Student finances, thy name is FAFSA. But what is FAFSA, exactly, and why is it so important to your finances as a college student? In this article, we hope to lessen the mystery and potential anxiety surrounding FAFSA, financial aid, and their relationship.
What is FAFSA?
That’s a great place to start. FAFSA stands for “Free Application for Federal Student Aid.” Essentially, the FAFSA is a form that college students fill out on an annual basis that determines their eligibility for federal financial aid.
The FAFSA primarily asks questions about your financial situation, including whether you’re single, married, or a dependent of your parents (if you’re a dependent and aren’t sure what your parents’ income is, now’s a good time to find out). Your specific college or university will also use data from your FAFSA to award their own aid.
So, in a nutshell, the FAFSA is an incredibly important document focused on your current financial situation that can potentially lessen the cost of your education.
Can anyone get FAFSA aid?
Another great question, and the unofficial answer is: potentially. The official answer is that U.S. citizens or eligible non-citizens who have a Social Security number and are enrolled as students in an eligible degree program are considered eligible for federal financial aid.
Other factors like academic performance and student status are also considered part of the Basic Eligibility Criteria established by Federal Student Aid. Financial status is considered but does not automatically disqualify an individual from receiving financial aid.
What if I’m not eligible?
You may still be able to qualify for financial aid at the state level. For example, if you’re an Illinois resident who isn’t otherwise eligible for federal financial aid, you can submit the Alternative Application for Illinois Financial Aid. Take a look at your state’s laws for more information.
What types of aid am I eligible for through the FAFSA?
When people talk about financial aid, they are typically referring to four distinct types of assistance: grants, scholarships, work-study jobs, and loans. Other options exist, but these are the most common types you’ll run across during your FAFSA journey.
Grants are financial assistance that you don’t have to pay back. Woo-hoo! Grants come by many names, but they all share that same basic feature.
Scholarships are similar to grants but are not exactly the same. Scholarships are usually given out by nonprofits, schools, and private organizations or individuals based on someone’s academic record, merit, or other unique attributes. Like grants, scholarships do not need to be paid back once received. Woo-hoo part two!
While many students may work and study during their time at college, the Federal Work-Study Program is a different thing entirely. Essentially, this type of financial aid allows students to earn money for school by working specific part-time jobs. Unlike the last two types of aid, work-study requires the recipient to exchange one thing for another; in this case, it’s work for financial aid.
At most schools, the money you earn from work-study will come in the form of a paycheck, which won’t go directly toward paying off your tuition unless you choose to use it for that purpose. Work-study aid may allow you to be more self-sufficient and borrow less in student loans.
Ah, the oft-mentioned “student loan.” Student loans, which may also be offered as a part of your financial aid notification, are essentially borrowed funds that are given to a student to attend school. This type of financial aid must be repaid by the recipient with interest.
The last two words of the previous sentence are important to remember. If you take out student loans, it’s vital that you understand any and all repayment options that come with that loan. Student loans are often feared because of this attribute, but as long as you do your research and plan ahead, you should be fine.
Do I need to fill out the FAFSA?
Well, let’s be a little more nuanced. Not everyone who fills out the FAFSA will receive aid. Therefore, depending on your unique financial and personal situation, it may be tempting to think “Well, I’m probably not going to get financial aid because of x, y, and z.”
Those assumptions may be correct; however, any student who wants to borrow federal student loans must fill out the FAFSA. Additionally, your university’s financial aid office will require you to reapply for the FAFSA each year to determine your eligibility, which is subject to change.
So at the end of the day, the answer is still “Yes,” just with a little more text and reasoning behind it.
Okay, good to know. What will I need to fill out the FAFSA?
While everyone’s individual FAFSA will look different, the required materials to fill it out largely remain the same. You’ll need:
- Your Social Security number (and your Alien Registration number if you’re not a U.S. citizen)
- You and/or your parents’ federal income tax returns, W-2s, and other records of money earned (if possible, we strongly encourage using FAFSA’s IRS Data Retrieval Tool, which is able to electronically source the relevant information from these forms; however, we still recommend you have the physical copies with you when filling things out)
- Bank statements and records of investments (if applicable)
- Records of untaxed income (if applicable)
- An FSA ID to sign electronically
Wait, an FSA ID? What’s that?
It’s essentially a username and password that allows you to access the Federal Student Aid system. You’ll be able to create your own FSA ID online through the Federal Student Aid website. If you’ve ever logged into Netflix, it’s essentially the same thing. Except the Federal Student Aid website doesn’t have Stranger Things on it. Well, at least not yet …
Okay, I did it! Now what?
Once you submit your FAFSA, you’ll receive a Student Aid Report (SAR). The SAR summarizes the information that you provided on the FAFSA, plus adds another piece of information: your Expected Family Contribution (EFC).
The EFC is simply an estimate of how much money your family can reasonably be expected to contribute to your education. Plus, it determines your eligibility for Pell Grants (need-based grants provided by the Federal Government).
The SAR is then sent to the colleges you listed on your FAFSA, who will determine your financial aid.
Great! Where can I go if I want to learn more?
You can always go to the official website for Federal Student Aid. This is where the majority of information concerning the FAFSA is found (we even used it to create this article!). And we don’t mean to brag, but UIUC’s Office of Student Financial Aid is also a great resource for understanding the FAFSA if you’re a prospective student, a returning student, or just curious about this whole financial aid business.
Filling out the FAFSA can be a stress-inducing part of the college experience for anyone. Nevertheless, it’s an important part of being a student and may potentially come with some monetary benefits attached. Whatever comes of your particular FAFSA journey, we hope this article has provided you with a solid jumping-off point. Good luck!