More and more students are choosing to pursue higher education—and with that comes the price tag associated with attaining a college degree. College tuition today is much higher than it was decades ago. According to the National Center for Education Statistics, the average cost to attend a 4-year college has increased 180%, from $10,231 in 1980 to $28,775. Luckily, there are ways to get financial aid—of which includes the FAFSA—to help lessen that cost.
What is the FAFSA?
The Federal Application for Student Financial Aid (FAFSA) is an official form that students fill out to get federal student aid in the form of federal grants, work study, and/or loans. There is no cost to complete and submit the FAFSA. With the information provided on the FAFSA, state and colleges determine applicants’ state and school aid. Completing the FAFSA is essential for attaining any basic financial aid package, so it is crucial to make sure it is submitted in time.
How do I apply for FAFSA?
Sixty-six percent of students apply for federal financial aid through FAFSA, which can be done online at studentaid.gov. From there, you will need to create a FAFSA ID. Dependents will need their parents to create their own separate FAFSA ID and report their information as well. If you are unsure if you are considered a dependent student, visit this page.
Make sure you have personal and financial information at hand while going through the application. You will also need codes of all the schools you want to receive your FAFSA results; this is necessary for the school to determine your school financial package, which is separate from the federal one and school-specific. The 2022-23 Federal School Code List of Participating Schools can be found here.
The FAFSA application opens each year on October 1 for the upcoming school year. The deadline to submit for the 2022-2023 school year is June 30, 2023. It is also important to note that the FAFSA must be filed each year; filing one year does not guarantee financial aid for the rest of your academic years.
How is the amount of financial aid I receive determined?
There are several factors involved in the calculation of financial aid awards. The first is determining your cost of attendance (COA) at your school. The COA can include costs such as tuition and fees, room and board, books and supplies, transportations, etc. With this in mind, the COA for each student varies because of each individual’s situation.
A metric called the expected family contribution (EFC), which is a number colleges use to determine how much financial aid to offer you. It does not signify the amount your family is expected to pay for that academic year; however, the lower your family’s EFC is, the larger your financial aid package will be. Depending on your dependency status, the EFC is calculated using different formulas established by law. Financial elements that are used to determine a family’s EFC can include taxed and untaxed income, assets, and benefits.
From there, need-based aid is calculated by subtracting your EFC from your COA. An example of this is as follows: Suppose your COA is $20,000 and your EFC is 8000, your financial need is $12,000. What this means is that you cannot receive more than $12,000 in need-based aid. Examples of need-based aid programs are Federal Pell Grant, Direct Subsidized Loan, and Federal Work-Study.
There is also non-need-based aid, which does not take your EFC into account and instead subtracts financial aid you’ve been awarded so far from your COA. An example of this is as follows: Suppose your COA is $20,000 and have $12,000 in need-based aid awarded to you already, your non-need-based aid is $8,000. Examples of non-need-based aid programs are Direct Unsubsidized Loan and Federal PLUS Loan.
What are the different types of aid offered?
There are 4 main categories of aid that students can receive in their financial aid package:
- Grants: Grants are need-based aid considered to be “free money”. As long as one meets all the eligibility requirements, grants do not need to be repaid. There are federal, state, and also school grants. An example of each would be the Pell Grant, Cal Grant (California), and Blue & Gold Opportunity Plan (UCLA), respectively.
- Scholarships: Like grants, scholarships do not need to be repaid. However, scholarships are usually merit-based. Many organizations offer scholarships to students for academic and/or athletic achievement, community involvement, essay writing, etc. There are hundreds of scholarships available to apply for online.
- Loans: Loans need to be repaid over a period of time; they also accrue interest. Direct subsidized loans are need-based loans for undergraduates that do not accrue interest while you are in school until 6 months after your graduation. Once that 6 month grace period is over, interest on the loan begins. Conversely, direct unsubsidized loans are non-need-based loans for all students that are not interest-free. In addition to those 2 types of loans, direct PLUS loans are available to parents and direct consolidation loans allow several loans to be combined into one loan.
- Work study: Being eligible for the work study program allows students to work part-time while being a student. The money earned from work study jobs are used to pay for tuition or other education-related expenses. The amount you are granted is the maximum you can earn in an academic school year.
Other forms of aid are also available to students, but those are often non-need-based forms of aid and/or from private lenders.
What do I need to do after I submit the FAFSA?
After you’ve filled out and submitted the FAFSA form, you should receive a Student Aid Report (SAR). The SAR is a summary of the information you reported in your FAFSA; it also includes your EFC, projected aid, and additional information if you’ve been chosen for verification. Review your SAR to check that everything that you have submitted is correct. If you find an error, make sure to correct it. Schools that you chose to send your financial information to will follow-up with you later—either to request additional information or to provide you with your financial aid package.
How Student Hires Can Help Students Prepare For College
Student Hires aims to educate students in areas related to career development, of which includes applying to college. Making sure our students understand the college application process and what is required of them is essential. There are many aspects involved, so we hope to provide clarity to each of those different components to best set our students up for success. Not only do we hope to support students, but also to parents, who play crucial roles in a student’s development. We hope to provide educational articles for parents that will help them understand their place in their student’s development not only in school, but in life as well.
Financial aid is an important step in the college application process that is often overlooked. Yet, it is crucial for students to remember to apply for FAFSA and submit it before the deadline. Finances can be a huge barrier for students pursuing higher education, but the FAFSA aims to make college a little more accessible.