What is the FAFSA?

By Mentor Staff | Edited By Mentor Staff

Updated On September 15, 2022

Editorial Note: This content is based solely on the author's opinions and is not provided, approved, endorsed or reviewed by any financial institution or partner.

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What is the FAFSA? The FAFSA, or Free Application for Federal Student Aid, is a form that all students complete to get financial aid for college. The U.S. Department of Education administers the FAFSA and determines how much financial aid you can qualify for.

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Here’s everything you need to know about the FAFSA:

What’s the FAFSA?

The FAFSA is a free form available through the U.S. Department of Education that both students and parents complete to get financial aid for college. As a high school senior, students and parents should complete the FAFSA when applying to colleges. To remain eligible for federal financial aid, complete the FAFSA each year that you’re in school.

When you complete the FAFSA, the U.S. Department of Education will ask you to submit your financial information. If your parent or guardian claims you as a dependent, your parent or guardian will submit their financial information as well. The U.S. Department of Education will use this information to determine your individual or family contribution toward the cost of college and how much financial aid you can receive.

The FAFSA can help you qualify for student loans, federal grants and work study. Your school also may use your FAFSA to determine your financial aid. When completing the FAFSA, start by listing up to 10 schools in the online format and up to four schools on the paper form to which you plan to apply. If you’re applying to more schools, you can add these schools later.

The FAFSA is approximately eight pages long and takes about 30 minutes to complete. To submit the FAFSA, you can complete the FAFSA online or print a pdf copy and mail it directly to the U.S. Department of Education.

When applying online, you should first create an FSA ID, which is a login and password for your Federal Student Aid (FSA) account. Through Federal Student Aid, you can apply for financial aid, check the status of your financial aid, and learn who’s your student loan servicer.

How is financial aid calculated?

Financial aid, which is need-based, is calculated using your FAFSA. However, your eligibility for financial aid depends on:

The formula to calculate financial aid is:

Cost of Attendance (COA) - Expected Family Contribution (EFC) = Financial Need

Cost of Attendance

The Cost of Attendance for a school is the amount it will cost you to attend that school. Typically, a school will show you an annual cost of attendance divided into a fall semester and a spring semester. If you are attending a two-year or four-year program, for example, you should expect your cost of attendance to be presented annually. However, given increases in tuition and other costs, you should expect a higher cost of attendance each year.

If you are attending a school and enrolled at least half-time, the cost of attendance includes:

  • Tuition and fees
  • Room and board
  • Books, supplies, transportation and miscellaneous expenses
  • An allowance for child care or other dependent care
  • Costs to study abroad

Expected Family Contribution

Your Expected Family Contribution is an index number that colleges use to determine how much financial aid you can receive if you attend their college.

Based on the financial information you provide on the FAFSA, the college will use an EFC formula to determine how much financial aid you can receive to use toward the cost of attendance.

The FAFSA will evaluate several important financial data, including:

  • Income information from your or your family’s last two years of income tax returns
  • Cash
  • Bank accounts
  • Investment accounts
  • 529 accounts
  • Business accounts
  • The number of people in your household
  • The number of children in your family attending college

Based on this financial information, the FAFSA will determine how much your family can afford to pay for college. Importantly, your EFC is not the amount of money that your family will have to pay for college. Rather, the EFC is used to determine how much financial aid you are eligible to receive.

What financial aid is available?

There are multiple types of financial that are available for college and graduate school students. For example:

Grants

Grants are a type of financial aid that don’t have to be repaid. There are several types of grants, including:

  • Pell Grants
  • Federal Supplemental Educational Opportunity Grants (FSEOG)
  • Teacher Education Assistance for College and Higher Education (TEACH) Grants
  • Iraq and Afghanistan Service Grants

Scholarships

In addition to grants, students should apply for scholarships as another form of financial aid. Typically, scholarships are available through non-profit organizations and private companies to help you pay for the cost of college or graduate school.

While many scholarships are need-based, other scholarships are merit-based. In addition to non-profit organizations and private companies, your school may offer scholarships too.

Student Loans

A student loan is money you borrow and must repay with interest. There are several types of student loans, including federal student loans and private student loans.

Federal student loans are available through the federal government and may be part of your financial aid package. For example, Direct Loans, Grad Plus Loans and Parent PLUS Loans are some examples of federal student loans. In contrast, private student loans are available through private lenders but aren’t part of federal financial aid.

These resources for college students can help you navigate student loan borrowing and student loan repayment.

Work-Study

Federal work-study is a type of financial aid that provides part-time jobs for college students and graduates students who have financial need. Through work-study, students earn income, which they can use to pay education expenses.

Most work-study jobs are either related to your course of study or relate to civic engagement and community service. Typically, work-study jobs pay minimum wage, although some jobs may offer higher income. The amount of your work-study financial aid will depend on when you apply, your amount of financial need and your school’s funding level.

With work-study jobs, undergraduate students are paid hourly, while graduate and professional students are paid hourly or through a salary. Your school will pay you directly. The amount of hours you can work will be tied to the amount of your work-study award. Work-study is available on a first-come, first-served basis.

When is the FAFSA deadline?

The deadline to complete the FAFSA is generally between October 1 and June 30. You should apply for the FAFSA as soon as possible after October 1.

However, states and colleges may have earlier deadlines if you are applying other types of financial aid or school aid. Here is a list of deadlines to apply for state financial aid. You can check with your school regarding its specific deadlines to apply for financial aid.

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