The cost of college has more than doubled in the 21st century alone. While that may cause sticker shock for some people, the good news is that financial aid can help. By planning ahead and applying for the aid you need, you can receive assistance to mitigate some of the costs of college.
Filling out the Free Application for Federal Student Aid (FAFSA) is critical for students that plan on attending college. The federal government, states, and many schools use information from the FAFSA to determine how much aid a student is eligible to receive. Students who don’t fill out the form could miss out on vital financial assistance.
What Is the FAFSA?
The FAFSA is a free application that allows students planning to attend college or graduate school to apply for federal financial aid. It asks about your household income, assets, and family size.
In many cases, the FAFSA is also used to determine state and institutional aid. When you apply and are accepted to college, your school will likely use the provided information to assess how much aid you’ll need to cover the cost of attendance. Then, the school will share the types of assistance you’re eligible for through online communication or a financial aid award letter.
How Does the FAFSA Work?
To qualify for financial aid, you and your family must complete the FAFSA each year of college. The FAFSA is free to complete and submit and typically takes an hour or less to complete. You can complete it online at studentaid.gov.
To start, you’ll need to create a Federal Student Aid (FSA) ID with the Department of Education. You’ll use this account each year that you complete the FAFSA. Once you’re logged in, you’ll be able to start filling out the form.
After submitting your FAFSA, you can access your Student Aid Index (SAI). The SAI is an estimate based on the information from your FAFSA that’s used to determine how much financial assistance you and your parents are expected to contribute toward your college costs.
Types of Financial Aid
The FAFSA is used to determine eligibility for several different types of financial aid, including:
- Scholarships: These are funds that don’t need to be repaid. Scholarships are often awarded based on academic achievement and/or financial need.
- Grants: Like scholarships, grants don’t need to be repaid. Grants are typically awarded based on financial need.
- Work-Study Programs: Work-study programs provide part-time jobs for undergraduate and graduate students to help pay for school.
- Student Loans: Depending on your situation, you may qualify for federal student loans. Undergraduate students with qualifying financial needs may be eligible for subsidized loans, while others can qualify for unsubsidized loans.
Financial Aid Eligibility
To qualify for federal financial aid, you must meet the following requirements established by the U.S. Department of Education when filling out the FAFSA:
- You must be a U.S. citizen or eligible non-citizen
- You must be enrolled in a degree or certificate program at a qualifying school
- You must have a valid Social Security number (exceptions are made for students from the Marshall Islands, Federated States of Micronesia, or the Republic of Palau)
- You must be enrolled in school at least half-time
- You must make satisfactory academic progress toward your program of study
- You must show you’re qualified for college by doing one of the following:
- Earning a high school diploma
- Earning a General Educational Development (GED) certificate
- Completing high school in an approved homeschool arrangement
- Enrolling in an eligible career pathway program and completing ability-to-benefit alternatives
How to Apply for Financial Aid Through FAFSA
Although the FAFSA may seem intimidating at first, it’s intended to be a straightforward application. Continue reading for step-by-step guidance.
1. Gather the Required Documents
You can save time by collecting the necessary documents before starting the FAFSA. You’ll need the following:
- Your Social Security number
- Your Alien Registration number (if applicable)
- Your federal income tax returns, W-2s, or other proof of income
- Bank statements
- Investment account statements
- Records of untaxed income
As a college student, you’ll also need the tax, income, and asset information for your parents.
2. Create Your Federal Student Aid (FSA) ID
Your FSA ID is necessary to fill out the FAFSA, sign student loan documents, and look up your account.
You can create an FSA ID online. To do so, you’ll need to provide some information, including your Social Security number and your own mobile phone number or email address. Be sure to keep this information safe and secure by creating your FSA ID through the primary, official FAFSA website.
3. Enter Basic Student & Parent Information
The first portion of the FAFSA asks for your name, mailing address, Social Security number, birth date, driver’s license number, if you have one, and email address. The FAFSA will prompt you to identify yourself as a citizen or eligible non-citizen.
The FAFSA also asks about your high school education and what type of certificate or degree you intend to pursue.
4. Enter the Required Financial Information
Next, the FAFSA prompts you to answer questions about your household finances. The questions concern your income, the current balance of your checking and savings accounts, the total of your investments, and, if applicable, the net worth of your businesses.
If you received untaxed income, such as worker’s compensation or disability benefits, you’ll also be asked to enter information about how much you received.
If you’re considered a dependent for the purposes of financial aid, you’ll be required to submit information about your parents’ incomes and assets, as well. Review the criteria for being considered a dependent student here.
Tip: Save Time Using the IRS Data Retrieval Tool
The IRS Data Retrieval Tool is a helpful way to fill out the FAFSA more quickly. By using the tool — which pops up as an option when you’re filling out the FAFSA online — you can ensure the information you enter exactly matches your tax return.
5. Review Your FAFSA for Accuracy
The FAFSA includes a helpful preview function that allows you to double-check your answers before submitting your application. Once you’ve reviewed and corrected any mistakes, you can submit your FAFSA.
Common mistakes to look out for include:
- Not using the IRS Data Retrieval tool: It’s essential to make sure the FAFSA information you’re submitting matches your tax return.
- Entering the wrong number for your family size: Your household size can affect your financial aid eligibility, so be sure you entered the correct number of people.
- Mixing up parent and student information: Student income and assets are weighted differently than parental assets, so mixing up the fields can affect your aid eligibility.
Bonus Tip: Watch Out for Financial Aid Scams
Unfortunately, there are many scams related to the FAFSA and financial aid. Some of the most common to watch out for include:
- Requesting your FSA ID: Some unscrupulous companies will ask for your FSA ID to help you qualify for aid. Once they have your FSA ID, they can steal your information. Never give out your FSA ID to anyone.
- Asking for fees: The FAFSA is completely free to complete and submit; there is no need to pay anyone a fee to fill it out.
- Paying to apply for scholarships or grants: Some companies will offer to connect you to scholarships or grants — if you hand over your credit card or bank account numbers. Reputable scholarship and grant programs do not require payment information. Instead, you can search for opportunities and apply through The College Board’s scholarship search tool.
What to Expect After Submitting Your Financial Aid Application
After you submit the FAFSA, you’ll receive a FAFSA Submission Summary. This summarizes the information you sent in with the FAFSA and lists your SAI.
The FAFSA Submission Summary is also sent to the colleges you listed on the FAFSA. Once it’s received and you’re accepted for enrollment, the schools will use that information to build your financial aid package.
Understanding what the FAFSA is and how to submit it is a terrific first step in acquiring the financial aid you need for college. With the appropriate preparation, you can fill out the FAFSA and apply for federal, state, and institutional financial aid to help cover continuing education costs.
Once you’ve submitted your FAFSA and maximized your federal aid, private student loans may be able to help bridge the costs of college. Explore loan options from ELFI and get started by checking your rate with no impact to your credit score!
