and student FSA IDs, Lambert-Terry cautioned.

Students can use the same FSA ID to renew their application every year they attend school. Applicants should write down their FSA ID and store it in a safe place to avoid the hassle of resetting their password when it's time to reapply for aid.

The length and complexity of the FAFSA application make it easy for typos and mistakes to crop up, so review everything carefully before submitting. 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."

The deadline for corrections and updates for the 2025-2026 academic year is 11:59 p.m. CT on Sept. 12, 2026.

Human error isn't the only reason you may need to log back in: Job loss, the addition of a new child or dependent, divorce, and a significant change in income or other circumstances could cause you to update your application, according to Lambert-Terry.

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.

One way to avoid eligibility errors is to use the IRS Data Retrieval Tool, which automatically transfers your tax information to 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," Lambert-Terry said, estimating that 95% of applicants can use the tool. 

It ensures that the data entered exactly matches what the IRS has on file, helping prevent processing delays or discrepancies in the offer amount. If the tool can't retrieve your tax information, you might need to enter it manually. 

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

If selected, 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.

To stay informed about the status of your application and additional requests, Lambert-Terry recommends checking your email and online portal regularly after submitting the FAFSA. 

"I tell people to just set up an email address specifically for this," she says. "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."

But, she adds, don't panic if you're chosen for verification.

"Do not feel like you're being singled out," she added. "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."

After filing the FAFSA, you'll receive the SAR within three weeks. It lists your expected family contribution, which the schools listed on your application will use to determine aid eligibility. So, be sure to check that all information is up to date. 

The SAR is not the final decision regarding financial aid: Offers are typically made by the schools' financial aid offices, rather than by the Office of Federal Student Aid. An offer will include a breakdown of the different types of aid available, such as grants and loans, along with the corresponding amounts you are eligible to receive. 

Once you receive those aid offers, Lambert-Terry advised thoroughly reviewing them and understanding the terms behind each type of aid before accepting. 

"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 have long-term consequences and hobble your finances for years to come. Only accept the loans you need and can reasonably afford to repay.

One rule of thumb is to limit your total student loan debt to your expected starting annual salary after graduation. So if you anticipate making $65,000, your student loan debt shouldn't exceed that amount.

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

There are several alternatives to federal aid for paying for college, most notably loans from private lenders, such as banks, credit unions and fintech companies. Unlike federal loans, private loans usually require a credit check and can have variable rates and fewer borrower protections.

On the plus side, borrowers can get larger amounts of financing with private loans than with federal loans and have more options with repayment terms.

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 and managing partner at student loan refinancing firm Alt Lending. Lambert-Terry was previously managing partner at Yrefy.

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.  

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