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Student loans in the U.S.
Regulatory framework
Higher Education Act of 1965
U.S. Dept. of Education
FAFSA · Cost of attendance
Distribution channels
Federal Direct Student Loan Program
Federal Family Education Loan Program
Loan products
Perkins · Stafford
PLUS · Consolidation Loans

Private student loan

The Free Application for Federal Student Aid (known as the FAFSA) is a form that can be prepared annually by current and prospective college students (undergraduate and graduate) in the United States to determine their eligibility for student financial aid (including the Pell Grant, Federal student loans and Federal Work-Study).[1]

Despite its name, the application is not for a single federal program, being rather the gateway of consideration for:

  1. the nine federal student-aid programs
  2. the 605 state aid programs
  3. most of the institutional aid available

The U.S. Department of Education accepts applications beginning January 1 of each year for the upcoming academic year. Each application period is 18 months; most federal, state, and institutional aid is provided on a first come, first served basis. There are six (6) states — Illinois, Kentucky, North Carolina, South Carolina, Tennessee, and Vermont — that award state grants on a first-come, first-served basis until the money runs out.[2] Students are advised to submit a FAFSA as early as possible for consideration for maximum financial assistance.

The U.S. Department of Education advises students to utilize the IRS Data Retrieval Tool (DRT), which is made available on the FAFSA. This tool will retrieve most of the student's tax information, excluding wages, directly from the IRS and automatically input the information on his or her application. The DRT may be used for both students and parents alike.

Applicants who have completed a FAFSA in previous years may submit a renewal FAFSA. Any information that has changed must be updated annually. The FAFSA consists of numerous questions (at least 130 for the 2010–2011 academic year) regarding a student's (and his or her family's) assets, income, and dependency. These are entered into a formula that determines the Expected Family Contribution (EFC). A number of factors are used in determining the EFC including the household size, income, number of students from household in college and assets (not including retirement and 401(k) funds, the family home and small businesses owned and controlled by the family). This information is required because of the expectation that parents will contribute to their child's education, whether that is true or not.

The FAFSA does not have questions related to a student's or family's race, ethnicity, sexual orientation, disability, or religion. FAFSA does ask which colleges a student is applying to, and the entire list of up to ten colleges is sent to each college; as a result, admissions officers can see which other colleges a student is applying to.[3] There was controversy about college admissions officers and enrollment consultants using data mining techniques to analyze these lists,[4] and concerns that colleges interpret a higher FAFSA position as a sign of demonstrated interest in attending, as well as concerns that colleges could deny admission, waitlist applicants, or offer less financial aid as a result of such interpretations.[3][5][6][7] Advisers recommend alphabetical lists of colleges to obscure preferences.[5][7]

A Student Aid Report (SAR), which is a summary of the FAFSA responses, is forwarded to the student. The student should review the SAR carefully for errors and make any corrections. An electronic version of the SAR (called an ISIR) is made available to the colleges/universities the student selects on the FAFSA. The ISIR is also sent to state agencies that award need-based aid.

Some colleges also require the CSS Profile to be filled out as early as the same deadline as an early admissions or early decision application deadline, beginning October 1 of each year for the upcoming academic year. The CSS is a fee-based product of the College Board and usually concerns funds disbursed by a college rather than federal or state funds.


Nearly every student is eligible for some form of financial aid. Students who may not be eligible for need-based aid may still be eligible for an unsubsidized Stafford Loan regardless of income or circumstances.[8]

A student who can meet all of the following criteria may be eligible for aid:

  • has registered with the Selective Service System (for Conscription in the United States) between the ages of 18 and 25, if required to do so;[9][10]
  • maintains at least a C average minimum GPA for federal student aid or a higher minimum set by the school for institutional aid eligibility;[11][12]
  • is a U.S. citizen, a U.S. national, or an eligible non-citizen;
  • has a valid Social Security number;
  • has a high school diploma or GED;
  • completes a FAFSA promising to use any federal aid for education purposes;
  • does not owe refunds on any federal student grants;
  • is not in default on any student loans; and
  • has not been found guilty of the sale or possession of illegal drugs while federal aid was being received.[citation needed]

Student Aid and Fiscal Responsibility Act (SAFRA) changes the criteria for suspension of eligibility for drug-related offenses. Previously, students could lose eligibility for either the possession or sale of a controlled substance during the period of enrollment. SAFRA drops the penalties for possession of a controlled substance but retains the penalties for sale of a controlled substance. SAFRA increases the suspension to two years for a first offense and indefinite for a second offense.

Students who are military veterans and active duty service members may apply for financial aid by filing a FAFSA even if they also apply for education and housing benefits offered by the Post-9/11 G.I. Bill and its accompanying Yellow Ribbon program. The amount of military aid a student receives for a college education does not defer eligibility or reduce the amount of student aid that student could receive from the four federal grant programs – Pell, SMART, FSEOG, and TEACH – and many of the state student aid programs.

Types of financial aid[edit]

Federal Student Aid offers several different types of financial aid. The four most common types of aid students are offered from the federal government as a result of completing a FAFSA are:

  • Pell Grant – A grant of up to $5,730 (as of the 2014-15 Award Year) for students with a low expected family contribution.[13]
  • Stafford Loan – As of July 1, 2014, any Federal Direct subsidized loan will have a fixed interest rate of 4.66% and the interest is paid by the government while the student is enrolled at least half time. The Federal Direct unsubsidized loan also has a fixed interest rate of 4.66% and accumulates onto the outstanding balance.[14]
  • Federal Perkins Loan – A loan that is like the Stafford but is lent directly by schools that are Title IV-eligible. Interest rate is fixed at 5%.[15]
  • The Federal Work-Study Program – A program where students can get part-time work, up to a certain amount. In most cases, the federal government pays half of a student's wage and the school pays the other half.

Preparation and Filing Options[edit]

By federal law, students have two options when preparing their annual, federal student aid application:[16] either prepare the form on the U.S. Department of Education's website or get assistance from a fee-based FAFSA preparation service. Most financial aid is providing on a first-come, first-served basis and students are encouraged to prepare a FAFSA on January 1 of every year because millions of students compete for the billions in need-based and merit aid.

On the U.S. Department of Education's website, students have three preparation options: [17]

The Higher Education Opportunity Act of 2008 authorized fee-based FAFSA preparation. (The options are much like those for taxpayers who may either prepare their own income tax forms or get assistance from professional, tax-preparation services or software.)[18] Fee-based preparation of the aid form had been allowed as early as 1995. HEOA formalized the option in 2008. The oldest FAFSA preparation and assistance firm is Student Financial Aid Services, Inc. of Sacramento, California, which operates the website,[19] and which also provides free FAFSA preparation through its national program Access for All(R)designed to assist low-income students.[20]

By law, fee-based FAFSA preparation services must on initial contact with students inform them of the free option and be transparent about their non-affiliation with the U.S. Department of Education and their fees. Students should not engage with FAFSA preparation firms that are not transparent about FAFSA options and their fees upfront.

Many free FAFSA preparation resources exist.[21] Students are encouraged to bring questions to their schools' financial aid office or seek help from another resource at their high school such as a guidance counselor.[22] However, with the (2013) student to school counselor ratio being 457 to 1, students can learn more about the financial aid process at a large variety of websites, such as Edvisors [23] and The College Solution.[24]

See also[edit]


  1. ^ FAFSA – Free Application for Federal Student Aid
  2. ^ About FAFSA
  3. ^ a b Liz Weston, Reuters, November 11, 2013, Daily Finance, Colleges May Penalize Students Over Preference on Financial Aid Applications, Accessed Dec. 12, 2013, "... Students can list up to 10 schools to receive their financial aid information, and the ones they list first strongly predict which enrollment offers they're likely to accept, college consultants say...."
  4. ^ W. Kent Brands, Huffington Post, June 19, 2013, Does Big Data Know Best? NSA and College Admissions, Accessed Dec. 13, 2013
  5. ^ a b Ry Rivard, October 28, 2013, Inside Higher Ed, Using FAFSA Against Students, Accessed Dec. 12, 2013, "...Now, some colleges use this FAFSA position when considering students’ applications for admission, which may affect decisions about admission or placement on the wait list, said David Hawkins..."
  6. ^ CBS News, Lynn O'Shaughnessy, October 30, 2013, Be careful what you share on the FAFSA, Accessed Dec. 12, 2013, "...The order, however, could also be hurting students who list their favorite school as No. 1. If a teenager shows too much interest in a school, the admission office may decide to offer the applicant a lower award because it is assumed that the child will enroll anyway...."
  7. ^ a b Rachel Fishman, October 28, 2013, Access to Higher Education, Higher Ed Watch, The Dark Side of Enrollment Management, Accessed Dec. 13, 2013, "...The FAFSA should either not allow institutions to see where students have applied or it should list the institutions in alphabetical order...."
  8. ^ "Eligibility for Aid FAQ". 
  9. ^ FAFSA.ed.gov: Most male students must register with Selective Service to receive federal student aid
  10. ^ FAFSA.ed.gov: Am I eligible for student aid?: If you are a male between the ages of 18 and 25, you must register or already be registered with Selective Service. If you are a citizen of the Federated States of Micronesia, the Republic of the Marshall Islands or the Republic of Palau you are exempt from registering.
  11. ^ "Eligibility for Aid FAQ". Retrieved 2014-03-25. 
  12. ^ http://studentaid.ed.gov/eligibility/staying-eligible.  Missing or empty |title= (help)
  13. ^ "What types of aid are available?". 
  14. ^ http://studentaid.ed.gov/types/loans/subsidized-unsubsidized
  15. ^ http://studentaid.ed.gov/types/loans/interest-rates
  16. ^ "FAFSA Filing Options". 
  17. ^ "FAFSA Filing Options". 
  18. ^ Higher Education Act of 2008 PUBLIC LAW 110–315—AUG. 14, 2008 122 STAT. 3279-80
  19. ^ http://www.fafsa.com
  20. ^ http://www.fafsa.com/AccessforAll
  21. ^ http://www.fafsa.com/understanding-fafsa/free-fafsa-assistance
  22. ^ http://www.fastweb.com/financial-aid/articles/3179-are-there-any-fees-for-filing-the-fafsa
  23. ^ http://www.edvisors.com/fafsa/secrets/
  24. ^ http://www.thecollegesolution.com/need-fafsa-help-here-are-6-resources

External links[edit]