What kind of financial aid is fafsa

While your state, school choice, and a few other elements e. Student loans fall into one of two categories: federal and private. There are two key differences between federal and private loans. The first is that federal loans have lower interest rates.

The second is that federal loan repayment programs offer greater flexibility. Both subsidized and unsubsidized loans are granted at the beginning of a semester, and neither is required to be paid back until after you graduate or otherwise disenroll from your school.

The big difference between subsidized and unsubsidized loans is when you start paying interest. An unsubsidized loan gains interest just like a private loan would: starting the day you take it out. Interest payments are still required throughout your time in school. Your personal interest payments will begin only after you graduate, along with the rest of your loan payments.

Plus, she mentioned, if you are earning an income while in school , you would be better served by putting that money toward paying for your next semester upfront and skipping the loans altogether rather than paying down a growing debt. The fewer loans you take out, the less interest you pay. The less interest you pay, the cheaper college will be. First, PLUS loans require a credit check. This means if you fail to pay it back, the loan burden will default to your parents.

Second, at 5. Her family was one of the many who decided the potential dangers of applying for this type of loan outweighed the benefits of college.

While the loan portion of financial aid is what most students qualify for, there is a happier side to the process. A grant is a free gift of money that the recipient is not required to pay back except under certain conditions like if you disenroll early or make a similar change that alters your eligibility.

If you qualify for a grant, we recommend you take it before considering any of the student debt options we mentioned above. Each year, this money is distributed among applicants based on their need. The FAFSA is the official form that students or their families use to apply for financial assistance for college from the federal government.

States, individual colleges and universities, and private scholarship programs rely on the information provided in the application as well. Those assets include bank accounts and investments but excludes the value of retirement accounts, life insurance policies, and annuities.

Any equity in the family home is also excluded. The information you supply on the FAFSA determines whether you qualify for need-based aid, non-need-based aid, or some combination of the two. Grants are the most attractive type of financial aid because they do not need to be repaid.

Pell Grants , the main federal grants for college, are intended for students with "exceptional financial need. A college or university's financial aid office determines how much money students qualify to receive, based on their family's EFC and the school's cost of attendance COA.

These grants also do not need to be repaid, but they are only available at certain schools. As with Pell Grants, these supplemental grants are meant for students with few other financial resources. These loans are subsidized by the government, which means that will not be required to pay interest on them while you are in school and for a grace period of six months after you graduate. These subsidized loans are not available for graduate study.

The federal work-study program makes paid part-time jobs available through participating colleges and universities. Both undergraduate and graduate students may be eligible. Federal loans, whether subsidized or unsubsidized, tend to be less costly than private loans and have more flexible repayment options. If students or their parents don't pay the interest during this time period , it will be added to the principal of the loan. Schools can offer these loans as part of a financial aid package regardless of a family's financial situation.

These loans are intended for parents or graduate students. To qualify, the student must take certain classes and, within eight years of graduation, have worked for at least four years in an elementary or secondary school or educational service agency that serves low-income families.

These grants don't have to be repaid unless the student fails to fulfill the requirements, in which case the grant is converted into a direct unsubsidized loan. The U. Department of Education uses the FAFSA application to determine a student's eligibility for need-based federal financial aid for college based upon their financial situation.

It is simply an application that you fill out in order to determine your eligibility for receiving a federal loan. There are three main types of financial aid that a student may be deemed eligible for after completing a FAFSA application.

Some of this money is free money, some must be earned through work, and some must be repaid. The most general eligibility requirements to qualify for the various forms of federal student aid include that you have financial need, are a U. However, there are more eligibility requirements you must meet to qualify for federal student aid and these requirements are specific, based on the type of aid.

The majority of students are eligible to receive some type of financial aid from the federal government to help pay for college or career school. The age of the student, race, and field of study are not taken into account when determining their eligibility.

To be considered for federal student aid for the — award year, you needed to complete a FAFSA form between Oct. Most families—regardless of how much they earn or have accumulated in assets—will find it useful to fill out FAFSA. If it turns out that they are ineligible for free money in the form of grants or scholarships, they are still likely to be eligible for non-need-based aid in the form of direct unsubsidized loans from the federal government.

Federal student loans typically have more favorable terms than loans from private lenders and offer a variety of flexible repayment options.

Talk to your financial aid office to explain your circumstances in more detail and find out if you qualify for more aid. The major difference between the dependent and independent student classification on the FAFSA is that, as a dependent student, your parents' income and assets are factored into how much aid you get. As an independent student, you only include information about your household income, which includes you and your spouse if you're married.

So in thinking about how you're going to pay for it, the challenge is figuring out how much things cost. Fortunately, by federal statute, universities, no matter if it's residential or online, are required to provide the cost of attendance.

The mechanisms for applying for financial aid should also be clearly displayed on the university's website to help you kind of navigate your options. Yes, most accredited online schools that offer two- and four-year degrees do accept the FAFSA, and online students are eligible based on the same criteria as their on-campus counterparts.

The process for applying for financial aid as an online student is the same as it is for students who attend on campus. Federal and state financial aid through the FAFSA will cover online classes, but some institutional grants or scholarships may be only available to campus-based students.

Some schools also have scholarships and grants specifically for online or distance learners. If you plan to attend college online and believe you'll need financial aid, start by checking the school's website for federal aid information to confirm the school accepts the FAFSA. If the answer is not readily available there, contact the school you're planning to attend to ask whether the school accepts the FAFSA. Department of Education's Database of Accredited Postsecondary Institutions and Programs to see if your intended school is listed.

One of the most common issues students face is accidentally answering questions wrong because they aren't aware of the specific definitions on the FAFSA for things like who to include in the household size.

Make sure to check these to avoid common errors that could delay your financial aid award. The Federal Student Aid office help center also allows students to type in their questions and find answers on the website. You can add or remove colleges, change your email or address, and correct any other issues. The only thing you can't change is your Social Security number. If you have problems with your FSA ID, you can select "forgot username" or "forgot password" to reset either of these.

If you still have difficulties accessing your account, you should call the FSA helpline to get them resolved. Students can learn more at getfafsahelp.

Completing the FAFSA is one of the biggest and most exciting steps students take towards making their college plans a reality. While it feels good to be able to put the paperwork behind you, you might be wondering what to expect next. After you complete the application, it goes to the U.

Department of Education for processing. If you submit online, it should be processed within three to five days. If you mailed in a physical copy, it should be processed within days. You can check the status of your application by logging into fafsa. If you submitted online, the status of your application will be available right away. If you mailed in a paper copy, the status should be available online around days after you mailed it. You can check the status to see if your application is still processing, has been processed, is missing signatures, or if there are any other issues that need attention.

Check this to make sure the information you included in your application is accurate. Some students may be selected for verification, which requires the submission of additional documents to the college to show the information provided on the FAFSA is accurate. Your SAR may say you've been selected, or your school's financial aid office could contact you.

This happens less frequently for students who use the IRS data retrieval tool to input their information. If you're selected for verification, it's best to get the required paperwork in as soon as possible.

The process can take anywhere from a few days to four weeks, depending on the student and school. Don't feel like it's saying you don't belong or you're not allowed to go to school. Ask for some clarification from your financial aid office, maybe your high school counselor, maybe if you have an older sibling or cousin who's gone through college, ask them about it.

Asking questions is the best thing you can do. If you apply and are accepted to a school, the financial aid office at that school will determine how much aid you can receive based on your EFC and the cost of attendance COA , a number calculated by the school that includes tuition and fees, room and board, and other educational expenses.

They'll award you any federal, state, and school aid that you qualify for, including work-study and federal loan offers. You should review your aid award and make sure to ask any questions you may have.

Some aid packages might be confusing because gift aid and loans are both included in your aid award letter. Ensure you know exactly how much gift aid you are offered, how much it will cost you to attend that college, and how much funding you'll need to borrow in student or private loans to make up the difference. If you are considering multiple schools, you can weigh each financial aid package's pros and cons to help determine which college is the best choice for you.

You will need to accept or decline your financial aid offers by a certain date set by your school. You must re-submit the FAFSA each year to get financial aid for the next year, and your award may change based on factors such as your age, income, or your year in school. FAFSA renewal is typically a much easier process than the initial application because the form is pre-filled with some information from the previous year.

Most students just need to update income and tax information and anything else that has changed. Many families have gone through significant financial changes since the start of the COVID pandemic. Higher education experts are also concerned by the decrease in students completing the FAFSA this year, which are often seen as an indicator of future enrollment rates.

The data also shows a more significant drop in FAFSA completion rates at high schools that serve more students of color.

First and foremost, if your family's financial situation changes after you submit your application or receive aid offers from your school, you should contact your financial aid office to see what adjustments they can make. You are required to use your tax information for the school year FAFSA, even if your financial situation has changed since then.

If this is the case, you will need to contact the financial aid office at your school to explain the change in income and find out what your options are. They will be able to factor these changes in when creating your financial aid package. Students whose financial situation changes after they already receive their award can also ask for an appeal, or professional judgement.

You can ask for an appeal based on many different changes, including a job loss, a reduction in work hours, someone in the household having a child, or anything else that may change your ability to pay for school.

Students interested in requesting an appeal can use Swift Student , a free online resource that provides appeal letter templates. Swift Student also provides information on how to ask for additional funding to cover childcare costs, financial emergencies, to purchase a computer for school, and many other financial needs that may not be captured by FAFSA. This resource will walk you through how to ask for an appeal, what information you'll need, and how to submit the letter to your financial aid office.

If there's any significant change in the household's financial status, students have the right and responsibility to go and appeal their financial aid eligibility because all of that can make a difference between receiving a Pell Grant and not receiving a Pell Grant or being awarded subsidized loans or being awarded an unsubsidized loan.

It's really critical that students know that they can always come back and appeal based on circumstances. This means you could qualify for additional funding. Dependent students are required to provide information about parent income on the FAFSA to determine their aid eligibility. But who counts as a parent? For the FAFSA, a parent is defined as a biological or adoptive parent or someone who the state has determined to be the child's parent. This means that legal guardians, grandparents, foster parents, widowed stepparents, and other family members will not count as a parent unless they've legally adopted the student.

Students who are considered dependent but are not able to provide parent information should still complete the FAFSA but will need to work with their school's financial aid office to determine what options they have. More information is available on the Federal Student Aid website.

Many parents are confused as to why their student needs information about their parents' income to apply for financial aid, especially if they no longer support their child financially or won't be paying for their college expenses. Even if you do not support your child financially, the federal government still considers many students to be financially dependent on their parents to pay for part of their education.

Providing information about your income and assets does not obligate you to take on any responsibility for educational costs, and it won't affect you financially in any way.

The government only uses this information to calculate how much financial aid your child is eligible for. If your child is considered dependent on the FAFSA and you do not want to provide your information, they will not be able to qualify for any financial aid, including federal student loans under their name.

It is better for the student if the parents submit their information. They're not required to take out any loans or any types of aid, they're not signing anything, even though they sign the FAFSA, they're not signing to take on a loan.

All of that is optional. But it is in the best interest of the student for them to do that, because it makes the student eligible for the most aid in the student's name. If you're a parent helping your student fill out the FAFSA, one of the most important things you can do is make sure you have all the information they'll need. Having things like your W-2 and federal tax return ready when it comes time to fill out the application will make the process much easier.

You'll need to create this using your Social Security number, full name, and date of birth. You'll want to use your full name that is on record with the Social Security Administration. Do not use a Taxpayer Identification Number. You also won't be able to make an FSA ID, so you'll need to sign a physical copy of the application instead of signing electronically. Your child can complete the application online through the federal website and select the option to print a signature page at the end.

Print and sign this page, and then mail it to the address on the form. As a parent, you have the option to take out a Parent PLUS loan to help cover the cost of your child's education.