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What You Need Know About FAFSA
Understanding the Free Application for Federal Student Aid
The Free Application for Federal Student Aid, or FASFA, is a federal financial assistance program for college and graduate students. This program was developed by the US Department of Education to enable more students to afford higher education. The program provides federal funds to millions of students each year. This aid comes in the form of federal loans and grants. Students must fill out the free application and reapply each year that they are in school to continue to receive benefits.
The primary FAFSA eligibility requirement is having a high school diploma, General Education Development (GED) certificate or homeschool equivalent. The simplest way to apply for FAFSA is online. Applicants must provide information about their dependency status and income. Eligible students are then awarded financial aid packages consisting of FAFSA grants, loans and/or a work-study program. The amounts of these awards can vary from year to year.
What exactly is FAFSA?
This question asked by thousands of students and parents each year. FAFSA was created under Title IV of the Higher Education Act of 1965 by the Department of Education. Essentially, it is the official form used to apply for federal financial aid for higher education. FAFSA is managed by the division of Federal Student Aid (FSA) and helps millions of college students every year afford education by granting them financial aid packages.
The financial aid application must be updated and resubmitted every year that the applicant student is in school and desires federal assistance. There are strict federal, state and college deadlines each year for turning in the application. June is the federal deadline for the 2019-2020 school year. States and individual schools, however, have their own deadlines for students to apply for FAFSA. Applications usually become available in October. The form takes roughly 30 minutes to complete and is shared with all schools that are listed on the application.
Federal student aid is paid out on a first-come, first-served basis. Thus, students who apply earlier can receive more benefits, as there is a limited amount of funding available for financial aid each year.
There are various eligibility requirements for FAFSA. Nonetheless, they are minimal so that more students can be eligible for benefits. The main FAFSA requirement is that a student must be qualified to obtain higher education at a college or career school. Students qualify by having a high school diploma, General Education Development (GED) certificate or completing a valid homeschooling program. Also, prospective federal student aid recipients must be enrolled in an eligible degree or certificate program and maintain satisfactory progress during their time in the program.
All applicants must have a Social Security Number (SSN) unless they are from the Republic of Palau, Federated State of Micronesia or the Republic of the Marshall Islands. Male applicants are required to be registered with the Selective Service Reserve when they are filling out the financial aid application. The following statements must be signed before the FAFSA application is submitted:
- Federal loan aid will solely be used for educational purposes.
- There are no defaults on federal student loans or refunds owed on federal grants.
Applicants must be legal residents of the U.S. but do not have to be citizens. Students who have the following documents are also eligible to apply for FAFSA:
- Green card
- US National status
- Battered immigrant status
- Arrival-departure record
Applying for FAFSA: What You Need To Know
Every year, prospective college students search how to apply for FAFSA. Online is easiest for students and parents. Most efficient way is through the secure app available for both Google Play and the App Store to complete the application.
Applicants may also choose to have the option to complete a paper FAFSA form. A PDF of the application can be found online and printed out or be requested by phone. Paper applications must be mailed in to be processed. Both parents and students can fill out sections of the FAFSA application. Each can also create separate account logins to enter their information.
The application is lengthy with several sections. Starting with the demographics sections. This asks for data including the student’s name, Social Security Number and birthday. Following demographics is the section where a student lists every school he or she is considering, even if he or she has not yet applied or been accepted.
Next is a critically important section regarding dependency. Dependency is determined by how much parents support the student financially such as providing shelter, food and clothing. Bottom line, it is who files federal taxes for the household every year. In many homes of young students, it is the parents. The FAFSA asks a series of questions to determine the dependency status of the student. Students deemed dependent can then pass the online form onto their parents to fill out. Because every family situation is unique, it is important to check who the FSA qualifies as a parent or guardian in order to obtain the correct IRS information.
For households with dependent students, parents must complete their own demographics sections in addition to their income and tax information. In order to receive the highest amount of financial aid, students and parents must submit accurate tax and income information.
The last section of the FAFSA application is signing. This verifies that all information entered is correct and accurate and that the applicant is finished. Online applications do notify students and parents, however, if any information is missing or inconsistent before submitting. Individuals applying on paper will have to proofread their applications on their own.
How much money will I get from FAFSA?
That is what everyone really wants to know. The amount of aid that students can receive depends on several factors. The federal student aid program does not focus on low-income students alone. Every individual’s situation is taken into consideration holistically. While financial need is one of the factors that the FSA examines, the following are also determinants of aid:
- The cost of attendance
- Amount of aid available from the school
- Whether the school is in state or out of state
- Expected amount of private scholarships
- Expected Family Contribution (EFC)
- Enrollment status
There are three types of aid for students eligible for the Free Application for Federal Student Aid: grants, loans and participation in a work-study program. FAFSA grants are often called “gift aid” as it is assistance that does not have to be paid back. This type of financial assistance is need-based, and thus reserved for low-income students.
The FAFSA work study program is available to beneficiaries who also have a financial need. Not all schools participate in work-study but those that do help students find part-time jobs that are related to their field of study or in civic education. Income earned from work-study should be used toward living and day-to-day expenses rather than tuition.
There are two different FAFSA loans available for students: loans directly from the Department of Education and loans from the school. They can be subsidized or unsubsidized by the government. Subsidized federal student aid is available for low-income undergraduate applicants. The U.S. Department of Education pays the interest on this loan during deferment, 6 months after graduation and while in school. Unsubsidized loans are available for undergraduate and graduate students. However, the Department of Education does not take responsibility for unsubsidized FAFSA loan interest.
What will I owe FAFSA?
Individuals awarded aid from FAFSA question: “do you have to pay back FAFSA?” Simply, students must only pay back loans. FAFSA grants and funds earned through work-study programs do not have to be repaid. Students are required to pay back both subsidized and unsubsidized loans. However, students have several months post-graduation to begin making payments on their FAFSA loans. Borrowers can choose from a repayment plan options that best suit their incomes and needs. Repayment is not made directly to FAFSA, however. Student loans are managed by third party loan services approved by the FSA. Information about all federal student aid is available on your FSA accounts and individuals are contacted by their loan servicer when they first accept their loans.