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Understanding FAFSA and Unlocking More Financial Aid
What Does FAFSA Stand For?
FASFA is the acronym for Free Application for Federal Student Aid. This application is used to determine a student’s eligibility for federal financial assistance or aid programs. Federal Student Aid, a division of the US Department of Education, is in charge of administering the FASFA.
For students claimed as dependents on parent tax returns, parental financial information is required to complete the application, so parent(s) and students will need to work together through this process.
Important Things to Know About the FASFA
Regardless of your family’s financial situation, every individual applying to college or already in college should file the FAFSA. Only students who complete this form will be considered for need-based financial aid. The FAFSA is your starting point for federal grants, the federal work-study program and federal student loans.
Equally important, many schools will require completion of FAFSA in order to access their merit-based institutional aid. And currently, schools are the primary source of student aid dollars, accounting for nearly 50% of all aid, so completing FAFSA is key to getting more financial aid.
To obtain financial help for each school year, you must complete the FAFSA. You can find the FAFSA and submit it at www.fafsa.gov.
You must ensure that all of the information you supply is accurate. Incorrect information will jeopardize your financial aid eligibility.
Once you file your FAFSA, Federal Student Aid distributes your documentation to your future colleges (if you’re a new student) or your current college (if you’re an enrolled student.)
Qualifying for Financial Aid
The financial information provided in your FAFSA is used to determine your family’s Expected Family Contribution or EFC. According to FAFSA, “The Expected Family Contribution is a measure of your family’s financial strength and is calculated according to a formula established by law.” Said another way, your EFC is what the government estimates that your family can pay for one year of college.
From there, determining a family’s financial need is calculated as:
Cost of Attendance (-) Expected Family Contribution = Demonstrated Need.
Keep in mind, your demonstrated need is not necessarily the amount of aid you will be offered.
Since FAFSA is filed on an annual basis, your EFC will be recalculated each year as well.
(Expected Family Contribution will undergo a name change in 2023 to Student Aid Index or SAI, along with a few other changes to FAFSA.)
Types of Financial Aid
Financial aid comes in several forms, including grants and scholarships, work-study, and loans.
One of the most important distinctions to keep in mind as you maneuver through financial aid is understanding which aid is gift aid and which aid is loans or borrowed money.
Gift aid does not require any repayment and helps you lower your out-of-pocket college costs.
Loans require repayment and do not lower your college costs.Grants
The most well-known of all the federal grants include Federal Supplemental Educational Opportunity Grants, Pell Grants, TEACH Grants and the Iraq and Afghanistan Service Grants.
Work-Study
Part-time work for students enrolled in undergraduate, graduate, and professional studies are available. You’ll earn money to help cover part of your school expenses for a fixed number of hours each week.
Federal Student Loans
Loans are available through the federal government, for both students and parents. Federal student loans usually have more advantages than private loans received from banks or other private lending sources. (Private student loans are not part of the FAFSA process and have their own applications and requirements.)
When Is FAFSA Due?
The form is available starting October 1 of each year and you must submit it by June 30th. However, because awards are given on a first-come, first-serve basis, it’s important to complete and submit the application as soon as possible.
The FAFSA deadlines are for the following academic year, so you can start applying for the 2022-2023 college year on October 1, 2022.
Who Is Eligible for FAFSA?
Students enrolling at approved institutions (in the United States, Canada, or elsewhere) are eligible for federal student funding. You must also be a citizen of the United States or a qualifying noncitizen, as with a permanent resident.
How Much Financial Aid Can Students Receive?
Each student will receive a financial aid package based on a variety of factors, including the school’s cost of attendance, Expected Family Contribution, enrollment status (full-time, part-time) and the year in school.
Following the submission of the FAFSA, each institution to which the student provided the Federal School Code on their FASFA will establish a financial assistance package and send an acceptance letter outlining the types and amounts of aid that are available for the student.
How to File the FAFSA
To begin the process, you must first create a new FSA ID. This is your valid electronic signature, consisting of a login and password. This is a requirement to log into the Federal Student Aid online portal and complete the FAFSA application.
Make a note of your FSA ID as well. You will need it to log in and track your application throughout the application process.
Important Steps to Follow for a Smooth FASFA Application Process:
Gather Your Documents ahead of time
You’ll need basic information such as your name, address, and date of birth, as well as your financial information. You may need this additional information or documentation to complete the FAFSA, depending on your situation and dependency status:
- Social security number
- If you are not a US citizen, your alien registration number
- Your driver’s license number (optional)
- Your tax returns, including W-2s for parents and students*
- Account statements for your checking and savings account balances, and any investments you have**
- Records of your tax-free or untaxed income (example; workers compensation)
*You will use tax returns for the prior-prior year. So, if completing FAFSA in 2022, you will provide tax information from 2020.
**Use dollar values from most recent account statements
Create an FSA ID
If you’ve never submitted a FAFSA before, you’ll need an FSA ID, as well as a password and username if you’re filling out the form online. Students and parents need to have an FSA ID.
To create this ID, you’ll need to submit your social security number and full name. Once you obtain your FSDA ID, you will use it to submit a new FAFSA each year.
Complete Your Application
If this is your first time using the application, click “Start Here.” If you already filed the FAFSA for the previous school year, you must renew it by clicking “Login.” If you need to leave the application before finishing it, you can use the “save” option to keep what you’ve entered without having to file it.
See the Nitro College FAFSA Guide for an overview of all of the FAFSA questions. (An update to FAFSA in 2023 will significantly reduce the number of questions on the application!)
List One or More Schools
You have the option of sending your FAFSA information to at least one school, and up to ten schools in total. The sequence wherein you identify the schools does not matter if you are applying for federal student aid. However, some states need you to list them in a particular sequence in order to receive state funding. Check to determine if your state has any restrictions.
To get your FAFSA information sent off to schools, you’ll need to provide the school’s code, which you can usually search for in FAFSA or on the financial aid page of each school.
Sign and Hit Submit
When you’ve finished your application, sign your application with your FSA ID (if you’re doing a digital copy).
If choosing not to submit electronically, you can print the document, sign it, and mail it to the address on the signature page.
Monitor Your Application Status
After completing, submitting, and signing your FAFSA form, you’ll get an email confirming that your application was received successfully (if completing it online or through the app.)
The next step is to wait and check the status of your application to confirm that it is complete, and to make any necessary modifications or edits.
Before obtaining a formal financial aid letter, you will have access to a Student Aid Report (SAR). Depending on your manner of filing, you will receive this report within three days, or up to three weeks, following the filing of your application.
The Student Aid Report will include an overview of your financial data, your Expected Family Contribution, a four-digit Data Release Number (DRN), your anticipated federal student loan and Federal Pell Grant eligibility, and if you’ve been chosen for verification. If necessary, make adjustments or edits. If you notice that your SAR needs updating or corrections, make the necessary changes.
Accept Your Offer
You will receive a financial aid award letter directly from each school you apply to, usually in early spring.
The cost of attendance for one academic year, your Expected Family Contribution and the proposed amount of financial aid you will receive, should all be included in your award letter, as well as clearly identifying gift aid from loans.
However, award letters are not uniform in their layout or terminology, so you may need to spend extra time reviewing the letters as you try to compare schools and their aid offers.
And while loans have become pretty standard in financial aid packages, you do not have to accept them or accept them in full. If a school is too reliant on loans in their aid package, call the financial aid office to find out if there are other options.
Once you have accepted your financial aid package, your federal and state financial aid dollars will be sent directly to your institution, which will then utilize the funds to pay for tuition and other expenses. If there is money left over, it will be put into your account (if you chose direct deposit) or mailed to you in the form of a check.
Maintain Your Eligibility
After you’ve submitted your FAFSA and approved your financial package, you must maintain your eligibility for the years you want to attend college. Most schools will require that students maintain satisfactory academic progress to stay on course and graduate.
For additional information, contact your school’s financial aid office. You should also resubmit your FAFSA each year as close to the new enrollment date (October 1) as possible.
What Happens After You Submit the FAFSA?
Your Student Aid Report, or SAR, will arrive 3 to 5 days after you complete and submit the FAFSA electronically. This document outlines the information you provided on FAFSA. It also contains some basic details about your eligibility for financial aid.
It may take up to two weeks to get your SAR if you filed your FAFSA via regular mail. Also, colleges that you are applying to do not need you to submit the FAFSA or SAR to them. A copy of your SAR will be sent to each of the institutions mentioned on your FAFSA form.
What Does FAFSA Really Stand For?
Financial aid is an integral part of paying for college today. FAFSA is your access point to financial aid. The Free Application for Federal Student Aid opens the door to federal and state aid dollars, as well as to the institutional scholarships and merit awards for many of the schools you apply to. Completing FAFSA for every year of college can help you cover more of your college costs.
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