What is the FAFSA?
If you are thinking about applying to college, the first thing to figure out is how to pay for it. The best way to move forward with your goals is to complete the Free Application for Federal Student Aid (FAFSA). According to College Board, “about two-thirds of full-time students paid for college with the help of financial aid.” The FAFSA is a requirement for receiving any form of federal need-based financial aid such as loans, scholarships, grants, and work-study awards. You may also be required to complete the FAFSA to determine your eligibility for college-specific financial aid, privately-funded grants or scholarships, and state-funded aid programs. In fact, most college admissions offices ask that you file the FAFSA even if you plan to pay for your education on your own, or if you believe you do not qualify for aid based on your personal or family situation. The bottom line is that anyone planning on pursuing higher education should fill out the FAFSA or risk missing out on potential sources of financial assistance.
Types Of Financial Aid
Most financial aid comes from state and federal government, followed by universities and private institutions. As you begin the college application process, you should familiarize yourself with the many different kinds of financial assistance that might be available to you. Some forms of aid are nontaxable gifts, some require you to repay the money when you graduate, and some require that you work at a campus job in exchange for funding. Other forms of aid are restricted to students based on income level, or awarded only to members of a specific demographic group.
Loans administered through the federal government or private banks are a common way for students to finance their education. Both kinds require repayment after graduation or after you are no longer enrolled in school. Federal student loans are need-based, carry a fixed interest rate, and typically do not require repayment until after you finish school. Private lenders generally charge a higher interest rate, impose stricter enrollment and graduation regulations for repayment, and are best considered after you have exhausted all other funding options.
Grants are monetary awards that you do not have to pay back. Colleges usually credit these funds directly to your student account for use on tuition, fees, books, housing, and related expenses. The federal government is the largest provider of need-based grants. State governments and many universities also offer grants to qualified students. Completion of the FAFSA is an important step to help you determine if you qualify for this kind of assistance.
Scholarships are another type of aid that you do not have to pay back and are often funded by private organizations. They can be need-based, like grants, or merit-based and restricted to applicants who fill eligibility requirements linked to race, ethnicity, religion, or some other group affiliation. Some scholarships are awarded based on documented academic or athletic ability with certain rules attached to keeping the award, like maintaining a specified grade point average or adhering to certain sports-related regulations.
Work-study is a federal and state-funded program offered by many schools as part of a student’s total financial aid package. This type of aid provides part-time, on-campus employment for students with documented need. You can apply by filling out the FAFSA and checking the square indicating that you want to be considered for work-study. If you qualify, keep in mind that you may not be guaranteed a campus job, and that work-study does not usually cover all of your financial needs.
- Unsubsidized vs. Subsidized
Direct subsidized loans require documentation of financial need. The government pays the interest on a direct subsidized loan while you are attending college, or if you arrange to postpone payments after you leave school. Direct unsubsidized loans have less favorable terms, but do not require documentation of financial need. Interest accrues on direct unsubsidized loans as soon as they are issued, and you are responsible for repayment of the principal amount plus interest.
What to Have Before You Start Filling out the FAFSA
Before you begin, get organized! The application may seem complicated at first, but, if you gather up the documentation you need beforehand, the application will take an hour or less to complete. Figure out what is required for your particular situation; for example, your Social Security card, driver’s license, tax forms, and financial statements. Include your parents’ records if you are a dependent student receiving full or partial support from your family. Don’t presume that you are ineligible because of your legal status.
Create your FAFSA Student ID following the instructions on the website. This establishes your identity, enables you to submit your FAFSA online, and allows easy access in the future. Parents of dependent students will also need to create an ID. Your driver’s license can be used as a form of identification, and, if you are a U.S. citizen, you will need your Social Security card.
You will need to provide last year’s federal tax return and records showing your untaxed income to help establish your financial profile. If you did not file a tax return, you should use any W-2 or 1099 forms you received, or your final pay stubs for each job you held over the past year. Dependent students will also need to provide their parents’ tax records.
In addition to tax and wage information, the FAFSA asks about other sources of income. For example, did you or your parents receive any nontaxable veterans’ benefits, child support, or interest income? You should also know the amount of money in your savings and checking accounts, and whether you or your parents received any income from stocks, bonds, or real estate investments.
Submit documentation if you or your parents have experienced unusual financial hardships or incurred unanticipated expenses over the past year. These might include changes in marital status or living arrangements, serious health crises, unreimbursed medical expenses, unemployment and loss of wages, or taking care of a special needs child or aging parent.
Provide accurate information on the total debt load carried by you, or your parents if applicable. Are you or your parents behind on car payments or a mortgage? Do you or your parents owe money for child support or alimony? What about any past-due credit cards, late property taxes, or balances owed on previous student loans?
Who’s Eligible to Receive Financial Aid
Eligibility for financial aid requires admission or enrollment at an accredited school as a regular student seeking a degree or certificate, and is restricted to U.S. citizens or permanent residents. Applicants should possess a valid Social Security number or official government ID, and males between 18 and 25 must register with the Selective Service. Before applying, you should have graduated high school, fulfilled GED requirements, or completed homeschooling. You may still be eligible even without a high school diploma or equivalent if you attended a college or vocational school before July 1, 2012.
While most people who meet these criteria will find they are eligible for aid, some exceptions apply. Many programs require that applicants demonstrate financial need. If you have been convicted for the possession or sale of illegal drugs while receiving federal aid, you may not be eligible for further assistance. You may also be ineligible if you defaulted on a previous student loan.
Financial Aid Award Amounts
Billions of dollars a year are distributed in financial aid to qualifying students in the form of grants, loans, or work-study, but the amount and type of assistance depends on a student’s individual financial situation. The amount you are awarded depends on your expected family contribution and whether you are a part- or full-time student. Other important variables are your class standing and the cost of attendance at the school you have chosen.
Financial Aid FAQs
The costs of higher education can be daunting, and most prospective students are unfamiliar with their financial aid options. One reason might be confusion about eligibility requirements; another is that students don’t understand the importance of the FAFSA in securing all kinds of financial aid, including aid from states, colleges, and private institutions. Completing the FAFSA is not as intimidating as it may seem at first glance, and, to help you get through the process, here are answers to some of the more common questions you may have with links to more information.
When Should I Fill Out The FAFSA?
You can complete the FAFSA starting on October 1 of the year before you begin school, through June 30 of the academic year for which you would like to receive aid. It is a good idea to apply as soon as you can after October 1. Keep in mind that some colleges and states may have different deadlines for aid applications. You can check your state’s deadline on the FAFSA website. Contact your college’s financial aid office directly to find out about their specific aid opportunities and deadlines. The FAFSA website also provides information about upcoming filing deadlines for the current academic year.
It is a good idea to apply as soon as you can after October 1.
Do I Have To Fill Out The FAFSA Every Year?
You must fill out the FAFSA every year you are in school. This is because your financial need may change from one academic year to the next and the FAFSA establishes the amount of your award and your eligibility one year at a time. FAFSA renewal is fairly straightforward. Once you have completed your first FAFSA, some of your information will be saved and pre-entered for you on the online renewal application. If your college participates in the federal Electronic Data Exchange, you may be able to file your renewal through the school’s financial aid office.
Do I Have To Use My Parent’s Information Even If They Don’t Support Me?
Eligibility is need-based and the government assumes that families have a responsibility to help with school expenses. If you are a dependent student, your parents must complete the FAFSA and supply their financial information. Parents of independent students are not required to do this. However, you may not be considered independent even if you support yourself or if your parents refuse to help you. It is therefore best to supply your parents’ information, otherwise your application might be rejected, or the most you might receive is an unsubsidized loan. The federal student aid website can help you figure out what to do for your specific situation.
How Can I Check The Status Of My FAFSA?
The FAFSA provides several ways to check your award status. You can check three to five days after you filed online, or seven to 10 days after you sent in a paper application. You can also call the Student Aid Information Center at 1-800-433-3243, or request an update through your school’s financial aid office. To check online, you will need your date of birth, Social Security number, and the Student Aid ID that you set up when you completed the FAFSA. You should download your Student Aid Report (SAR) and look it over to make sure the information is correct. Your aid award letter will also be mailed or emailed to you.
What If I Need To Correct My FAFSA?
You can correct any mistakes on your FAFSA once it is processed. Situations where this applies include updating your address, email, or financial information; changing your marital or dependency status; or adding or deleting Federal School Codes. You can make changes online by logging in to the FAFSA website, entering your identification information, and clicking on “Make FAFSA Corrections.” You can also mail in your changes on a paper copy of your Student Aid Report, or through your school’s financial aid office. If your Social Security number was entered incorrectly, you cannot correct this online and may have to resubmit a new FAFSA. Check with your college’s financial aid office to determine what you should do to fix this.
How Will I Know When My FAFSA Has Been Accepted?
As long as you filled out the FAFSA completely and set up your FAFSA Student Aid ID, you should be able to track your application’s acceptance. Processing usually takes three to five days for online applications and seven to 10 days for paper submissions. Even if you did not apply online, you can check the FAFSA website to see if your application has been accepted and what level of assistance you will receive. If you provided your email address when you applied for the FAFSA, you will receive a notification with the link to your Student Aid Report.
What Is The Student Aid Report (SAR)?
The SAR tells you if you are eligible for student aid. The SAR reports your expected family contribution (EFC), which is the amount your family is expected to contribute for your education. Your financial need is based on the sum of your EFC subtracted from your school’s cost of attendance (COA). The COA takes into account tuition and fees, lodging, books and other expenses. This calculation is used by colleges to decide how much federal aid and other kinds of support you can receive. Check out the federal student aid website for a detailed explanation of the information on the SAR and how it is used.
Once My FAFSA Is Approved, When Will I Receive My Aid?
How and when you receive your aid depends on the school you attend and not the federal government. According to the U.S. Department of Education, you can expect grants and subsidized or unsubsidized loans to be deposited to your school account at the start of each semester, trimester, or quarter, depending on your school’s calendar. These payments, known as disbursements, should be applied to tuition, fees, books, lodging, and other required expenses. Check with your college’s business office to find out about the disbursement schedule and when you can expect to receive your aid. Work-study is typically paid to you directly as wages once you begin your campus employment.
How and when you receive your aid depends on the school you attend.
Do I Have To Accept The Whole Award I Have Been Given?
You do not have to take the whole award offered by your school. Your financial aid package gives you a breakdown of the value of the grants, loans, or work-study you can receive. It makes sense to accept only what you need. The federal student aid website has put together a useful decision tree to help you navigate through your aid package. A good rule of thumb is to accept the “free money” first (grants and scholarships), followed by work-study, and ending with student loans that have to be repaid. If you must take out loans, consider the ones with the most favorable terms, usually federal or state-issued loans rather than those from a private lender.
Where Can I Learn More?
Before you do anything else, start with the FAFSA website. You can begin by looking at the College Scorecard to help you focus on your educational and career goals. Then go on to read the FAFSA instructions, learn about eligibility, and find out what documentation you need to complete the application.
The FAFSA website is connected to the U.S. Department of Education’s student aid portal. This is the most comprehensive and up-to-date collection of financial aid information available, covering the college application process, the most recent FAFSA requirements and deadlines, and the different types of student loans available.
Outside sources are also a good way to figure out what you need to know and how it applies to your own personal situation. Forbes has put together a useful guide for understanding student aid, and Consumer Reports published an overview about college costs and the financial aid process.