However, that personal and professional investment does come with a very significant financial one, right at the offset. The past decade has seen tuition costs rise by nearly 30 percent. And with the average undergraduate student finishing school with over $35,000 in debt, the class of 2015 has been declared the most indebted ever. Over a million students are graduating with student loan debt this year, adding to the current one trillion dollars in student debt nationwide. Sadly, with every passing year college is becoming too cost-prohibitive for some, especially those starting from a place of greater financial need. When the extra income potential of a degree is leveraged against those increasing tuition costs – and the long-term debt that could come with them – more students than ever are left debating the financial value of higher education.
But, these numbers shouldn’t discourage you from pursuing a postsecondary degree. In fact, knowing these figures can be an asset and a motivator, if they encourage you to make a plan at the beginning to limit your debt potential at the end, thereby increasing the value of your degree. The career benefits of a college education are undeniable. They key is reducing the cost of the degree required to achieve them. That process starts with the FAFSA.
What is the FAFSA?
The Free Application for Federal Student Aid is a form that acts as the gatekeeper to all of the student financial assistance programs authorized under Title IV of the Higher Education Act. The HEA is the federal law meant to strengthen the educational resources of colleges and universities, solidify and expand the federal government’s involvement in higher education policy, and govern the administration of federal student aid programs. Title IV sets aside federal funds to support grants, loans, and work-studies to help those students with financial need attend college.
Who should fill out the FAFSA?
Everyone. Put simply, the FAFSA is an application for money. Every year countless students fail to submit a FAFSA because they assume that they make too much money, don’t have the grades, or are too old to qualify for financial aid. None of those could be farther from the truth. There are enough different programs and opportunities available that everyone could potentially qualify for some form of assistance, even if it’s only in the form of a federal student loan. The financial and personal information you provide on the FAFSA determines which, if any, of those federal aid programs you qualify for. There are also a number of state-level and school-sponsored assistance programs that rely on the FAFSA for qualification. But you’ll never know if you don’t take the time to fill out the FAFSA. If you’re prepared, the process is simple, and with all of those potential benefits available, the FAFSA may be the single-most important college-related document you fill out.
Types of Assistance
The Title IV programs authorized under the Higher Education Act account for the majority of student aid available today. The current budget provides over 140 billion dollars in financial assistance to students. These programs include a combination of grants, loans, and work studies. Of the total volume of funds distributed, the individual programs break down to:
- Loans: 80%
- Grants: 18%
- Work-study: 2%
Each type of program has its own benefits and requirements. Understanding the differences is key to minimizing costs and maximizing the value of your degree.
Like any home, car, or personal finance loan, a federal student loan is money that must ultimately be paid back to the lender, in this case, the U.S. government. Initially, because the loans must be repaid, they might not seem like an attractive aid option for someone looking to minimize the cost of college. However, there are several benefits which make federal student loans more appealing than private loans. Some of those include:
- reduced interest rates
- consolidation options
- extended and deferred payment options
- income-based repayment
- approvals with no extensive credit history or a cosigner
There are four types of federal student loans:
Available to undergraduate students with demonstrated financial need. Your school determines the loan amount, which may not exceed your financial need.
The U.S. Department of Education pays the interest:
- while you’re in school at least half-time
- for the first six months after you leave school
- during a period of deferment (a postponement of loan payments).
Available to undergraduate and graduate students, with no requirement to demonstrate financial need. Your school determines the loan amount based on tuition costs and other financial aid you receive.
You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods.
A traditional loan for graduate students in which The U.S. Department of Education is the lender. These loans are typically used for extra costs not covered by the Direct Subsidized loan. The borrower must not have a poor credit history. The maximum loan amount is the student’s tuition cost minus any other financial aid received.
A low-interest loan available to undergraduate, graduate, and professional students with exceptional financial need. The school is the lender and all payments are made to the institution.
- Interest rate for this loan is 5%
- Not all schools participate in the Federal Perkins Loan Program
- Funds depend on your financial need and the availability of funds at your college
For the most part, federal student loans are an undeniably better option than private student loans, which currently account for over $140 billion of outstanding student debt. However, despite their lower rates and flexible payment options, federal loans are still loans that must be paid back with interest. Keep that in mind when deciding how much loan money, if any, to accept.
Unlike student loans, grant money doesn’t need to be repaid. It is essentially a free gift from the federal government, based on your financial need, to be used toward your college education. Of the federal aid programs, they go the farthest in reducing the cost and maximizing the value of your degree.
There are currently four types of federal grants available:
Federal Pell Grants
Awarded to undergraduate students who have not earned a bachelor’s or professional degree. The maximum award is $5,775 and is based on:
Note: You cannot receive Pell Grants from more than one school at a time, or for more than 12 semesters.
Federal Supplemental Educational Opportunity Grants (FSEOG)
Campus-based grant administered by the financial aid office. Not all schools participate. Award amounts range from $100 to $4,000 a year, based on financial need and availability of funds.
Teacher Education Assistance for College and Higher Education Grants
Provides up to $4,000 a year to completing coursework for a teaching degree. The program requires that specific teaching-related courses be taken. You must also agree to teach:
If the requirements aren’t met, the grant turns into a loan and must be repaid with interest.
Iraq and Afghanistan Service Grants
Rewarded to students whose parent or guardian was a member of the U.S. armed forces and died as a result of military service performed in Iraq or Afghanistan after the events of 9/11 and who:
The award amount is equal to the amount of a maximum Federal Pell Grant.
Work studies are the least distributed form of aid, and also the most unique. Federal work study programs provide part-time jobs for students with financial need, allowing them to earn money for education expenses. The programs emphasize community service and work directly related to your course of study. Most likely, the jobs will be on-campus working for the school, or off-campus at a non-profit organization serving the public interest. The amount of money earned varies depending on the job duties. All funds are administered by the school. You can either choose to be paid directly, or have the money applied directly to your tuition and fees.
State-level and School-sponsored Aid
Many states have their own student financial aid programs, as do many schools. The information submitted through the FAFSA is also used to qualify for those state-level and school-sponsored programs, so it is doubly important to fill out the form, even if you think you won’t qualify for your desired federal program.
Eligibility and Dependency
Like any application, filling out the FAFSA is a request, not a guarantee of acceptance. Every program and award – whether at the federal, state, or school level – has its own eligibility requirements. The criteria varies based on financial need, dependency status, availability of funds, and a number of other factors. However, there are far less eligibility requirements to simply fill out an application in order to be considered for student aid.
To submit a FAFSA, you must:
- be a U.S. citizen, a U.S. national, or an eligible non-citizen
- have a social security number
- have a high school diploma or equivalent
- not currently owe refunds on federal student debts.
- not be in default on any student loans.
- not have been convicted of a drug or sexual offense
- be registered with U.S. selective service if a male aged 18-25
Dependency Status and EFC
One of the key numbers that the U.S. Department of Education uses to determine your financial need is your Estimated Family Contribution, or EFC. Whether it actually proves to be the case or not, the government assumes that all students will receive some form of tuition assistance from their parents. The EFC is determined by the DOE based on your parents or legal guardians’ financial information that must be submitted as a part of the FAFSA.
The first step in determining your EFC is establishing your dependency status. Being classified as either a dependent or an independent student greatly affects your EFC number, and therefore how much aid you qualify for.
If your parents can claim you as a dependent on their tax return, then you automatically qualify as a dependent on the FAFSA. You must include their financial information on your application so that it can be assessed along with yours in order to determine your EFC. However, not living with parents or not being claimed by them on tax forms does not necessarily make you an independent for federal aid purposes. You can still be seen as a dependent student in the eyes of the government, whether you a financially independent or not.
In order to only apply as an independent, one or more of the following must apply to you:
- You will be 24 or older by Dec. 31 of the school year for which you are applying
- You will be working toward a master’s or doctorate degree
- You are married or separated, but not divorced
- You have children who receive more than half of their support from you
- You have dependents (other than children or a spouse) who live with you and receive more than half of their support from you
- At any time since you turned age 13, both of your parents were deceased, you were in foster care, or you were a ward or dependent of the court
- You are an emancipated minor
- You are an unaccompanied youth who is homeless or self-supporting and at risk of being homeless
- You are currently serving on active duty in the U.S. armed forces for purposes other than training
- You are a veteran of the U.S. armed forces
If you are determined to be a dependent student, it is extremely important to include your parents’ financial information as a part of your FAFSA, even if you know they have no plans to help you with tuition. If you don’t disclose the required information, your application will be rejected and you won’t qualify for any federal aid.
Everyone’s parentage and family situation differs, so there can be some confusion about whose financial information to list. In those instances, the Department of Education provides the following guidelines:
Your only have one parent
If your legal parent is widowed or was never married, only answer the questions about that parent.
Your parents aren’t married
If your parents are not married, yet living together, answer the questions for both.
Your parents are divorced
You have a stepparent
You are in foster care
You do not need to answer the questions for your foster parents unless they have legally adopted you.
If you feel you have a parentage status not addressed by these options on the FAFSA, you should immediately contact your school’s financial aid office for advice on how to proceed.
The government does realize that there are unique situations in which a student who is classified as a dependent may not have contact with their parents. In these special cases, you should fill out the FAFSA minus the parents’ financial information, then immediately consult with your school’s financial aid office about the next steps.
Those circumstances are:
- Your parents are incarcerated.
- You have left home due to an abusive family environment.
- You do not know where your parents are and are unable to contact them (and you have not been adopted).
- You are older than 21 (but not yet 24), are unaccompanied, and are either homeless or at risk of being homeless.
The option to report a special circumstance is only available on the electronic version of the FAFSA, not the paper or PDF versions.
It is very important to include all of the requested information on the FAFSA, which is why it is suggested that you consult with a financial aid counselor if one of these special circumstances applies to you. Any blank fields can be interpreted as an incomplete application and may prevent your application from being fully processed.
Filling out the FAFSA can seem like a daunting, arduous task, given all of the information it requires. However, if you’ve done enough research ahead of time, such as utilizing this guide or the one provided by the Department of Education, the process is quite simple and straightforward. Even so, there are still a few more things you can do to save more time.
The FAFSA asks for certain facts and figures that most likely won’t be easily recalled from memory. To expedite the process, it’s recommended that you have the following documents ready and accessible:
- Social Security number
- Parents’ Social Security numbers (if dependent)
- Driver’s license number (if you have one)
- Alien Registration number (if applicable)
- Federal tax returns and W-2 information for you, your spouse (if married), and your parents (if dependent)
- Records of any untaxed income, such as child support, interest income, and veterans benefits, for you and your parents (if dependent)
- Bank statements indicating current account balance information, as well information on all investments and holdings, for you and your parents (if dependent)
- A ordered list of desired schools
Another key factor in calculating your financial need is a school’s cost of attendance. In order to figure that amount, and then determine the type and amount of aid available to you, your FAFSA information is submitted by the Department of Education to the school you wish to attend. Because of this, the FAFSA requires that you list at least one school on the form.
This list isn’t a commitment to enroll in that school. It’s understood that you may be applying to multiple schools and making your decision based on how much aid is rewarded to you. Therefore, the FAFSA allows you to list multiple schools that your completed information will be sent to, much like your SAT and ACT scores when you first register for testing. The electronic FAFSA allows you to list a total of ten schools, while the paper versions allow four.
For federal purposes, the order in which you list the schools doesn’t matter. The DOE doesn’t give preference to any single one and it doesn’t affect the results in any way. However, the FAFSA is also used to determine eligibility for state-level benefits and some states do have their own requirements. For example, many require that you list an in-state school first. If you list an out-of-state school, they may not consider you for state benefits, regardless of whether you’ve actually decided to relocate or not. So, it may be a good idea to make a prioritized list based on your state’s requirements before filling out the FAFSA.
Never leave any question on the FAFSA blank, even if it doesn’t apply to you. Too often, forms with blank fields are flagged as “incomplete” by reviewers and are not fully processed. This can slow down the process and jeopardize your aid package for the school year, depending on how close to the deadline you submitted your application. If you know that a question isn’t relevant to you, always put a “0” or N/A” instead of leaving an empty field.
Submitting the FAFSA
There are three ways to fill out and submit your Free Application for Federal Student Aid:
The simplest option is filling out the FAFSA electronically through the DOE’s official Federal Student Aid website. Benefits of online application include:
If you are filing online, you will need to obtain an FSA ID in order to electronically sign your FAFSA. It’s recommended that you register for your ID before starting to application process.
The FAFSA can be downloaded as a PDF file, filled out manually, and mailed for processing.
Traditional paper copy
You can obtain a paper copy of the FAFSA in several ways:
Electronic applications take 3-5 days to process, while paper applications can take 7-10.
Also keep in mind that, however you choose to apply, the FAFSA is a free process. Beware of any organizations or websites charging money to submit a FAFSA on your behalf. If filing electronically, always do so at the official FAFSA website.
Student Aid Report
After filling out and submitting the FAFSA, you will receive your Student Aid Report (SAR). If you filed electronically, or included a valid email address on your FAFSA, you will be emailed instructions on how to access an electronic copy of your SAR. If not, a paper copy will be mailed to you within 7-14 days after of processing.
The SAR contains your official Estimated Family Contribution, based on the financial information you provided on the FAFSA. The Student Aid Report does not outline the benefits you are eligible for. It is essentially a copy of your completed, processed FAFSA that now includes your EFC. It is simply for your records. The schools listed on your FAFSA will also receive an electronic copy of your SAR within a day of processing. They will then use the EFC information to curate a financial aid package for you.
If you file your FAFSA electronically but did not provide an email address, you will be mailed an SAR Acknowledgement form instead of a paper or electronic SAR. The Acknowledgement will direct you to return to FAFSA website to retrieve your SAR and make any corrections. If you are filing electronically anyway, make sure to include an email address (if possible) in order to avoid this extra step.
There are several instances in which you may need to make changes to your FAFSA after it has been filed:
- Corrections: If you notice any mistakes in your FAFSA information on your SAR
- Updates: If your situation has changed in any way since filing, such as a change in your household or dependency status
- School Changes: If you wish to add or change the schools you want to receive your FAFSA
If you need to make any of these changes, and you filed electronically, you can easily log back into the FAFSA website and make them there. You will receive an updated SAR within 1-5 days. If you received a paper SAR, it will have spaces next to every field for any corrections. You can then send the updated form to the enclosed address. You will receive an updated SAR in 7-10 days. Your listed schools will also receive an electronic version of your updated report.
The FAFSA comes with strict deadlines for submittal. If you miss a deadline, it is nearly guaranteed that you won’t be eligible for financial aid for that school year. The easiest way to avoid this is to fill it out as soon as possible. The form becomes available every year on January 1. If you do wait to submit your application, keep in mind that different programs have different deadlines.
The deadline to apply for federal student aid is June 30 of each year. If you miss the deadline, you will have to wait until the next 1/1 – 6/30 application period to be eligible for assistance.
State-level financial aid programs have their own, separate deadlines. They can vary greatly from state to state and also from program to program. Some states have separate deadlines for first-time applicants as opposed to renewals. To make things easier, we’ve created a map of all state deadlines.
NOTE: These deadlines are for the 2015-2016 school year. The government has not released deadlines for the 2016-2017 year yet. When they do we will update accordingly.
Find Your State’s FAFSA Deadline
Many schools also have their own financial aid programs that utilize the information from the FAFSA in order to determine eligibility. These programs can have their own deadlines separate from even the federal and state cutoffs. Be sure to check with your school’s financial aid office for any relevant FAFSA deadlines.
Availability of Funds
Regardless of deadlines, it is always a good idea to submit your FAFSA as soon as possible. Every federal, state, and school program only has a limited amount of funds set aside in their budget for student aid. Currently, the Department of Education processes 22 million FAFSA submissions every year, with federal funds distributed through nearly 62,000 schools. The earlier you get in that line, the better your chances of being awarded some of that assistance.
One of the most important things to remember is that your FAFSA application does not carry over year to year. So many students assume that once their aid is awarded, the package is valid until graduation. In order to be eligible for assistance, you must resubmit your FAFSA during every application period. If you filed your FAFSA electronically, the renewal process is simple. All you need to do is log back into your FAFSA account and resubmit. All of your previous year information will be automatically populated into the fields. If any information has changed, it’s simple to update.
If you filed a paper FAFSA, you will need to fill out a new form.
A lot of information goes into the FAFSA, and the way in which the EFC and potential aid are calculated can be complicated, but the process of filling out and submitting the form is actually quite simple. To make it even simpler, remember these quick tips:
Apply early: There are only a limited amount of funds available. Apply as soon as possible after the submittal period begins on January 1. Any applications received after the June 30 deadline will not be processed.
Apply often: Your FAFSA does not carry over year to year. In order to stay eligible for benefits, you need to re-apply every year.
Gather all of your documents: In order to speed up the process, make sure to have all relevant documents for you and your parents (if dependent): social security numbers, bank statements, tax records, etc.
Determine your dependency: Being independent in the eyes of society, doesn’t necessarily make you independent in the eyes of the government. If you are determined to be a dependent for aid purposes, you must include your parents’ financial information on your FAFSA, with a few exceptions for special circumstances.
Prioritize your school list: It won’t affect your federal aid, but some state-level and school-sponsored aid programs have specific requirements for your FAFSA school listing.
Don’t skip questions: If there are any questions on the FAFSA that don’t apply to you, make sure to fill in a “0” or “N/A.” If there are any blanks, you run the risk of your application being flagged as incomplete and not fully processed.
Understand the differences in the types of aid:
- Loans: Money that must be paid back. Subsidized loans are interest-free while you’re in school. Unsubsidized accrue interest which must be paid, even while you’re in school.
- Grants: Money that doesn’t need to be repaid.
- Work study: Money given in exchange for school-sponsored jobs.
Don’t pay: The FAFSA is a free application process. You never need to pay a third-party company or website to fill out and submit a form on your behalf.
Frequently Asked Questions
How long is the application process?
If you’ve gathered all of your financial information ahead of time, filling out the application should only take about 30 minutes. If you file electronically, it should process in 3-5 days. If you mail in a paper form, it takes 7-10.
What about the FAFSA questions that don’t apply to me?
You should never leave any field on the FAFSA blank. If it gets flagged as “incomplete” by a reviewer, it will not fully process. If you know a question doesn’t apply to you, enter a “0” or “N/A.” If you have any doubts, consult with your school’s guidance or financial aid office.
What if I don’t have all of the financial information for my parents?
If you are classified as a dependent for aid purposes, you must include your parent’s information. There are a few special circumstances where you can forego that information, but if they don’t apply to you, that information is critical. If you absolutely can’t obtain it, you can enter “No” when prompted for it by the FAFSA. However, you are unlikely to qualify for any aid other than an unsubsidized loan without it.
How does the IRS Data Retrieval tool work?
If you are filling out your FAFSA electronically, and you have already filed your taxes for the year, you save a lot of time by using the IRS Data Retrieval Tool to automatically fill in the tax information for both you, and your parents.
The DRT is available to everyone except the following, who will have to fill in the information manually:
- Those who are married, but filed as Married Filing Separately
- Those are married and filed as Head of the Household
- Those who filed a form 1040X amended tax return
- Those who filed a Puerto Rican or foreign tax return
Keep in mind that if you just filed your taxes, it will take several weeks for that info to be available in the IRS DRT.
If I live with someone other than my parents, should I report their financial information?
You only need to submit financial information for your biological or adopted parents.
I live on my own and support myself. Can I file as an independent?
Being independent in the eyes of the IRS and in the eyes of the Department of Education are two completely different things. Check the FAFSA’s very specific list of qualifications to see if you qualify as an independent for aid purposes.
If I qualify as an independent, do I still need my parents’ financial information?
No. Independents only need to submit the financial information for their own households.
Who do I include in my household size?
If you file as independent:
- Your spouse (if applicable)
- Dependents who rely on you for more than half of their financial support
- Any children due to be born before the award year who will be a dependent
If you file as a dependent:
- Your parents
- Dependents who receive more than half of their parents (which could include yourself)
- Any children due to be born before the award year who will be a dependent of your parents
What if my parents are undocumented?
Your parents’ citizenship status does not affect your eligibility for federal student aid. If your parent does not have a Social Security number, enter all zeroes for on the FAFSA where it asks for that information.
What if I or my parents are in a same-sex marriage?
Same-sex couples must report their marital status as “married” if they were legally married in any state, regardless of where they live now or where the student’s desired school is. All marriage questions on the FAFSA use gender-neutral terminology and it does not matter which parent answers which set of questions.
What if my parents live together, but aren’t married?
If your parents aren’t married, but live together, you must provide information for both.
What is the difference between adjusted gross income and income tax?
Your adjusted gross income is the combination of everything you made in a year. Your income tax is the percentage of that number that is taxable. Most likely, you would not list the same number for both fields. The IRS DRT will help you fill in the correct information.
I’m not sure if I’m going to be living on campus. What should I list?
If you think that there’s a chance that you might live on campus, fill out the FAFSA as if you are. That guarantees that your school will calculate the highest cost of attendance for you as they curate your financial aid package. If you ultimately decide to commute instead, the financial aid office can always amend that package.
Will a high Estimated Family Contribution keep me from receiving aid?
The EFC is only one factor in determining your eligibility for aid. For example, if the cost of attendance for your school is considerably higher than your EFC, you could still qualify for some form of aid.
What if my status changes I’ve submitted my FAFSA?
Corrections are easy to make, whether they be for mistakes on the original application or for life changes since. If you filed your FAFSA online, simply log back in and click on the “Make FAFSA Corrections” option. Your new FAFSA will process in 3-5 days and you will receive an updated SAR. If you manually filed your FAFSA, your paper SRA has blank fields for corrections next to the pertinent questions. Just write in the new information and mail to the enclosed address. Your new FAFSA will process and you should receive a new SRA within 2 weeks.
If I miss the FAFSA deadline, will I still be eligible for aid?
Possibly, but not likely. For all programs (federal, state, and school) there are only a limited number of funds available. It is possible to file by the deadline and still not receive benefits because there are no more to distribute (which is more likely with state and school programs). If you do miss the 6/30 federal deadline for submitting your FAFSA, you may still be considered for some form of aid if there is any left after all funds for on-time filers have been awarded. But again, it is unlikely and not recommended. The earlier you can file, the better.
What if I applied to more than 10 schools?
The electronic FAFSA allows for a maximum of 10 schools for your Student Aid Report to be sent to. Prioritize your list based on any school deadlines or in-state requirements. Then after you receive your SAR, you can log back into your FAFSA to make corrections. You can change your school list to add the schools not previously listed. They will receive your “updated” SAR, which will not affect the schools who already have a copy of the previous one.