|Student loans in the U.S.|
|Higher Education Act of 1965
U.S. Dept. of Education
FAFSA · Cost of attendance
|Federal Direct Student Loan Program
Federal Family Education Loan Program
|Perkins · Stafford
PLUS · Consolidation 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 (including the Pell Grant, Federal student loans and Federal Work-Study).
Despite its name, the application is not for a single federal program, being rather the gateway of consideration for:
- the nine federal student-aid programs
- the 605 state aid programs
- 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. Students are advised to submit a FAFSA as early as possible for consideration for maximum financial assistance.
The 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). 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. There was controversy about college admissions officers and enrollment consultants using data mining techniques to analyze these lists, 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. Advisers recommend alphabetical lists of colleges to obscure preferences.
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. The CSS is a fee-based product of the College Board and usually concerns funds disbursed by a college rather than federal 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.
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;
- 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.
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
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 $5,645 (as of the 2013-14 Award Year) for students with a low expected family contribution.
- Stafford Loan – As of July 1, 2013, any Federal Direct subsidized loan will have a fixed interest rate of 3.86% 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 3.86% and accumulates onto the outstanding balance.
- 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%.
- 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.
Students have three options when preparing their annual federal student aid application:
- Online at www.fafsa.ed.gov
- By paper
- By phone
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.) Fee-based preparation of the aid form had been allowed as early as 1995. HEOA formalized the option in 2008.
Despite the availability and legality of these fee-based services, many free resources exist. 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.
- FAFSA – Free Application for Federal Student Aid
- About FAFSA
- 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...."
- W. Kent Brands, Huffington Post, June 19, 2013, Does Big Data Know Best? NSA and College Admissions, Accessed Dec. 13, 2013
- 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..."
- 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 its assumed that the child will enroll anyway...."
- 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...."
- FAFSA.ed.gov: Most male students must register with Selective Service to receive federal student aid
- 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.
- Higher Education Act of 2008 PUBLIC LAW 110–315—AUG. 14, 2008 122 STAT. 3279-80