Since 1980, college tuition in the U.S. has tripled and continues to climb every year, forcing many families to search for funding options to help cover the bill. With the average student graduating with loan debt close to $25,000, more and more people are trying to create a savings and funding strategy that can help make higher education a more affordable endeavor. Part of that strategy may include financial aid, which is funds from federal and state student grants, work-study programs, and loans.
The office of Federal Student Aid provides approximately $112 billion in these funds each year to help students pay for college or career school. To apply for federal student aid, the current or prospective student will need to complete the Free Application for Federal Student Aid (FAFSA). Here’s a closer look at the FAFSA and what you need to know to help ensure a smooth application process.
The FAFSA is a free application that is required if you would like to apply for financial aid to help pay for college, a graduate program, or career school. The form asks for financial information and demographic details and is often used to determine eligibility for state and institutional scholarships. The amount of aid a student can receive varies and will depend on each individual’s situation. When submitting a FAFSA form, students can qualify for a few different types of financial aid:
Since the FAFSA requires information about both the student and the parent, including financial and tax information and Social Security numbers, both should be present to fill out the application. The parent's past tax information will be evaluated if the student is still a dependent. The FAFSA will be in the student’s name and he or she will create an FSA ID that will be used to fill out the application every year. The parent will also need to create an FSA ID to submit required financial information, like their income, tax-deferred retirement contributions, real estate, and investment and bank information.
While applying for college and determining your funding options can feel overwhelming, being prepared with the necessary information and paperwork before getting started can help make the FAFSA process go smoothly. To fill out the FAFSA form, you will need:
You can submit the FAFSA application before applying or being accepted to college. You can list up to ten colleges on your FAFSA application and by applying beforehand, you can get a better idea of how much financial aid you may be eligible to receive for the upcoming year—allowing you to more effectively compare and contrast. Colleges will not typically create a financial aid package until you’ve been accepted and you will not receive funds until you have enrolled in classes.
The FAFSA is a free application for student aid. Funds you receive from most grants, scholarships, and work-study programs do not need to be paid back, but loans will need to be paid within a certain period following the completion of your degree. Under certain circumstances, the federal government may cancel all or part of an educational loan, also known as loan forgiveness. Working in certain career fields, such as nonprofits, public education, and the military, may qualify you for loan forgiveness opportunities if you meet specific criteria.
You must complete the application between October 1 and June 30 to be considered for student aid for the upcoming academic year. Always check priority filing dates for each institution, since deadlines can vary from school to school. By applying as early as possible, it may avoid missing out on grant money and help to receive the most potential funding for the school year.
If you come prepared with your bank, tax, and other necessary information, most students can complete the form within an hour. Upon submission, it typically takes three to five days to process your application. The schools listed in your application will be sent this information automatically and you can check the status of your application at any time using your FSA ID. Once your application is processed, you’ll receive an email notification with a link to your Student Aid Report (SAR) that provides some basic information about your estimated eligibility for financial aid. At this time, you’ll also be able to review your information and make any necessary corrections. Upon getting accepted to a college, the amount of financial aid you are eligible for may be included in your acceptance letter.
Eligibility does not carry over from one year to the next, so for every school year you would like to receive financial aid, you will need to submit the FAFSA by the deadline. If you’re a returning user, you can access your previous information with your FSA ID and submit a renewal application. The FAFSA form will be auto-populated with your previous information, making the process much quicker and easier than the first time.
To make the FAFSA process as easy as possible, there are many online resources, including the Student Aid website that can help walk you through the required steps. The financial aid offices at colleges and universities can also offer assistance and answer any questions about the FAFSA application. After submitting the FAFSA, if there are changes in your family’s financial status that would affect your college funding, including the loss of a job, unexpected medical expenses, or a divorce or separation, you can submit an appeal letter to the financial aid office. This letter should explain the specific change or life event and the financial information supporting your appeal request. If your request is approved, you will likely receive a revised financial award letter from the institution.
Even if you have sufficient savings to pay for college or don’t believe you qualify for financial aid, it can be beneficial to go ahead with the FAFSA application process. Many grants and scholarships offer non-need-based financial aid, which means money is awarded for a student’s excellence in academics, an activity, or other talents. Even if the awarded amount only covers some of your expenses, it can help knock down college costs and minimize student debt after graduation.