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If you’re in high school, college, grad school, or even if you’ve done a simple cursory exploration of different ways to fund your higher education, you’re familiar with the Free Application for Federal Student Aid—otherwise known as the FAFSA.
“Why apply for the FAFSA?” You may ask, “Doesn’t it just tell you how much money your parents can supposedly afford to pay for school?” Well, yes and no.
Not only does the form calculate the rough amount you are theoretically able to shell out for college (this number is called the Expected Family Contribution, or EFC), it also indicates whether you’re eligible for federal work-study and what federal loans you may be able to take advantage of.
Keep in mind that there is no age limit for receiving aid, and you can utilize these programs whether you’re an undergrad or working towards a graduate degree!
Federal work-study
Federal work-study is a program where eligible students (generally those whose FAFSAs indicate that they have need for financial aid) may get part-time employment through their school.
These jobs can be on- or off-campus and will pay at least the federal minimum wage, sometimes even more.
Qualifying students are generally responsible for finding a position and they are paid directly by their schools, though they can request that the money they earn be deposited into a bank account or used for tuition or room and board.
It’s important to remember that the number of hours you work cannot exceed the amount you have been granted and that students taking advantage of the work-study program are not allowed to work during their university’s finals week.
Federal loans
There are also several federal loan programs that you can take advantage of. Even if you don’t qualify for work-study, you might still be eligible for one of these loans—the Federal Perkins Loan and the Stafford Loan are the two that are most frequently used by students.
These loans may have lower interest rates than those you can acquire through private institutions, so it’s a good idea to explore all your options before signing on to a commitment.
The Perkins Loan is your basic need-based loan. Kind of like with work-study, the amount that you are eligible to borrow each year corresponds with the level of need that you have according to the FAFSA.
The Stafford Loan is not a need-based program; you can take out one of these loans even if your FAFSA indicates that you technically don’t need the aid. However, the level of need you have impacts whether you’re required to pay back interest that accumulated while you were in school; check out the links below to find more information!
The Pell Grant is another need-based program—it’s not a loan, of course, so you don’t have to pay it back. The amount of these awards varies based on individual need and the maximum amount available per student changes from year to year. Generally, the max Pell amount you can gain per year is around $5,500.
Filling out the form
Now that you know what kinds of assistance the FAFSA can gain for you, you’re ready to settle down and get it done. Set aside a good amount of time to fill out the FAFSA, about a couple of hours.
If you’re considered a dependent on your parents’ tax forms, you’ll want them to be available too to answer any questions that you might have about their finances.
Head to obtain a Federal Student Aid PIN, and then to set up your account!
It’ll be helpful to have the information you’ll need right there. You’ll need your social security number and information that indicates the amount of money you and your parents have earned: income tax returns, W-2s, bank statements and records of untaxed income you’ve earned. If you or your parents have any records of investments, you’ll need those as well.
You might have heard that you only need to submit the FAFSA once, but that’s untrue! It’s guaranteed that some of the information on the form will change at least slightly from year to year, which may make you eligible for a greater financial aid package, so you need to complete it annually.
Recommended Reading
• The Beginner’s Guide to Financial Aid
• Maximizing Aid Eligibility: What You Need to Know
• Making Smart Student Loan Decisions
Additional Web Resources
FinAid.org is another great web resource with a wealth of knowledge. There you can find many of the answers to any of the financial aid questions you may have, along with questions regarding tax benefits, applications, loans, savings and grants.
The Federal Student Aid website is where you file your FAFSA and is a basic starting point for federal student aid-related questions.
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