Buckle up. Sit down. Grab a snack. Take a deep breath.
Whatever you have to do to get ready, do it, because we’re about to give you everything you could ever need to know about the FAFSA.
What is the FAFSA?
FAFSA is an acronym that stands for Free Application for Federal Student Aid. It is a form that collects information to determine a student’s eligibility for need-based aid. This can come in the form of grants, scholarships, work-study, and/or subsidized student loans.
Need-based aid is just as it sounds: financial aid based on financial need. It is given out based on finances not extracurriculars, achievements, or high school performance.
While the FAFSA is primarily used by the federal government to determine federal aid eligibility, it is also looked at by the state government and the majority of colleges and universities.
Who Should File the FAFSA?
We recommended that all undergraduate and graduate students fill out the FAFSA. Even if you think you may not qualify for any financial aid, you should still fill it out for a few reasons:
- The FAFSA determines a student’s eligibility for need-based aid, but it can also provide access to non-need-based federal loans. Because federal loans generally come with lower interest rates than private student loans, you’ll want to take advantage of any federal student loans you can get.
- Some schools only hand out aid to those who’ve completed the FAFSA. Thus, you could miss out on aid given by your college or university if you don’t fill out the FAFSA.
Many students express resistance to completing the FAFSA, deeming it a waste of time because they don’t need loans. However, filling out the FAFSA is still a critical step in the college process. Not filling it could leave you ineligible for some forms of free money such as scholarships and grants. And who doesn’t like free money?
Think of it this way: Even if you spend an hour filling out the form and get nothing, you’ve only lost an hour of your time. But, if you spend the hour and end up getting $1,000 in aid, in a way you’ve just made $1,000/hour. (Sounds like a pretty sweet wage to us.)
How is My Financial Aid Calculated?
The FAFSA utilizes a specific formula that takes into account your Expected Family contribution, student enrollment status, year in school, and the cost of attendance at the school.
Expected Family Contribution (EFC)
Your EFC is a number calculated by your college’s financial aid office to determine how much financial aid you are eligible to receive.
This number is calculated using a formula established by law and uses information such as your family’s income, assets, and benefits. It also takes into account whether you have another family member in college during the same year.
Oftentimes, people assume EFC is the estimated amount of money you or your family will be able to contribute to your education. However, this is not the case. This number estimates how much you could contribute to determine your eligibility for need-based aid.
Student Enrollment Status
The Student Enrollment Status is a basic understanding of how the student is completing school (full-time, part-time, etc). This gives the federal government an understanding of the student’s expenses for attending school. For example, attending school part-time is typically cheaper than attending full-time.
Your Year in School
You can file the FAFSA if you are a(n):
- Undergraduate student
- Graduate student
- Professional student
- Parent of a student (or soon-to-be student)
What differs here is the amount of money you can borrow.
Undergraduate student
The maximum amount you can borrow each year in Direct Subsidized Loans and Direct Unsubsidized Loans ranges from $5,500 to $12,500 per year, depending on what year you are in school and your dependency status.
Graduate or professional student
You can borrow up to $20,500 each year in Direct Unsubsidized Loans. Direct PLUS Loans can also be used for the remainder of your college costs, as determined by your school, not covered by other financial aid.
Parent of a dependent undergraduate student
You can receive a Direct PLUS Loan for the remainder of your child’s college costs, as determined by their school, not covered by other financial aid.
Cost of Attendance
The Cost of Attendance (COA) is exactly what it sounds like: the total cost of attending at your respective college or university. The COA is an all-inclusive estimate of the total cost of attending that institution. It includes everything from tuition and fees to the cost of books, supplies, and transportation.
There may be elements of the COA that you end up not needing. For example, some universities offer health insurance and include this in the COA. Some students who plan to remain on their parent’s health insurance plan or have their own individual plan will opt out of the university-provided insurance. This would then lower the COA.
That said, the university’s full COA estimate is what will be used in calculating financial aid.
To calculate need-based aid, the the following formula will be used:
Cost of Attendance (COA) – Expected Family Contribution (EFC) = Financial Need
Federal aid will try to meet your financial need and supply non-need-based aid where possible. Non-need-based financial aid, however, will not take into account your EFC as it is trying to assist you financially regardless of how much your family earns.
You can get an estimate of your expected financial aid by using a financial aid calculator. Note that this number will not necessarily be what you receive, but it can give you a general idea of where you might land.
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Who is Eligible for Federal Aid Through the FAFSA?
To be eligible for federal student aid provided through the FAFSA, you must:
- Qualify for a college or career school education, which usually means also having a high school diploma or GED
- Be enrolled, or accepted to enroll, in a degree program
- Sign the required statements on the FAFSA, agreeing to use the money only for educational purposes and certifying that you aren’t in default on any other federal aid
- Maintain good academic progress in school
- Have one of the following citizenship statuses:
- US citizen
- US national
- Green card holder
- Refugee, Asylum-granted, Cuban-Haitian, Conditional Entrant, or Parolee
- Battered Immigrant Status
- T-VISA Holder
How Much Money Can I Get From the FAFSA?
The amount you can borrow in federal financial aid depends on your student status and the amount you qualify for. See the section above on student status for some more details and numbers on that.
The following table does a great job in breaking down the maximum amounts for each category of federal aid and the average amount.
Source: Saving for College
How Do I File the FAFSA?
First, you should create an FSA ID (Federal Student Aid ID). Your FSA ID is a username and password combination that allows you to access the FAFSA form electronically. It is also the login that will allow you to manage and sign loan contracts through the myStudentAid app.
Creating your FSA ID ahead of time can save you time when you go to fill out the FAFSA as it can take some time to receive if there are any errors or delays.
Once you have your FSA ID ready to go, you’ll want to collect all the information needed to fill out the FAFSA form. This will make the process a lot easier and smoother. Make sure you have the following information ready:
- Your social security number (Always verify this, and never go off of memory. It is crucial that you enter this correctly on the FAFSA form.)
- Your parent’s social security numbers (if you are a dependent)
- Your Alien Registration number (if you are not a US citizen)
- Tax Information such as tax returns including IRS W-2 information
- If applying as a dependent, make sure you have your parent(s) tax information as well.
- Records of any untaxed income such as child support, veteran benefits, etc.
- Information on cash you may have, such as bank account (checking and savings) information, investments such as stocks and bond, ad business assets
While most people opt to complete the form electronically, there are 4 total options for filling it out:
- Online through the FAFSA.gov portal
- Through the myStudentAid mobile app (available through the App Store or Google Play)
- Through the FAFSA PDF (you print and mail in)
- By calling 1-800-4-FED-AID (they print and mail you the form; you mail it back for processing)
When do I file the FAFSA?
The FAFSA will become available to you on October 1st of the year before you plan to attend college. The exact deadline to file the FAFSA will change each year, but it is typically at the end of June.
That said, we recommend applying much earlier than the actual deadline and as close as you can to when the form opens. Most colleges operate on some form of a first-come, first-served basis and will deal out aid based on when the forms were received.
Other Common FAFSA Questions:
Do I have to pay to fill out the FAFSA?
No! As its name implies, it is free to fill out and submit the FAFSA.
Do you need a certain GPA for FAFSA?
To remain eligible for federal financial aid, students must maintain Satisfactory Academic Progress. This generally means obtaining at least a 2.0 GPA on a 4.0 scale (around a C average). That said, you don’t need to have a specific GPA to fill out the form.
Do You Have to Pay Back Aid from the FAFSA?
This depends on the type of aid you get. You will need to pay back any loans you accept, but you won’t have to pay back scholarships or grants.
This is why it’s important to always accept aid in the following order: free money (i.e. scholarships, grants), earned money (i.e. work-study), borrowed money (i.e. federal student loans).
Student loan rates from our partners
Ascent
Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills, or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 11/1/2024 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest rates require full
principal and interest payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the repayment examples above, based on the amount of time you spend in school and any grace period you have before repayment begins.
Ascent’s undergraduate and graduate student loans are funded by Bank of Lake Mills, or DR Bank, each Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: www.AscentFunding.com/Ts&Cs. Rates are effective as of 11/1/2024 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates. 1% Cash Back Graduation Reward subject to terms and conditions. Cosigned Credit-Based Loan student must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest rates require full
principal and interest payments, the shortest loan term, a cosigner, and are only available for our most creditworthy applicants and cosigners with the highest average credit scores. Actual APR offered may be higher or lower than the repayment examples above, based on the amount of time you spend in school and any grace period you have before repayment begins.
LendKey
1 – Terms and Conditions Apply
Loan products, terms, and benefits may be modified or discontinued by participating lenders at any time without notice. Rates displayed are reserved for the most creditworthy consumers who enroll to make automatic monthly payments. Your initial rate will be determined after a review of your application and credit profile. Variable rates may increase after consummation. You must be either a U.S. citizen or Permanent Resident in an eligible state and from an eligible school, and meet the lender’s credit and income requirements to qualify for a loan. Certain membership requirements (including the opening of a share account, a minimum share account deposit, and the payment of any applicable association fees in connection with membership) may apply in the event that an applicant wishes to apply with, and accept a loan offered from, a credit union lender. If you are not a member of the credit union lender, you may apply and become a member during the loan application process if you meet the lender’s eligibility criteria. Applying with a creditworthy cosigner may result in a better chance of loan approval and/or lower interest rate. Loans for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not available via LendKey.com.
2 – Cosigner Release
Some lenders participating on LendKey.com may offer the benefit of cosigner release. Cosigner release is subject to lender approval. In order to qualify, the borrower, alone, must meet the following requirements: (1) Make the required number of consecutive, on-time full principal and interest payments as indicated in the borrower’s credit agreement during the repayment period (excluding interest-only payments) immediately prior to the request. Any period of forbearance will reset the repayment clock; (2) The account cannot be in delinquent status; (3) The borrower must provide proof of income indicating that he/she meets the income requirements and pass a credit review demonstrating that he/she has a satisfactory credit history and the ability to assume full responsibility of loan repayment; (4) No bankruptcies or foreclosures in the last sixty months; and (5) No loan defaults.
3 – Autopay Rate Reduction
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments.
4 – AutoPay Discount & Lowest Interest Rate
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised APR is only available for loan terms of 10 years and is reserved for the highest qualified applicants, taking into consideration the applicant’s credit and other factors.
1 – Terms and Conditions Apply
Loan products, terms, and benefits may be modified or discontinued by participating lenders at any time without notice. Rates displayed are reserved for the most creditworthy consumers who enroll to make automatic monthly payments. Your initial rate will be determined after a review of your application and credit profile. Variable rates may increase after consummation. You must be either a U.S. citizen or Permanent Resident in an eligible state and from an eligible school, and meet the lender’s credit and income requirements to qualify for a loan. Certain membership requirements (including the opening of a share account, a minimum share account deposit, and the payment of any applicable association fees in connection with membership) may apply in the event that an applicant wishes to apply with, and accept a loan offered from, a credit union lender. If you are not a member of the credit union lender, you may apply and become a member during the loan application process if you meet the lender’s eligibility criteria. Applying with a creditworthy cosigner may result in a better chance of loan approval and/or lower interest rate. Loans for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not available via LendKey.com.
2 – Cosigner Release
Some lenders participating on LendKey.com may offer the benefit of cosigner release. Cosigner release is subject to lender approval. In order to qualify, the borrower, alone, must meet the following requirements: (1) Make the required number of consecutive, on-time full principal and interest payments as indicated in the borrower’s credit agreement during the repayment period (excluding interest-only payments) immediately prior to the request. Any period of forbearance will reset the repayment clock; (2) The account cannot be in delinquent status; (3) The borrower must provide proof of income indicating that he/she meets the income requirements and pass a credit review demonstrating that he/she has a satisfactory credit history and the ability to assume full responsibility of loan repayment; (4) No bankruptcies or foreclosures in the last sixty months; and (5) No loan defaults.
3 – Autopay Rate Reduction
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments.
4 – AutoPay Discount & Lowest Interest Rate
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised APR is only available for loan terms of 10 years and is reserved for the highest qualified applicants, taking into consideration the applicant’s credit and other factors.
Earnest
Student Loan Origination (Private Student Loan) Interest Rate Disclosure:
Student Loan Origination (Private Student Loan) Interest Rate Disclosure:
College Ave
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1) All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.
(2) As certified by your school and less any other financial aid you might receive. Minimum $1,000.
(3) This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 11/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community Bank, member FDIC, or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1) All rates include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. If a payment is returned, you will lose this benefit. Variable rates may increase after consummation.
(2) As certified by your school and less any other financial aid you might receive. Minimum $1,000.
(3) This informational repayment example uses typical loan terms for a freshman borrower who selects the Flat Repayment Option with an 8-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 7.78% fixed Annual Percentage Rate (“APR”): 54 monthly payments of $25 while in school, followed by 96 monthly payments of $176.21 while in the repayment period, for a total amount of payments of $18,266.38. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 11/1/2024. Variable interest rates may increase after consummation. Approved interest rate will depend on creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of the Flat Repayment Option with the shortest available loan term.
Final Thoughts from the Nest
The FAFSA can seem overwhelming due to its length and complexity. However, preparing ahead of time can make the process more seamless. For the easiest process, come prepared with the information you need and fill it out electronically.
If you find that the financial aid package you ultimately receive doesn’t cover your total cost of attendance, private student loans may be the next step. In that case, make sure to fill out the Sparrow form to see what lenders you pre-qualify with to get the best student loan.