Around Two-thirds of today’s college and university students rely on loans to pay for their education. At the end of the day, the student will owe an average debt of $30,100 by student loans. And some level of debt is unavoidable for the students. But still, there are many financial aid options that help students to reduce their education costs, one such financing option is FAFSA. In this article, we will be exploring all about FAFSA.
Table of Content
- What is FAFSA?
- Types of Financial Aid
- How to Apply?
- Application Process
- Documents Required
- When to apply?
- Why should you care?
- Should you Repay FAFSA Money?
- Why do you need it?
- Eligibility Criteria
- What to do after applying for FAFSA
What is FAFSA?
The FAFSA is a type of form which the undergraduate and graduate students or sometimes parents fill out to check the eligibility status for any financial aid. The FAFSA then determines the student’s eligibility status by EFC calculator which is then distributed to your college/university’s financial aid office.
This FAFSA can be filled out on two categories:
- FAFSA for a dependent student
- FAFSA for an independent student
For a dependent student, he/she will need their parent’s contribution to fill out the form. In case, if the student’s parents are divorced, then the applicant will need to fill out the form twice with his mom and dad,
For an independent student, they may not need their parent’s contribution to filling the form, however, they’ll need their guardian’s contribution if they are living with them, or spouse’s information if you’re married
The SAR(Student Aid Report) will be sent to you, to figure out the exact amount of financial aid you’re eligible, you’ll have to subtract your EFC(Expected Family Contribution) from the COA(Cost of Attendance)
For Example, If your COA is $25,000 per annum and your EFC is $18,000 per annum, then you will be eligible for financial aid of $8,000.
The financial aid may include all need-based forms, except scholarships and certain private grants.
Also Read: How to Apply for FAFSA as an Independent?
Types of financial aid
FAFSA offers several different types of financial aid programs.
Pell Grant - A grant of up to $6,195 (as of 2019-2020 Assessment year) for students with a low family contribution.
Federal Supplemental Educational Opportunity Grant (FSEOG) - A grant between $100 - $4000 for eligible students.
Stafford Loan - A grant from $5,500 - $7,500 based on the academic year for dependent students, It has a fixed interest rate of 4.29% and the interest paid by the government.
The Federal Work-Study Program - A program where applicants can get part-time work, up to a certain amount, mostly the Federal government pays half of the student’s wage and the school will be paying the other half.
How to apply?
There are four basic ways to apply and file for FAFSA:
You can apply online at the official FAFSA website.
You can also apply by using the MyStudentAid mobile app (which is available on the App Store and Google Play store as well.)
You can screen-fill or print and manually fill the PDF application and mail it to Federal Student Aid Programs
You can also request a paper application over the phone via 1-800-4-FED-AID or 334-523-2691: hearing-impaired individuals can call 1-800-730-8913, Then manually fill out and mail it to the address given below
Federal Student Aid Programs
If you need any help in filling out your FAFSA application, there are numerous helpful videos available on youtube. If not, you can contact your school’s Financial Aid Office for further queries.
Once the FAFSA is completed, students are provided with a Student Aid Report (SAR). The SAR provides the applicant their potential eligibility for other types of Financial Aid.
The applicants are also made available of ISIR (electronic version of SAR). The ISIR is also sent to state agencies that provide need-based aid.
Once you are aware of how to apply for FAFSA, also make sure that you c\arry the required following documents for verification, mostly nowadays FAFSA is filed online, they’ll need the following information
The candidate’s social security number
The candidate’s parent’s social security number
Their driver’s license number (not mandatory)
If the applicant is dependent, then their federal tax information or the tax returns
Records of untaxed income such as interest income, child support received and even the veteran non-education benefits from everyone in the family (Optional)
Records about savings account balances, cash, investments like stocks, bonds, and real estate and business of everyone in the family (Optional)
When to apply?
Deadlines are one of the hardest challenges in our day to day life, especially when it comes to financial aid. The deadlines vary based on state or federal institutions.
Each state and the school year has different deadlines, in order to check the deadlines, visit the studentaid.ed.gov website, select your state and school year for when you are applying and click on “view deadlines”. There are federal deadlines, state deadlines, college deadlines, they differ due to the difference in policies.
Why should you care?
The applicant will get the Student Aid Report sooner than the PDF forms.
You can save the Federal government money by reducing their processing costs.
You can list up to ten colleges online for FAFSA, while you can apply for only four through FAFSA paperwork.
Should you Repay FAFSA Money?
Basically, the FAFSA is used to check the eligibility of financial aid and also to apply for financial aid from sources such as the federal and state government and also from many colleges/universities.
The FAFSA is administered by the Department of Education, which assembles different types of financial aid as mentioned above, which is offered to the students who are eligible. These financial aid are basically awards and gift which doesn’t need to be repaid, except the student loan.
Why do you need it?
- Tuition and room: Generally tuition fee and room accommodation will likely be your biggest expenses. So it would be a good idea to determine what type of costs we are dealing with.considering, most of the 4-year schools will require freshmen to live on campus, but also look into local rental rates.
- Books and Supplies: secondarily, books and supplies will vary for each student and the type of courses they choose and it also depends on their professors. the average annual textbook costs for 2018-2019 is $1,450. While you can typically recover a portion of each term investment in books by selling your used books.
- Cost of Living: This general category, which should include expenses like groceries, clothing, and entertainment will differ from person to person. To keep track of these costs is to establish a limit on your expenses for each term and then track your total cost as you go
Basically, many students are eligible for one or the other form of financial aid, few students who are not eligible for need-based aid may still be eligible for an unsubsidized Stafford loan.
In addition, to meet the financial need, students must meet certain criteria in order to be eligible for such aid:
Be a U.S.citizen or an eligible non-citizen;
should have a valid Social Security Number;
Should have a high school diploma or GED test result;
Should have maintained a Satisfactory Academic Progress(SAP);
Should not have been found guilty of the sale or possession of illegal drugs while federal aid was being received.
What to do after applying for FAFSA?
By filling the FAFSA by providing all the required information and documents as aforementioned, they calculate the EFC (Expected Family Contribution) for the applicant. This EFC is the amount that your parents/family is expected to pay for their child’s education, but you are not required to provide that amount.
Schools use the EFC to estimate the amount of federal financial aid the student can receive as well as to calculate how much aid can the student be eligible for.
This EFC report is distributed in the document called SAR (Student Aid Report), which is to be expected about two to three weeks after your submission of FAFSA form.
FAFSA is really important and helpful in all the student’s life, that can help the student in financial aid for college. In some states, the students are required to complete the FAFSA as a part of their high school graduation.
If you are looking for more Financial aid then don't forget to check the CSS Profile
Also, Read CSS Profiling vs FAFSA.