If you are thinking about how to finance your college education, there are some important facts about FAFSA you need to know. FAFSA, or Free Application for Federal Student Aid, provides more than $150 billion in federal grants, loans, and work study to over 15 million students who need help paying for their college education! The money that comes from FAFSA has helped countless individuals be able to go to college, myself included. Each year I was in college I filled out the FAFSA application and received aid for my education. Although it was a lengthy process, I am glad I did it, and each time I filled out the application I learned some facts about FAFSA that helped make the process a little easier.
One of the most important facts about FAFSA to know is you must demonstrate financial need to be eligible to receive aid. In addition to demonstrating financial need, eligibility hinges on several other key factors. You must either be a U.S. citizen, national, permanent resident, or have an arrival/departure record from immigration services. Additionally, you need a valid social security number and males need to be registered in the selective service. A GED or high school diploma is also needed, as well as being enrolled or accepting enrollment in an eligible education program. It seems like a long list, but most people are eligible for FAFSA, so it is not anything to worry about.
2. Basics of Applying
Applying for FAFSA is a lengthy process, but well worth it. Fortunately, the FAFSA website takes you through the process step-by-step. You will, however, want to make sure that you have set aside a couple of hours. It always took me awhile to fill out. When you are filling out a FAFSA application you will want to get a PIN, personal identification number, first. It will make the process go faster. Also, be sure to keep your PIN in a safe place because you will use the same one throughout college. After you get your PIN, it will greatly help the process if you gather some important documents. You will need your social security number, driver’s license number, alien registration number if you are a registered alien, income tax returns, and balances of cash, savings, and checking accounts. Also, any stocks, bonds, real estate that doesn’t include your home, and business and farm assets need to be reported. Keep in mind, if you are a dependent, your parents’ information has to be reported as well. It is really helpful if you can fill out the application with your parents. It is also really helpful if you and your parents have filed taxes. In fact, I recommend filing early so you have the information.
3. How Aid is Calculated
To determine how much financial aid you can receive, the federal government takes two factors into account. The first factor is the expected family contribution or EFC. The EFC is calculated using a formula that takes into account taxed and untaxed income, assets, benefits, family size, and the number of family members in college. The second factor is the cost of attendance, COA, which includes tuition, fees, room and board, living expenses, books and supplies, child care, costs relating to disability, and study abroad costs. Once these two numbers are determined, the COA is subtracted from the EFC, and the resulting number is the amount of financial aid you can receive.
4. Federal Grants
There are several types of aid you can receive, and one of them is federal grants. The nice thing about grants is they do not have to be paid back; however, not everyone qualifies for grants. Federal Pell Grants are the most common grant awarded, with the maximum award being $5,645. They are awarded to undergraduates who have no prior degree, except in the case of individuals who have gone back to complete a post baccalaureate teacher certification program. Another type of grant is the Federal Supplemental Education Opportunity Grant, which is awarded to students with exceptional financial need. These grants are awarded by the school, but not every school participates, so you may want to check with the schools you are applying for. The last two grants are TEACH grants and Iraq and Afghanistan Service Grants. It is important to keep in mind that usually you will only receive one type of grant.
Loans are the most common type of federal aid that students receive. The federal government has 3 different types of loans that it provides to students, with each type having specific qualifications. Perkins loans are awarded to undergraduate students who have exceptional financial need, and they have a 5 percent interest rate. These loans are not awarded by all schools, so this is another type of aid you may want to ask your school about. Direct subsidized loans are available for undergraduate students with financial need. The nice thing about these loans is the federal government pays the interest while you are in school. Direct unsubsidized loans are for undergraduate students with no financial need. They are also available for graduate students. You have to pay the interest on this loan while you are in school, which means this loan is costlier than the other two loans.
6. Work Study
Work study is another form of aid that is awarded through FAFSA. The work study program provides part time jobs for undergraduate and graduate students who have an established financial need. Usually, the jobs are on campus, but there are off campus jobs as well. The work hours are set, and you will be paid at least minimum wage, with some jobs paying more. If you are interested in work study, you should apply to FAFSA early. Work study is awarded on a first-come first-served basis, which means it literally pays to be early.
7. Staying Eligible
Being awarded FAFSA one year does not guarantee you will be awarded the next year. To remain eligible, you have to make satisfactory academic progress. You also have to be able to meet the basic eligibility I discussed earlier. You will have to reapply each year, but once you have applied the process doesn’t seem as difficult the second time around.
The federal student aid program is a great program that helps students afford college. Even though it is time consuming, it is well worth filling the application and submitting it early. I would always try to submit as soon as I filed my taxes. Do you have any experience applying for FAFSA?