What is FAFSA and how does it work? (2023)

If you need help paying for college, it all starts with the Free Application for Federal Student Aid, akaFAFSA. College and university financial aid offices, from community colleges to Ivy League institutions, use the FAFSA to determine eligibility for financial aid, including student loans, grants, scholarships, and federal work-study programs. A completed FAFSA forms the basis of a student's Financial Aid Package and is used to determine expected family contribution and need-based support at a particular school.

Even if you think you're making too much money for financial assistance, you should still take the time to complete the FAFSA. Only according to a Discover Loans survey45 percent of parents completed the FAFSA— although 74 percent of the same group worried about having enough money to help their students pay for college.

Don't assume that you don't qualify when it comes to federal financial aid and the availability of school financial aid. Start with the FAFSA (and, if your future school requires it, thePerfil-CSS) and see what financial assistance packages are being offered to you.

"You have nothing to lose by applying, just fill out the forms," ​​he saysDavid Sheridan of Columbia University. "There's a very real possibility that if you [think] you don't qualify for anything, so don't bother applying, you may be missing out on something that you could have received."

Need more reasons to complete it? Read this.

Where can I get a FAFSA form?

You can find the FAFSA atfafsa.ed.gov. The form must be completed online at the official FAFSA website maintained by the US Department of Education and is always free to complete and submit. If you find yourself on a copycat website or a website that offers help completing and filing the FAFSA for a fee, stay away!

Need help filling it out? There are lots of (free) guides and information on Edmit and the FAFSA website.

(Video) What is the FAFSA and How Does it Work

Who should use the FAFSA

Even if you think you're making too much money for financial assistance, you should still file the FAFSA. Don't assume that you don't qualify when it comes to federal financial aid and the availability of school financial aid.

The FAFSA considers many factors in determining a student's financial needs, more than just income and wealth. Even if your family income is $250,000 and you are worth over $1 million, apply anyway! maybe you still areEligibility for Financial Assistance. As long as you stick to itbasic admission requirements(High school diploma or equivalent, satisfactory academic progress, etc.) you must apply for federal financial aid from the FAFSA.

Note thatPhD studentsare also eligible for the FAFSA, although Edmit focuses solely on college student enrollment.

What documents do I need to file the FAFSA?

FAFSA collects personal and financial information fromdependent studentsand their parents, who forward this information to the schools to which the student has applied.

Step One: Register for aFSA-IDon the website of the Federal Student Union. This ID allows you to apply for federal grants, serves as a legal signature, and facilitates later additions or changes to your application. Parents and students must each apply for their own FSA ID card.learn more here.

You will also need the federal school regulations for each school you wish to apply to. Use theFederal School Code Lookup-Toolto find the code of any school.

Once all required FSA IDs have been generated and federal school codes found, have the following information ready to complete the FAFSA smoothly:

Personal information

  • Student social security number
  • Parents' social security numbers if you are a dependent student
  • Student driving license number, if applicable
  • Foreign Student Registration Number if you are not a US citizen

financial information

  • Federal tax information (via W2 information or tax returns) for the student, the student's spouse, and the student's parents, if applicable
  • Tax-free proof of income, such asPayments from the pension scheme
  • Other financial investments such as savings accounts or investments

For more details on the documents required to complete the FAFSA, go toVisit the FAFSA website.

(Video) FAFSA Scholarship: Who It's For, How To Apply & More

Completing the FAFSA

Once you have gathered the required information, you can begin completing the FAFSA. Go to the FAFSA website and sign in with your FSA ID before beginning the application.

You first enter the student's personal information, such as: For example, social security number and citizenship status before you are asked a series of questions to determine the student's dependency status (most students are listed as dependent).

The next section requests information about the parents. They provide personal information as well as financial information such as income, assets, and tax forms. For FAFSA Form 2020-21, enter information from the 2018 tax year. You can even use the included IRS data retrieval tool, which can automatically import past tax returns into the form.

The FAFSA should guide you through any questions you may have about who counts as a parent and how divorce, stepparents and other situations should be filed. You can also get answers to theFederal website for student aid.

Finally, you must provide financial information about the student (and the student's spouse, if applicable). Many young people will not have much to report, especially as the FAFSA looks back on essentially two years of tax records. However, it is important that you take your time in this section and provide all the information requested.

You will also be asked to list any schools you wish to apply to. You must provide at least one and you can include up to 10 in the online application. In some states, the order in which you list schools matters if you're hoping to be considered for state aid. let's see which onesclaims this applies here.

While this all sounds like a lot of work, you don't have to do it all at once. Spend some time gathering all your forms first, then sit back and launch the app. And if you can't finish everything at once, you can save your progress and come back later.

When should I complete the FAFSA?

Prepare your calendar reminders! It is extremely important that you submit your FAFSA form before the financial assistance deadline.

Although the federal deadline for filing your FAFSA is midnight CST on June 30 each year, state and college deadlines have their own requirements and limits for grant consideration. For state deadlines, seeFederal Student Aid Deadlines Site, but you'll need to check with your tax office for specific college deadlines.

Regardless of the deadlines, however, it is best to file the FAFSA as soon as possible after it has been cleared for filing on October 1 of each year. When it comes to filing with the FAFSA,Early applicants can get more moneyaccording to a 2015 Edvisors survey. The survey found that students who applied within the first three months received twice as much financial aid at their admitted schools as students who waited. If your financial circumstances change between filing the FAFSA and enrolling in school, contact your financial aid office to update your financial aid package.

For each academic year, the US Department of Education allows students to submit FAFSA forms between October of the previous academic year and June of the current academic year, with the federal FAFSA deadline ending in the same June. For example, the FAFSA for the 2020-21 academic year became available on October 1, 2019, with a federal deadline of midnight CST on June 30, 2020.

The information you have provided is from what is known as a "previous year" so when the report is completed in October you will have access to a full year of financial information. This means that for a student transitioning from high school to college, the fiscal year beginning in January of their sophomore year and ending in December of their junior year is the first fiscal year that "counts" for financial aid.

(Video) how to fill out the FAFSA and maximize aid (step-by-step guide)

Learn more about FAFSA deadlines.

How is the subsidy calculated?

It is important to fill out the FAFSA accurately and thoroughly. The data collected in this funding application will help determine the needs-based funding to which you are entitled.

There are four factors that determine this help.

  • your school year
  • Your enrollment status (e.g. full-time or part-time)
  • Cost of Participation (COA)
  • Expected Family Contribution (EFC)

Isparticipation costs(COA) is how much it will cost you to go to a specific college during a school year. These include tuition,Accommodation and catering, books, consumables and other related expenses. Your COA varies from school to school.

Your Expected Family Contribution (EFC) is calculated using the information you provide in the FAFSA. This is the amount of money that the government believes your family could reasonably pay for an academic year.

Your EFC deducted from a school's COA reflects the student's financial need. So if a school's COA is $15,000 and EFC is $10,000, its financial need is $5,000 and it may be eligible for aid to cover that amount.

Financial need is the amount that the student will need in financial assistance to meet the costs of a particular school, according to the FAFSA. This number varies from university to university as the cost of participation is different at each institution. Based on this information, their schoolsDetermine individually how much help you offer.

More about EFC

The EFC is calculated based on your family's income and net worth.

total revenueincludes student and parent income. If the parents are divorced or separated, or you are a student without custodial parents,learn more here.

net worthinclude investments, businesses, or savings accounts. Be sure to check them outrated and unrated assetsbefore filling out the form. Do not accidentally add non-essential assets to the application or you may receive less aid than you would otherwise be entitled to.

Here's an in-depth look at what assets are counted at the FAFSA.

The EFC calculation also takes into account the size of your family and the number of family members already enrolled in school. In general, EFC will be lower for low-income students with little wealth and higher for a high-net-income, wealthy family.

worried that you willhave a high EFC? what if youEFC is higher than you can afford?

(Video) COLLEGE FINANCIAL AID (negotiation, college grants, scholarships, fafsa)

What types of assistance does FAFSA offer?

A completed FAFSA forms the basis of a student's Financial Aid Package and is used to determine expected family contribution and financial aid needs at a particular school. Various types of aid are available to students through the FAFSA process, including federal student loans, federal scholarships, grants, and federal work-study programs.

federal grants

There are manyScholarships for students. This is free money, which means you don't have to pay it back. Grants are generally need-based and depend entirely on the results of your FAFSA.


You may be offered scholarships by your school. This is also free money that does not have to be paid back. Often this money is merit-based, meaning you earned it for excellent grades, athletic performance, or other accomplishments. This money will also likely come with strings attached, so you may need to maintain satisfactory academic progress or certain grades in order to continue receiving the financial award. There are many opportunitiesaccess scholarship money.

Study and work programs

Part of your financial aid package may includeStudy and work opportunities. This is the money you have to pay if you have a part-time job on campus. If you are eligible for a dual degree, your school must reserve a spot for you. Contact your financial aid or employment office for more information on their procedures.

Federal student loans

There are manyLoans offered by the federal government(e.g. subsidized and unsubsidized loans), all of which you have to pay back with interest. Here it ishow to apply.

when the time comesaccept your help, do so in the order shown in this section: free money from grants or scholarships, money earned, and then money borrowed. If you don't need to rent, don't.

Your aid package again comes directly through your schools. If you see problems with the aid that is being offered to you, contact your aid office immediately. This also applies if you feel that you have not received enough money to cover the cost of participation. For example you canObjecting to your financial aid package.

How long will it take to get the money from the FAFSA?

You submitted and received your completed FAFSA form well in advance of the deadlinesStudent Aid report(SAR) confirms that all your information has been received. After submitting the FAFSA, you informed the colleges you applied to that you would like to be considered for financial aid and completed additional school-specific requirements and applications.

most schoolsSending scholarship letters to studentsalong with or shortly after your college acceptance letter, so there may be a few months between submitting and receiving your aid letter. Once you receive the letter of support, you must do itAccept or decline the help offeredbefore the end of the funding period.

(Video) Use FAFSA To Pay For College?

do you need any more information?

Keep in mind that the FAFSA must be submitted prior to any year a student wishes to enroll in college. If you have questions about the FAFSA process, read themFAFSA-Website, speak to a grant administrator, orlog in to edit. Much luck!


1. 3 big FAFSA mistakes that will cost you a lot of money!
(The FAFSA Guru)
2. COLLEGE STUDENT LOANS EXPLAINED | fafsa loans vs private students loans
(The Almost Astrophysicist)
3. Overview of the Financial Aid Process
(Federal Student Aid)
4. After the FAFSA: What Happens Next
(Federal Student Aid)
5. What is the FAFSA and how does it work
(OnCampus College Planning)
6. Understanding Your College Financial Aid Award Letter - Fafsa Grants, State Grants and Scholarships
(Ed Zamora College Prep Channel)


Top Articles
Latest Posts
Article information

Author: Twana Towne Ret

Last Updated: 10/29/2023

Views: 6104

Rating: 4.3 / 5 (44 voted)

Reviews: 91% of readers found this page helpful

Author information

Name: Twana Towne Ret

Birthday: 1994-03-19

Address: Apt. 990 97439 Corwin Motorway, Port Eliseoburgh, NM 99144-2618

Phone: +5958753152963

Job: National Specialist

Hobby: Kayaking, Photography, Skydiving, Embroidery, Leather crafting, Orienteering, Cooking

Introduction: My name is Twana Towne Ret, I am a famous, talented, joyous, perfect, powerful, inquisitive, lovely person who loves writing and wants to share my knowledge and understanding with you.