What Is FAFSA?

Paying for college is an incredibly expensive endeavor with the average cost of a college education costing $35,676 for a private institution and state colleges costing and average of $21,629 for out of state students. That’s just for one year! Finishing college will cost the average student over $100,000 just to earn a bachelors degree. Unless you were blessed with rich parents or receive a full academic or athletic scholarship, you will likely need financial assistance to complete your collegiate studies. In order to ensure that you will be able to pay for your higher education studies, you need to become familiar with FAFSA. This article will start by answering the question, What is FAFSA?This post will help you gain a better understanding of FAFSA and walk you through the steps needed to complete the FAFSA application.

What is FAFSA?

FAFSA stands for the Free Application for Student Aid which is the official form you use to request financial assistance from colleges, state, and the federal government. The purpose of FAFSA is to calculate how much need-based financial aid you qualify for, and then how much non-need based aid you can get. To apply for FAFSA, you have to go to www.fafsa.gov and fill out the form. Colleges and universities use your application to determine eligibility for federal, state, and college-sponsored financial aid, including grants, educational loans, work-study programs, and all forms of financial assistance. Even though the FAFSA is for the purpose of acquiring federal aid, you have to fill it out to receive state and college-sponsored financial aid as well.

FAFSA is used by both undergraduate and graduate students seeking to attend college to apply for financial aid. Although FAFSA is used to apply for financial assistance at both the federal and state levels, most of the funding provided is at the federal level. FAFSA is an acceptable form of educational financing by most colleges, universities, career schools, and trade schools. FAFSA money can be used to cover all educational expenses such as tuition, textbooks, room and board, school supplies, laptops, and course costs.

In order to qualify for both loans and grants, you have to fill out the Free Application for Federal Student Aid (FAFSA). 

Pell Grants

FAFSA applicants can apply for free money in the form of Pell Grants which do not need to be repaid. Pell Grants are available to undergraduate students for a maximum of 12 semesters. The maximum Pell Grant award for 2019-2020 is $6,195.

Loan Limits

The largest portion of assistance for educational costs comes in the form of Direct Subsidized Loans and Direct Unsubsidized Loans. These loans are also known as Stafford Loans. Subsidized loans are need based and do not require the repayment of interest during schooling. The interest is paid by the federal government while the student is in school. Unsubsidized loans are not need based and accrue interest during the schooling of the student which must be repaid after graduation or once school enrollment has completed.

Subsidized and Unsubsidized Loan Limits

(Independent students are classified as those who meet one of the following classifications: 24 or older, married, emancipated minor, in the military, grad student, claims other dependents, homeless). Students whose parents are unable to obtain Direct Plus Loans may be eligible for additional unsubsidized loan funds.

Read How Do Student Loans Work to learn more about the different types of loans available to finance your college education.

Filling Out The FAFSA

Start by creating a profile on the FAFSA website. You need to create a FSA ID by creating a username and password. Then enter the following information to begin:

• Student’s first name
• Student’s full last name
• Social Security Number
• Date of Birth

The FAFSA form consists of 7 sections.

Section 1: Student Demographics

Section 1 will take some time to complete. You will need to enter the following information about the student applying for aid:

• Your Last Name, 
• First Name
• Middle Initial
• Date Of Birth
• Your City (And Country If Not U.S.)
• Your State
• Your Zip Code
• Email Address

Answer the following questions in Section 1.

• Have you lived in your state at least 5 years?
• Are you male or female?
• Telephone Number
• Drivers license number (If you have one)
• Drivers License State
• What is your marital status as of today?
• Are you a US Citizen?
• What will your High School Completion status be when you begin college in 2019-2020
• What will your college grade level be when you begin the 2019-2020 school year?
• What degree or certificate will you be working on when you begin the 2019-2020 school year?
• Will you have your 1^st bachelor’s degree before the 2019-2020 school year?
• Are you interested in being considered for work-study?
• Are you a foster youth or were you at any time in the foster care system?
• What is the Highest school completed by Parent 1?
• What is the highest school completed by Parent 2?

Section 2: School Selection

Section 2 is incredibly brief. You will need to information about the schools being applied to:

• What is the name of your high school?
• In what city is your high school located?
• In what state is your high school located?
• Do you know the college’s federal code? 
• State of college attending
• You can add up to 10 schools to FAFSA form application.
• Select schools by search box
• School name
• Federal Code
• Select the Housing Plan (On Campus, With Parent, Off Campus)

Section 3: Dependency Status

Sections 3 and 4 determine your eligibility as a dependent or independent student. You will answer the following questions:

• Do you now have or will you have children who will receive more than half their support from you between July 1, 2019 and June 30, 2020?
• Do you have dependents (other than your children or spouse) who live with you and who will receive more than half of their support from you, now and through June 30, 2020?
• Household Size (You, Your Spouse (based on Marital Status, Your number of family members in 2019-2020 (household size)

If your answer is just you, you will be classified as an independent student and can skip the next section. Independent students have the option of answering questions about their parents.

Dependent students have to fill out parental demographic information. You should also fill out the next section if your college requests it. Medical and law school students are advised to fill out the next section as well.

Section 4: Parent Demographics

Section 4 has you to answer the following questions:

• As of today, what is the marital status of your parents?
• Parents marital status
• Social Security Number
• Last name
• First initial
• Date of birth
• Parents email address
• Lived in same state 5 years
• Household size (Your parents, yourself even if you do not live with parents)
• Parents other children even if they do not live with parents if:
• Parents will continue to provide more than half their support through July 1, 2019 to June 30, 2020.
• These children can answer no to every dependency status question on the FAFSA
• Other people if:
• They live with your parents
• if your parents provide more than half their support.
• Parents will continue to provide more than half their support through July 1, 2019 to June 30, 2020.
• Number of people in household in college
• How many people in parents household will be college students between July 1, 2019 and June 30, 2020?

Section 5: Financial Information

Section 5 will take some time to complete because you need your financial information and possibly your parents. You can save some time by using the IRS Data Retrieval Took and transferring your returns directly into the FAFSA form. FAFSA will present you with this option. That’s the simplest way to upload you and your parents financial information. It will also save you from filling out every single question below. If you prefer to fill it out manually, then you need to answer the following questions:

• For 2018, have your parents completed their IRS tax return or another tax return?
• For 2018, what is your parents’ tax filing status according to their tax return?
• Parents’ Type of Tax Form Used,
• Parents’ Tax Return Filing Status 
• Parents’  Adjusted Gross Income 
• Parent 1 (Father’s/Mother’s/Stepparent’s)  Income Earned from Work 
• Parent 2 (Father’s/Mother’s/Stepparent’s) Income Earned from Work 
• Is Parent a Dislocated Worker? 
• Parents Received Medicaid?
• Parents Received Supplemental Security Income? 
• Parents Received SNAP? 
• Parents Received Free/Reduced Price Lunch? 
• Parents Received TANF? 
• Parents Received WIC? 
• Parents Eligible to File a 1040A or 1040EZ? 
• Parent Financial Information 
• Parents’ U.S. Income Tax Paid 
• Parents’ Exemptions Claimed 
• Parents’ Education Credits 
• Parents’ Child Support Paid 
• Parents’ Taxable Earnings from Need-Based Employment Programs 
• Parents’ College Grant and Scholarship Aid Reported to IRS as Income 
• Parents’ Taxable Combat Pay Reported in AGI 
• Parents’ Cooperative Education Earnings 
• Parents’ Payments to Tax-Deferred Pensions & Retirement Savings
• Parents’ Deductible Payments to IRA/Keogh/Other 
• Parents’ Child Support Received
• Parents’ Tax Exempt Interest Income
• Parents’ Untaxed Portions of IRA Distributions 
• Parents’ Untaxed Portions of Pensions 
• Parents’ Housing, Food, & Living Allowances 
• Parents’ Veterans Noneducation Benefits 
• Parents’ Other Untaxed Income or Benefits 
• Parents’ Total of Cash, Savings, and Checking Accounts 
• Parents’ Net Worth of Current Investments 
• Parents’ Net Worth of Businesses/Investment Farms 
• Student Financial Information
• Student Filed Income Tax Return? 
• Student’s Type of Tax Form Used
• Student’s Tax Return Filing Status 
• Student’s Adjusted Gross Income
• Student’s Income Earned from Work 
• Spouse’s Income Earned from Work 
• Is Student or Spouse a Dislocated Worker? 
• Student Received Medicaid? 
• Student Received Supplemental Security Income? 
• Student Received SNAP? 
• Student Received Free/Reduced Price Lunch? 
• Student Received TANF? 
• Student Received WIC? 
• Student Eligible to File a 1040A or 1040EZ? 
• Student Financial Information (continued)
• Student’s U.S. Income Tax Paid 
• Student’s Exemptions Claimed 
• Student’s Education Credits 
• Student’s Child Support Paid 
• Student’s Taxable Earnings from Need-Based Employment Programs 
• Student’s College Grant and Scholarship Aid Reported to IRS as Income 
• Student’s Taxable Combat Pay Reported in AGI 
• Student’s Cooperative Education Earnings 
• Student’s Payments to Tax-Deferred Pensions & Retirement Savings 
• Student’s Deductible Payments to IRA/Keogh/Other 
• Student’s Child Support Received 
• Student’s Tax Exempt Interest Income 
• Student’s Untaxed Portions of IRA Distributions 
• Student’s Untaxed Portions of Pensions 
• Student’s Housing, Food, & Living Allowances 
• Student’s Veterans Noneducation Benefits 
• Student’s Other Untaxed Income or Benefits 
• Money Received or Paid on Student’s Behalf 
• Skip Student’s Asset Questions?
• Student’s Total of Cash, Savings, and Checking Accounts 
• Student’s Net Worth of Current Investments 
• Student’s Net Worth of Businesses/Investment Farms 

Section 6: Sign & Submit

Section 6 is a breeze since it has just one question.

Are you a preparer? Most people will click no.

That’s it. You’re almost Done!

Just sign the FAFSA application electronically.

Section 7: Confirmation

You’re done! You will receive a confirmation via email.

FAFSA FAQ

How long does it take to complete a FAFSA application?

Completion of a FAFSA application takes about one hour. I completely filled out a FAFSA to see how long the process takes. An hour is just about right.

What documents do I need to complete a FAFSA form?

• Your Social Security Number
• Your Alien Registration Number (if not a U.S. citizen)
• Federal Income Tax Records
• W-2’s, 1099’s, Any Records Of Income Earned
• Bank Statements
• Investment Statements

Dependent students will need the aforementioned information from their parents. Application deadlines differ at the federal and state levels.

When is the FAFSA federal deadline?

FAFSA forms completed online must be completely submitted by June 30, 2020 at midnight Central Standard Time (CST). Submission by this date makes the applicant eligible to receive federal loans, grants, scholarships, work-study, and other types of financial assistance.

When should I file my FAFSA application for federal assistance?

The open period for FAFSA applications begins October 1^stof each year. It is best to submit your FAFSA application as close to October 1^stas possible. Financial awards are based on a first come, first served basis. Get your form in as early as possible so you can receive the maximum amount of assistance.

When is the state FAFSA deadline?

FAFSA deadlines for state financial aid vary by state. You can find a listing of state financial aid deadlines here.

How does FAFSA calculate need?

FAFSA computes Expected Family Contribution or EFC for college, which is a dollar amount that reflects how much you can afford to pay for college for the upcoming academic year. The lower the EFC, the more aid you are eligible to receive. EFC is determined based on income, assets, and other household information you are asked to provide on the FAFSA form. Cost of Attendance or COA is also an integral factor – it includes tuition and fees, room and board, books, supplies, transportation, loan fees, and other school expenses. Child and dependent care costs are considered, too, as are costs related to a disability or eligible study-abroad programs. After subtracting EFC from COA, FAFSA shows exactly how much financial aid you qualify for.

What happens after I complete my FAFSA application?

Right after filing FAFSA, you receive a Student Aid Report (SAR) in 3-5 days in your email.Your SAR will have a summary of the information you submitted on your FAFSA along with your EFC. Remember that your EFC does not determine the amount of aid you will receive from colleges; it determines the amount of aid you are eligible to receive.

Colleges listed on your FAFSA has access to your information one day after it is processed, so they use the data from FAFSA to calculate the financial aid you can be offered. You receive financial aid award letters from colleges after getting acceptance letters. However, if you apply for an early decision or early action, you may have to wait until those who applied for regular decision receive their acceptance notices to get your financial aid award letter.

Who can fill out a FAFSA form?

FAFSA forms can be filled out by:

• the student attending college.
• the parent of the student.
• a preparer.
• a student from the Freely Associated States. (The Freely associated States are citizens of the Freely Associated States of Micronesia, the Republic of the Marshall Islands, or Palau).

Are other types of grants available?

Yes, FAFSA offers Federal Supplemental Educational Opportunity Grants for students with extreme financial needs. Grants are also available for those seeking to become public school teachers and the relatives of fallen military veterans.

Where do I go to complete a FAFSA application?

You can go the Federal Government’s FAFSA application by clicking this link.

I hope that this answers all of your FAFSA questions!