Any students who may be requesting aid, should complete a FAFSA. Many schools cannot provide even merit-based scholarships without a completed FAFSA so this is an incredibly important step! Funds at colleges are also limited on a somewhat "first-come first-serve" basis and disbursed as applications are beginning to come in with an initial pool of funds that diminishes over time, so the sooner students complete the FAFSA the better. Your kids are still way ahead of schedule so please don't panic but please don't wait too long either! Many students qualify for Pell grants and other forms of aid, don't assume you may not qualify.
The FAFSA is a tool that links to federal tax returns to determine a family's projected monetary contributions to pay for college for their child.
To begin, both parents and students need to apply for and obtain an FSA id - this will be your login identification for completing your FAFSA. You can obtain an FSA id at: https://fsaid.ed.gov/npas/index.htm
Students are the applicants, parents are the parents when applying for this id.
Once you have your FSA id, you can login to https://fafsa.gov/ and complete your FAFSA. Don't be overwhelmed by this document, take your time and if you have questions along the way, there many FAQ options as well as chat options while completing if you need clarification.
This document is a step-by-step process of each individual question if you need clarification along the way - https://studentaid.ed.gov/sa/sites/default/files/2017-18-completing-fafsa.pdf
You will need access to your 2015 tax returns, and can use an IRS Retrieval Tool that can link your federally filed tax returns to your FAFSA which saves a lot of time in the government verifying your information. I recommend this option as it will automatically populate your tax data for you and reduce the risk of human error.
Make sure your student lists every single school they are applying to so that the FAFSA will also link to those schools. If they list more than 10 schools, the last school listed will bump another school off the list, they can only have 10 total at once.
I found this article really helpful as well - http://www.cnbc.com/2016/10/05/before-you-file-the-fafsa-check-for-these-errors.html
Additionally, some schools like UNC require a student to complete a CSS profile for nonfederal student financial aid eligibility. Here is a list of schools that require a CSS profile: https://profileonline.collegeboard.org/prf/PXRemotePartInstitutionServlet/PXRemotePartInstitutionServlet.srv
If your college or university is on the list, please visit the following website to complete this supplemental tool: https://student.collegeboard.org/css-financial-aid-profile