What is FAFSA? What is Financial Aid? – Napkin Finance

FAFSA

Aid and Abet

FAFSA
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FAFSA

The Free Application for Federal Student Aid, or FAFSA, is a form that college and grad students fill out annually as part of the financial aid process.

Why important

More than $120 billion in federal aid is awarded each year. Many states and schools also use your FAFSA information in awarding their own aid, such as school-specific scholarships.

That’s why you should always take the time to fill out your FAFSA every year (even if you don’t expect you’ll qualify for need-based aid).

How it works

Here’s what the FAFSA process and timeline typically look like:

Step 1
Apply for a Federal Student Aid ID and password

Step 2
Gather all the documents you’ll need;
wait until filing opens
(October 1 of the year before the relevant school year)

Step 3
Fill out the form at the official FAFSA website,
studentaid.ed.gov

Step 4
After you’ve completed the form, review your Student Aid Report
and your “Expected Family Contribution”
(that’s the amount that your family is considered able to pay)

Step 5
Your school (or schools, if you’re applying)
receives your financial information through the FAFSA

Step 6
Your school or schools send out their financial aid letters,
often in March or April

What you need

To fill out the form, you typically need:

  • Your Social Security number
  • Your most recent tax returns (or your parents’ returns)
  • Any bank or brokerage statements
  • Records for any other types of income
How used

The school you’re headed to (or those you’ve applied to) use the information on your FAFSA to determine your financial need. They do this by subtracting your Expected Family Contribution from the cost of attendance. A lot of factors influence those two important numbers:

  • Cost of attendance—This is what it will cost you to go to school each year and can include:
    • Tuition
    • Room and board
    • Books
    • Any extra fees
    • Supplies and miscellaneous expenses
  • Expected Family Contribution—What (in theory) your family can afford to contribute each year to your education. It’s influenced by:
    • Your family’s income (including any jobs you have)
    • Your family’s assets
    • Any government benefits your family receives
    • Family size
    • Whether you have other family members in college

Keep in mind that the Expected Family Contribution is not your final bill. It’s the number that schools use to help figure out how much need-based aid you’re eligible for.

Tips

Ready to start? Here are some things to keep in mind:

  • Give yourself some time—It’ll take around an hour to fill out the FAFSA.
  • Be precise—The best way to avoid delays is to fill out the form right the first time.
  • Fill it out even if you think you won’t qualify—FAFSA can help you access non-need-based aid too.
  • Fill it out early—Some schools give out aid on a rolling basis. You can even fill it out before your acceptance letter arrives.
  • Fill it out each year—Unfortunately, FAFSA isn’t one and done; you need to fill it out for each year you’re in school.

“It’s one thing to make financial aid available to students so they can attend college.  It’s another thing to design forms that students can actually fill out.“

—Cass Sunstein

Conclusion

The Free Application for Federal Student Aid (FAFSA) is the form you fill out to get federal financial aid to pay for college. Some schools and states also use the FAFSA to determine eligibility for grants, scholarships, and other need-based and non-need-based aid. You need to fill out the FAFSA each year you’re enrolled in college or grad school.

Fun facts
  • One common FAFSA mistake is parents accidentally entering their own information instead of their kids’.
  • It’s called the “Free” application for aid because it’s free, but some copycat private websites may still try to get you to file with them for a fee. (Hint: You never have to enter credit card information to fill out the real FAFSA.)
Key takeaways
  • FAFSA is a form you fill out to access financial aid for college and grad school.
  • It requires reporting your income (and your family’s, if needed), assets, other finances, and personal information.
  • Filling out the FAFSA on time can help you qualify for several types of aid, including need-based and merit-based aid, and federal, state, and school-specific aid.
FAFSA be like “We see your parents got extra guacamole at lunch . . . you must not need any aid.” — Napkin Finance

References

https://fafsa.ed.gov/help/costatt.htm
https://studentaid.gov/complete-aid-process/how-calculated#efc
https://studentfinance.northeastern.edu/cfi/fafsa-tips/
https://bigfuture.collegeboard.org/pay-for-college/financial-aid-101/how-to-complete-the-fafsa
https://blog.turbotax.intuit.com/tax-planning-2/fafsa-101-your-guide-to-financial-aid-19196/
https://www.northwesternmutual.com/life-and-money/fafsa-101-everything-you-need-to-know-about-filling-out-the-fafsa/
https://bigfuture.collegeboard.org/pay-for-college/paying-your-share/the-expected-family-contribution-efc-faqs
https://fafsa.ed.gov/help/fotwfaq59.htm
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