FAFSA Application Overview: Gateway to College Financial Aid in the US
FAFSA stands for Free Application for Federal Student Aid. Administered by the US Department of Education, FAFSA is the gateway to most university and college financial aid in the United States. Although the FAFSA name indicates it is for federal aid, it is also used to award most state and school aid. At the federal level, nearly 10 million students have received approximately $100 billion in new aid each year for their studies in universities, colleges, career schools, and trade schools. There are approximately $500 billion of outstanding federal student loans in the US. By filling out a FAFSA, applicants kick-off the process of qualifying for this aid.
What is the purpose of FAFSA?
FAFSA is used to determine eligibility for all types of federal financial aid including grants, loans and work-study programs. The FAFSA form asks for financial income and asset information about a student and his/her family. The result of submitting this form is a Student Aid Report that will include an Expected Family Contribution. This is the number used to determine a student"s financial need and to help determine eligibility for the different types of aid.
Why complete the FAFSA Form?
Even if a student is not sure if he/she would qualify for grants or work-study, the FAFSA is required in order to receive federal loans that are available to almost all students regardless of their financial situation. It is also required by most schools to receive scholarships that may or may not have a financial-need requirement.
How is the FAFSA filled out?
Although the application can be filled out on paper and mailed in, it should be completed online to ensure the fastest processing. Most applicants complete their FAFSA online. As part of applying online, students will receive a FAFSA PIN (Personal Identification Number), which is 4-digit number used in combination with other personal information (e.g. Social Security Number, date of birth), to protect the privacy of the information they have entered and to complete electronic submittals.
Students should complete the FAFSA worksheet before filling out the actual FAFSA form. The following information will or may be needed:
- Social Security number and driver’s license
- W-2 forms and Federal Income Tax Return
- Parent"s Federal Income Tax Return (if student is a dependent)
- Untaxed income records such as Workers Compensation, Child Support or Veteran’s benefits
- Current bank statements
- Business and Investment records
- Alien Registration card or Permanent Resident card (if student is not a U.S. citizen)
When is the FAFSA submittal deadline?
A FAFSA form cannot be submitted prior to January 1 for the upcoming school year. Since some funding is limited and often awarded to the earliest applicants, it should be submitted as close to January 1 as possible. The federal deadline is June 30 but most states have deadlines that are earlier, some as early as February 15th. The U.S. Department of Education maintains a listing of each state's FAFSA Deadline.
What happens after submitting the FAFSA Form?
A Student Aid Report (SAR) will be sent via e-mail (if the student provided an e-mail address) and to all the schools that were listed on the FAFSA. The SAR will include an Expected Family Contribution (EFC) amount. This is the number used to determine eligibility for financial aid. Each school that the student listed on the FAFSA will then send the applicant an award letter to let him/her know what aid will be offered. This includes aid from federal, state and school sources. If there are any mistakes on the SAR or any information has changed, students can make corrections online or via the mail.
How is Expected Family Contribution determined?
A family’s income, assets and other information are used to determine their EFC. Whether a family has other children in college and whether someone in the family is on a fixed income are also considered.
Can eligibility be estimated without submitting the FAFSA?
Yes, students can use the FAFSA4caster online tool. This tool will give an early estimate of eligibility for federal financial aid. This tool even lets users transfer information into the online FAFSA form to save time when applying officially. It’s a good idea for high-school juniors to use this tool to get an idea of what aid they might get.
Are there other forms needed to apply for financial aid?
Many schools also require completion of the CSS / Financial Aid Profile. This application is a service of the College Board and has a small processing fee. It is used by schools that are members of the College Board to award non-federal financial aid funds. Some schools also require their own form be completed to apply for school-funded financial aid.
FAFSA Tips
- Check everything – Mistakes and leaving out required information can stop a FAFSA in its tracks and lead to losing out on aid opportunities.
- FAFSA is free – Submitting a FAFSA form is free, there is no need to pay for it.
- Early bird gets the worm – Filing FAFSAs as soon as possible after January 1 each year gives applicants their best chances of receiving aid because some aid is offered on a first-come, first-served basis.
- Keep tax forms handy – Having the IRS 1040 tax form available while completing FAFSA can be a major time saver.
- Estimate taxes if needed – If an applicant"s tax forms are not complete it is better to estimate and make changes later rather than delay submitting the FAFSA form.
- Annual FAFSA renewal – Students need to update and resubmit the FAFSA every year to be eligible for any aid, including federal loans.
FAFSA4caster - Online estimator of eligibility for Federal Student Aid.
Funding Education Beyond High School: The Guide to Federal Aid - U.S. Department of Education"s detailed guide to all federal student aid.
College Board"s CSS/Financial Aid Profile - Application for non-federal student aid for some schools.
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