How Does FAFSA Work?

With many students looking to go to college or trade school, many of them need financial aid to help cover the hefty tuition costs that come with seeking a higher education. This is where FAFSA comes in to help students with these costs. FAFSA stands for Free Application for Federal Student Aid. It is a form that allows students who are currently enrolled in college or people looking to go to college to receive financial aid to help them cover the large tuition costs. 

FAFSA requires you to fill out a form that will determine your eligibility for aid. This helps the financial aid office at the school you applied to know how much aid you could possibly receive. Many factors go into determining how much money you could receive, and it’s broken up into four groups: cost of attendance, student aid index, need-based aid, and non-need-based aid.

To start, the cost of attendance is basically how much it will cost to attend the college or university of your choosing. Many colleges will calculate your cost of attendance for the year you’re attending while some other programs might have your cost of attendance for longer than a year. Now your cost of attendance is broken up into estimations based on tuition and fees, the cost of food and housing, the cost of books, transportation, supplies, and other miscellaneous items, costs that could be disability-related, and reasonable costs for study-abroad programs.  

Second, the Student Aid Index is the eligibility index number that your school’s financial aid office may use to determine how much federal aid you may receive if you attend the school. The results or numbers you get are determined from the information you put in your FAFSA form. Now most tax information used to calculate a Student Aid Index is usually transferred directly from the IRS to the FAFSA form though some people may have to manually provide tax information. Also, a SAI is not a dollar amount or what your family could expect in aid a negative SAI could mean a student has a higher financial need. 

Need-based aid is financial aid you could receive if you have financial need and have met other eligibility criteria. Now you are unable to receive more need-based aid than the amount of your financial need. Your financial need is determined by your cost of attendance subtracted from your student aid index. Non-need-based aid is also determined by your school. It is calculated by your cost of attendance minus the financial aid you have been awarded so far, determining how much you are eligible for with non-need-based aid. It isn’t calculated using your Student Aid Index but rather your cost of attendance and how much you have been awarded so far are the biggest factors. 

Now after you are given your financial aid you will go to the school of your choice. They will apply your aid to the amount you owe and you will pay that off with all the other college costs they have for you. Some of them have certain requirements to uphold if you are given certain types of aid or scholarships. One of the most common requirements for financial aid is satisfactory academic progress. Also making sure you complete the FAFSA form every year will benefit you.

Now FAFSA states as you prepare to graduate from college you should get ready to repay your student loans. Most students who use loans have a six-month grace period before payments are due. The Federal Student Aid recommends using this time to organize and find a repayment plan that could work best for you.