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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 · Expected Family Contribution
Distribution channels
Federal Direct Student Loan Program
Federal Family Education Loan Program
Loan products
Perkins · Stafford
PLUS · Consolidation Loans
Private student loans

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. In addition to demographic and financial information, applicants are asked to list up to ten schools to receive the results of the application once it is processed. There seems to be some concern, however, that colleges could deny admission, waitlist applicants, or offer less financial aid as a result of the order in which applicants list schools on the application.[1][2][3][4] Advisers recommend that students list their colleges on the FAFSA form in alphabetical order to obscure from recipient colleges any preferences for particular colleges.[2][4]

A Student Aid Report (SAR), which shows the federal government's conclusions about the student's eligibility for Need-based financial aid, based on the FAFSA information, is forwarded to the student. It shows the Expected Family Contribution, based on the information on the FAFSA, and comments on which need-based aid the student is eligible for. 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.


The official free-to-use FAFSA online site is FAFSA.gov.

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.[5]

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;[6][7]
  • maintains at least a C average minimum GPA for federal student aid or a higher minimum set by the school for institutional aid eligibility;[8][9]
  • 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.[10]

Student Aid and Fiscal Responsibility Act (SAFRA) of 2010 changed 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 dropped the penalties for possession of a controlled substance but retained 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 $5,775 (as of the 2015-16 Award Year) for students with a low expected family contribution.[11]
  • 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 4.29% and accumulates onto the outstanding balance.[12]
  • 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%.[13]
  • 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: 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 provided on a first-come, first-served basis, and students are encouraged to prepare and submit a FAFSA on the day it opens, January 1 of each year, using income estimates to be updated after taxes are filed.

On the U.S. Department of Education's website, students have three preparation options: [14]

The Higher Education Opportunity Act of 2008 authorized fee-based FAFSA preparation.[15] 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, or that promise to obtain scholarships.

Ideally, fee-based FAFSA preparers should not exist, as no one would need their services. The FAFSA, especially in the pre-Internet era, is a daunting form, calling for 80-some lines of information, and some simple calculations. The 1040 federal income tax form is a rough equal in complexity. In fact, the form's complexity has prevented some students' parents from completing it, thus depriving the children of their best chance at college.

Much thought and discussion has been devoted to the need to simplify the FAFSA, and thus help economically disadvantaged students attend college. (The payoff for the complex form is that the federal financial aid process is one of the most progressive - giving preference to the economically disadvantaged - programs of the federal government.) Moving it from paper to online, besides its other advantages, freed the filer from the need for calculations, skipped over unneeded questions (as for example in the case that the student has no dependents), and checked and flagged obviously incorrect, or uncompleted required questions. It has been proposed to allow the FAFSA system to access the Internal Revenue Service's personal income tax databases, so as to import income and tax information directly onto the FAFSA. However, this apparently simple measure has been complicated to implement. Congressional action is needed for any major simplification, affecting policy. Students are encouraged to bring questions to their school's financial aid office or seek help from another resource at their high school such as a guidance counselor.

See also[edit]


  1. ^ 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...."
  2. ^ 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..."
  3. ^ 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...."
  4. ^ 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...."
  5. ^ "Eligibility for Aid FAQ". 
  6. ^ FAFSA.ed.gov: Most male students must register with Selective Service to receive federal student aid
  7. ^ 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.
  8. ^ "Eligibility for Aid FAQ". Retrieved 2014-03-25. 
  9. ^ http://studentaid.ed.gov/eligibility/staying-eligible.  Missing or empty |title= (help)
  10. ^ https://www.whitehouse.gov/sites/default/files/ondcp/recovery/fafsa.pdf
  11. ^ "2015-2016 Federal Pell Grant Payment and Disbursement Schedules". 
  12. ^ https://studentaid.ed.gov/sa/types/loans/interest-rates
  13. ^ http://studentaid.ed.gov/types/loans/interest-rates
  14. ^ "FAFSA Filing Options". 
  15. ^ Higher Education Act of 2008 PUBLIC LAW 110–315—AUG. 14, 2008 122 STAT. 3279-80

External links[edit]