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What is FAFSA And How Does It Work?
5 MINS

What is FAFSA And How Does It Work?

Finance
5 MINS
|
Uploaded on
Feb 2, 2023
|
Last updated on
Mar 13, 2023
Uploaded on
Feb 2, 2023
|
Last updated on
Mar 13, 2023
FAFSA student aid
Need financial aid?

If you are looking for a way to get low-interest loans, grants or work-study programs, then don't look any further than FAFSA. It is completely fine to come up blank when you think about it is, as many don't know what it is! Don't worry because today we are going to explain everything about this student's financial aid, from what is FAFSA? The eligibility criteria, how to apply for one and everything you should know. Without wasting any more time, let's get right into it.

What is FAFSA?

Free Application for Federal Student Aid, or FAFSA, is the official form to apply for federal financial aid to pay for college. It is the application that almost over 13 million students apply for and gets more than $120 billion in grants, work-study, and low-interest loans from the U.S. Department of Education. The best thing about it is that you can apply for it for free! You also qualify for a $1,000 College Board Opportunity Scholarship just by submitting your FAFSA.

How does FAFSA work?

The main aim of FAFSA is to see how much financial aid you qualify for. It determines eligibility for federal need-based and non-need-based grants, including the Pell Grant, Federal Supplemental Educational Opportunity Grants, and many other federal student loans. To determine the amount of financial aid you will require, they ask a series of questions regarding the parents' and students' income and assets, as well as other criteria, such as the number of children in the family. When discussing assets,  they consider that 20% of a student's and 5.64% of the parent's assets should be spent in any college year. The above assets mostly contain bank accounts and investments besides retirement funds, annuities and insurance policies. After you give all the information you need to provide, it will be able to determine if you can get a need-based aid, a non-need-based aid, or a mixture of the two.

Why should you apply for FAFSA?

If you feel like this is all too much and don't want to apply for the FAFSA, there are a few reasons you need to look at why you should apply for it.

It is free and quick!

The FAFSA application has no cost; that is exactly what the first F stands for! You don't need to spend a single penny on filing for it, and any site or anyone who tells you otherwise is trying to get your money. With the application process being around 20 minutes, it is just a matter of minutes between you and the thousands of dollars for your college.

There is a lot of money on the line!

FAFSA is probably the most important thing you can do to get money for your college! It offers more than $150 billion in college grants, federal loans, work-study funds and more! If you, like your family, won't qualify for FAFSA, go for it; after all, the application is completely free, and according to a study by the National College Attainment Network, the batch of 2021 left out an estimated $3.7 billion in grants on the table as they never filed for FAFSA. Now that is a lot of damage! (don't think Flex Tape can fix this!)

It is essential for some colleges

Some private schools and colleges require FAFSA as an important document. Hence filing one out is important.

How to apply for FAFSA?

Applying for a FAFSA can be a bit tedious since it asks you a few questions that take time to answer, and you have to apply for it every year to continue your financial aid. The questions will range from basic identification to details about your parent's finances. Furthermore, students and parents must provide information about their income and assets, such as bank accounts, investments, real estate, and any enterprises they hold. Both parents and students have accounts and must fill out the application. You can fill out the application form online on their website. You can even mail an offline form to the Federal office of don't have access to a computer.

Eligibility Criteria

Eligibility Criteria for FAFSA

There are a few boxes you have to tick mark before you apply for FAFSA, and they are:

  1. Must be a citizen of the U.S. or an eligible noncitizen of the U.S.
  2. Must have a Social Security Number
  3. Good academic results
  4. Must have a high school diploma or a General Education Development (GED) certificate.
  5. Must not be in default on a federal student loan or owe a refund on a federal student grant.
  6. Must sign the FAFSA certification statement

What is the deadline?

For the 2023–24 award year, you can be considered for student financial aid if you fill out the form anytime between October 1, 2022, and June 30, 2024. You should send in any form corrections by September 14, 2024. One thing to keep in mind is that many colleges and schools have different deadlines for state and institutional aid; you can use the state deadline list to know more information.

Key points

Here are a few pointers to keep in mind to brief the entire blog.

  1. The Federal government uses FAFSA or Free Application for Federal Student Aid to check whether a family can qualify for grants, student loans and work-study programs for college.
  2. States, universities, and private scholarship programs also use information from the FAFSA to make financial aid decisions.
  3. The funding is on a first come and first served basis, with students who applied in June will be eligible for loans.
  4. Applications open in October of the prior year to enrollment and close in June of the academic year.

This was all you needed to know about FAFSA. If you need any help, you can always visit their website for more information! If you are looking to apply for any other scholarships but don't know how you can read our blog on how to get a scholarship in the U.S. If you are going for an M.D., then you must read our blog about M.D. in the U.S. as we provide you with all the information you will need.

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