FAFSA Guide - Federal Student Aid
Updated July 23, 2024
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If you've begun thinking about how to pay for college, you may have encountered the term "FAFSA" and wondered, "What is FAFSA used for?" This page explains everything you need to know about the Free Application for Federal Student Aid (FAFSA).
Find out how to secure student aid, including eligibility requirements, how to submit the FAFSA, and the types of financial aid available.
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What is the Free Application for Federal Student Aid (FAFSA)?
The FAFSA is provided by the U.S. Department of Education for students and parents to apply for federal, state, and university-based financial aid. Students complete the form with their financial information. If the student is a dependent of their parents, they must include their parents’ financial information in the FAFSA. Married students must include their spouse’s information.
Schools, states, and the federal government use the FAFSA to determine student aid offers based on financial need. The amount of student aid offered is determined from the information provided in the FAFSA, including financial need based on tax returns, bank accounts, assets, and citizenship or residency status. Other factors, such as applicable military service, homelessness, or disabilities, may also impact eligibility for funding.
Students must maintain eligibility as required by their schools and reapply for financial aid each year they need it.
The FAFSA is available online. Students can also fill out a PDF form, print it, mail it, or request a paper FAFSA. The FAFSA has a 21-month application cycle, opening on October 1, nine months before the award year, and closes on June 30, the last day of the award year. Corrections or updates are due by September 14. Schools and individual states may impose other deadlines for their own financial aid funds, so check with schools' financial aid offices.
FAFSA Eligibility
The federal government requires basic eligibility and lists criteria for students in certain situations. These include military family members, non-U.S. citizens, unhoused students, and students with disabilities.
An online federal student aid estimator can help determine which types and amounts of aid you may qualify to receive.
To submit the FAFSA, you must meet these basic eligibility requirements:
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Demonstrate financial need if you're applying for need-based aid -
U.S. citizenship or eligible non-citizen status (U.S. nationals and permanent residents) -
A valid social security card or green card -
Consent to transfer your federal tax return directly into your FAFSA form -
A signed certification that you're not in default on a federal loan or owe a refund on a federal grant and that you'll use federal student aid only for educational expenses -
Qualification for regular admission as a college student or graduate or professional school admission -
Be enrolled or accepted for enrollment in an eligible degree or certificate program
Steps to Applying for Financial Aid through FAFSA
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1
Get Prepared
The first steps in the FAFSA process entail determining your eligibility, becoming familiar with your funding options, and assembling the documentation you'll need to apply. The necessary documents may include:
- Your social security number (SSN) or your parents' SSN if you are a dependent
- Your driver's license number (optional)
- Your A-number (for non-U.S. citizens)
- Tax returns
- Child support, interest income, and untaxed income records
- Current bank and brokerage account balances
- Net worth of businesses, farms, and investments
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2
Create an FSA ID and Fill Out the FAFSA
Create your federal student aid account with your social security card number and email address. Creating an account gives you an FSA ID, which you need before you fill out the FAFSA form. The student and each contributor must get their own FSA IDs.
The next step is filling out the FAFSA online. You'll follow step-by-step instructions as you work through the form. It will ask you to enter at least one college or university to receive your information and inform you of the types and amounts of aid you may receive. You can list up to 20 schools and add or delete them anytime.
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3
Review FAFSA Submission Summary
After you've entered all of your information, you'll review the FAFSA Submission Summary. This provides you with the opportunity to make corrections or updates.
Ensure the name and SSN you've provided match the information on your SSN card. Also, ensure your date of birth is correct, the address for contributors (parents and spouses) matches, the schools and school codes are accurate, and all the required signatures are there.
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4
Compare and Respond to Aid Offers
School aid offers, also called award letters, are electronic communications from the schools listed on your FAFSA that have offered you admission. The letters outline the amounts and types of financial aid you may receive from federal, private, school and state sources, known as financial aid packages.
The aid amounts will vary depending on each school's cost of attendance. Once they've all arrived, compare your award letters to select the one you want to accept.
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5
Receive Financial Aid
When your tuition and fees, including room, board, and meals if you live on campus, become due, your school's bursar’s office will apply your funding toward the amount owed. The remaining balance will be sent directly to you to spend on additional college costs not covered by tuition and fees. These include books, course materials, and room and board.
Typically, you'll receive grant and loan money disbursements once per term. If your aid includes work-study, you'll be paid once a month or biweekly, depending on your school’s schedule.
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6
Apply Every Year Until Graduation
You must apply for financial aid every year you need it by filling out a FAFSA for each upcoming school year. The FAFSA will automatically populate the information likely to stay the same year to year.
To continue qualifying for federal financial aid, you'll need to maintain your basic eligibility and make satisfactory academic progress as detailed by your school's policy. Criteria include minimum GPA and the number of credits completed each year.
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7
Graduate and Start Paying Back Any Loans
Not all types of financial aid need to be repaid, but federal student loans must be repaid with interest. Pay close attention to interest rates and whether the loans are subsidized vs. unsubsidized when evaluating your aid offers. Borrowers receive a six-month repayment grace period after graduation before payments are due. During that time, you can choose a repayment option–either fixed monthly payment amounts or a plan that bases your monthly payment on your income.
What Kinds of Aid Can Students Qualify For?
Financial aid options include grants, scholarships, work-study, which do not need to be paid back, and loans, which must be repaid. With college tuition rising each year, these funding sources can mean the difference between attending and not attending college.
This section covers the types of aid students qualify for through the FAFSA. Private loans require additional applications and materials, such as credit checks, which students can obtain through private lenders.
Scholarships
Colleges and universities use the FAFSA to determine how much financial aid each applicant is eligible to receive from federal, state, and school funding sources, including scholarships. Scholarships are gifts you do not need to repay, but you must typically maintain academic performance.
Grants
Federal and state grants do not need to be repaid unless you withdraw from school or fail to meet an obligation, such as working in an underserved area after graduation. This type of funding includes Federal Supplemental Educational Opportunity Grants, Pell Grants, and Teacher Education Assistance for College and Higher Education Grants.
Federal Loans
Loans are funds you borrow and must be paid back, including interest. Federal loan interest rates are usually lower than private loans or credit cards.
- Direct Subsidized Loans: Eligible students with demonstrated financial need can apply for Direct Subsidized Loans of up to $5,500 a year. The U.S. Department of Education pays the interest on this type of loan while borrowers are in school, for six months after leaving school, and during deferment periods.
- Direct Unsubsidized Loans: Direct Unsubsidized Loans do not require a showing of financial need. Independent undergraduate students can borrow up to $12,500 a year, while dependent students can borrow up to $7,500. Graduate students can borrow up to $20,500 per year. Borrowers must pay all of the interest that accrues during and after their time in school.
- Direct PLUS Loans: Graduate and professional students and parents of dependent undergraduate students without adverse credit histories can qualify for Direct PLUS Loans, which cover the costs of attendance less any other financial aid received.
Work-Study Programs
Federal Work-Study is awarded to FAFSA applicants with financial need. Students complete part-time employment in approved work-study sites, including community and service work and positions related to students' courses of study. At a minimum, your earnings must meet the current federal minimum wage. Some colleges offer work-study in addition to Federal Work-study for eligible students.
Your Student Aid Index (SAI), which is calculated using the information you provided on the FAFSA, determines your eligibility for both programs.
How to Compare Award Letters
Any school listed on your FAFSA that offers you admission will send an award letter detailing the financial aid package they can offer. Funding may include different types of aid–federal, state, private, and school-based. Amounts will vary depending on each school's cost of attendance (COA).
Once you have received your award letters, it's time to decide which one to accept. To help you determine which option is the most affordable, you can calculate the net price for each school with these steps:
- Find the school's COA on the aid offer, including tuition, fees, and expenses, such as room and board, books, and transportation costs.
- Subtract the amounts of any grants and scholarships to get the net price.
- Compare the net price of the schools on your list to see what you must pay out-of-pocket.
- Consider whether the college practices front-loading of grants and scholarship displacement, which may affect the net price in subsequent years. This is a practice where colleges give better financial aid packages to first-year students than to any other student. These packages have more financial aid, and less of the aid must be repaid.
- Choose the school that best fits your professional and financial needs.
If the net price exceeds your budget, you can apply separately for privately funded scholarships specific to a school, department, major, or demographic.
Using Your Financial Aid
You can expect your financial aid to be distributed according to type of funding. Grants, scholarships, and student loan money go directly to your school each term and are applied to your tuition, fees, and, if applicable, on-campus room and board. Any remaining funds are sent to you for other educational costs, such as books, course materials, and off-campus living and transportation expenses.
Direct PLUS Loans are also applied to tuition, fees, and room and board, and any leftover money is sent to your parents or directly to you if your parent authorizes it.
Work-study is paid directly to you each month.
Frequently Asked Questions about Filling out the FAFSA
Is FAFSA free money or a loan?
FAFSA is neither money nor a loan. It is an application administered by the U.S. Department of Education that must be filled out to receive student aid, including grant or scholarship money, loans, and work-study.
Do I pay back FAFSA?
Whether you pay back any money received through the FAFSA process depends on the type of funding. Loans require repayment, but grants, scholarships, and work-study do not.
How much will FAFSA cover?
The amount you receive through the FAFSA depends on your financial need, Student Aid Index (SAI), or just income. Your SAI is calculated when you submit the FAFSA and is your contribution from income plus assets based on your provided tax information. Your parents' income and assets are also included in the calculation if you're a dependent student. The lower your SAI, the greater your financial need.
What income is too high for FAFSA?
FAFSA applicants at any income level can apply for financial aid. There is no upper limit for eligibility, but your family size, you or your family's income level, and your year in school may impact the amount awarded.
Page last reviewed on June 5, 2024