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Going to college is an exciting time in anyone’s life, but it also represents a huge financial commitment. The average cost of college in the US was $20,770 for in-state public universities, $40,940 for out-of-state public universities, and $46,950 for private universities each year.
Of course, most people don’t just have that type of money lying around. That’s where financial aid comes in. FAFSA is one of the leading sources of financial aid for college students.
If you find yourself asking “what is the FAFSA,” keep reading for a complete overview!
What is the FAFSA?
FAFSA stands for Free Application for Federal Student Aid. This program is a federal government program that provides funding to college students. It provides an opportunity for several different types of funding to students, including grants, work-study placements, and low-interest direct loans.
You will need to submit a new FAFSA for every academic year to provide updated information with your income, household size, and other pertinent data that will help determine your eligibility for aid. This means that the type and amount of aid that you receive may change with each award year, as your financial situation and program funding change.
Who is Eligible for FAFSA Aid?
The FAFSA can be completed by anyone who seeks financial aid resources; however, eligibility is determined by many factors. It is important to fill out the form so you can explore options for yourself. Filling out the application is free, and you are not required to take any of the financial aid that you are awarded. It may be a good idea to fill out the FAFSA because you may qualify for aid that will help you with your educational costs such as tuition, books, and fees.
The basic requirements to be eligible for FAFSA aid are as follows (there are other requirements that may come up based on the data you entered on your application):
- You must have a high school diploma or have received your GED, or enroll under an approved Ability to Benefit (ATB) program.
- You must be enrolled in a degree or certificate program, or be accepted to start in the next school year.
- You have to be registered with Selective Service for the draft if you are male.
- You must also have a valid SSN.
- Only US citizens, a US nationals, or a US permanent residents. Some non-residents and non-citizens are eligible, including refugees or hold a T-Visa (for victims of human trafficking)
What Type of Aid Can I Receive?
The FAFSA only refers to the application, which will apply you to several different programs. Programs can be divided into grants, work-study, and low-interest loans. Although there are other financial aid programs, we will introduce some of the most common grant and loan programs below.
There are four main types of grants that you can get by submitting your FAFSA. Each is designed to meet the needs of a certain need-based student.
Pell Grants are offered to low-income students who do not already hold a degree. The amount you will receive will vary depending on factors such as the amount of money your family makes and will contribute, the cost of your program, and whether you are a full or part-time student.
For 2019-2020, the maximum you can receive is $6,195. That number can change each year.
Iraq and Afghanistan Service Grants
These grants are for the children of parents or guardians who died serving in the military in Iraq or Afghanistan. Eligibility is determined by making too much money to qualify for a Pell Grant, but meeting the other requirements. Furthermore, you must have been 24 years or younger when your parent or guardian died. The maximum amount you can receive is the same as a Pell Grant.
Federal Supplemental Educational Opportunity Grant
FSEOG funding varies from school to school. These grants are awarded by the school, based on need, and the institution has a limited amount of available funds. Many schools usually offer FSEOG funding to students with the most need (ie: Those students who are eligible for the PELL grant). Talk to your financial aid office to see if you’re eligible, and how much they are able to award to you.
There are three main types of loans that you can receive through FAFSA. While you may not qualify for the best terms, you may still be eligible to be awarded this funding.
Direct Subsidized Loans
Available to undergraduate students, these loans give you better repayment terms than private loans. How much you are eligible for will depend on your income, your year of study, and whether your parents are contributing to your education, and the amount cannot exceed the cost of attendance minus other aid awarded. You will pay no interest on your loans so long as you are in school at least half-time, and for six months after your last date of attendance, considered your grace period.
Direct Unsubsidized Loans
These loans are available to undergraduate students up to the cost of attendance and up to loan limits which vary based on the year in school and the amount already received. Your school determines the maximum amount you can borrow, again depending on the cost of attendance and other eligibility factors. There are no interest-free periods for these loans.
PLUS loans are made to parents on behalf of the student. These loans require a good credit history and will come with a 7.08 percent interest rate. The interest rate changes every year. Parent PLUS loans will accrue interest. PLUS loans can be awarded up to the cost of education.
Remember to Fill Out Your FAFSA Every Year
The FAFSA opens the doors to so many different funding avenues, it can quite literally change the course of your career and life. Graduating with as little debt as possible sets you up for success in the future. That’s why it’s so important that you stop asking “what is the FAFSA” and fill it out as soon as you get accepted to a college or even before, and remember to do so each year of your study.
Want more information about higher education and building a bright future for yourself? Feel free to browse through the certificate and degree programs that InterCoast offers!