As you prepare to attend your dream college, one question often takes over the excitement: how do you pay for college? Although you may have every factor sorted, not knowing how you’ll afford your graduate degree can be a major setback. Well, don’t worry! 

By filling out the Free Application for Federal Student Aid, or FAFSA, you can learn about different funding sources for college and determine your eligibility for them. 

This guide has everything you need to know about the role of FAFSA in college funding!

The Role of FAFSA in College Funding

As the name suggests, the FAFSA is a standard application used by national, state, and local governments and potential colleges to grant you financial aid. Once you fill out the FAFSA, you may access loans, grants, fellowships and assistantships, and other scholarships. 

Regardless of your income bracket, it’s smart for families with college-bound students to fill out the FAFSA. This is mainly because college prices have significantly shot up over the years. According to a report by the Education Data Initiative, the average US college tuition hit $9,349 for in-state students and $27,023 for out-of-state students in 2023. 

Luckily, the FAFSA steps in to ease most of your financial burden in graduating without breaking the bank. To evaluate a family’s need for aid, the FAFSA seeks to understand your parents’ and your income, family members, and assets. Then, it comes with your Student Aid Index (SAI), which calculates how much aid you qualify for. 

Types of Funding Sources to Pay for College 

Getting a proper understanding of college funding is important. Filling out the FAFSA requires no fees. Once your financial aid form has been processed, you’re eligible for the following aid categories to pay for your college education. 

Scholarships 

Scholarships are the most common type of financial aid option that doesn’t have to be repaid. Typically, scholarships are granted by states, schools, non-profits, and professional associations. The scholarship amount depends on your financial need, achievements, and background. 

Unlike grants, the scholarship money is a one-time deal that comes with a single lump sum of cash. Schools and groups might use your CSS Profile or the FAFSA to award you scholarships.

Grants

Grants include aid money that comes from the federal and state governments or even from certain schools and private groups. Typically, the grant you receive depends on your family’s financial standings, and you don’t have to pay it back! 

After evaluation, FAFSA determines how much grant you’re eligible for. Some common grants include the Pell Grant and TEACH Grant. 

Federal Work-Study Programs 

Federal work-study programs are a great deal for students in financial need to earn extra cash with part-time gigs, usually on campus. For instance, they could offer library assistance, work as research assistants, or even tutor their peers. 

Jerome L. Rekart, Ph.D. a former Vice President of Research and Insights at Southern New Hampshire University, explains,

“Federal Work-Study programs offer a dual benefit for students; they provide a practical way to earn money for college expenses while also gaining valuable work experience that can be directly applied to their future careers. This not only eases the financial burden of higher education but also enhances students’ resumes, making them more competitive in the job market post-graduation.”

The best part? The cash you earn through federal work-study programs can be used to offset different college expenses. Whether it’s covering tuition, room or board expenses, technology, or transportation costs, these programs have your back. 

Loans 

For those who need to borrow, financial awards like loans are the way to go. However, loan money needs to be returned, usually with interest. When it comes to offsetting tuition, students rely on both federal and private loans to foot the bill.  

Unlike personal loans, student loans are strictly for education-related expenses like tuition costs or college supplies. The two main categories of student loans include: 

• Federal Loans 

They are from the US government and include Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans. 

• Private Loans 

On the contrary, private loans are borrowed from banks or other lenders with a decent credit score. They often have higher interest rates, so it’s best to first tap into federal loans and check whether you’re eligible for them. 

How to Become Eligible for Federal Financial Aid? 

The FAFSA is a financial compass that first determines how much aid you qualify for and then guides your way to the appropriate financial support you deserve. Before applying for federal FAFSA money, it’s important to meet the following eligibility requirements: 

• Be a US citizen, permanent resident, or eligible non-citizen with a valid Social Security number. 
• Show financial need as a part of the FAFSA eligibility 
• Maintain decent academic progress while in school 
• Possess a high school diploma or GED certificate 
• Not owe money on a federal grant 

Nonetheless, international students or undocumented students don’t qualify for federal aid using the FAFSA. Such students may explore scholarship opportunities from schools, employers, or private organizations. 

Each year, the FAFSA opens on October 1, and it’s best to submit your application as soon as you can. To continue receiving the aid, you must file for the FAFSA each year. 

However, keep checking for updates about financial aid programs to maximize your chances. 

Steps to Apply for Financial Aid With FAFSA

Applying for financial aid isn’t as daunting as it seems. To put your mind at rest, here’s a simple step-by-step process to apply for financial aid with FAFSA and stay on track: 

Step 1: Gather the Relevant Documents 

First, gather your necessary documents—driver’s license, Social Security Number, and academic records. You can use the Alien Registration Number instead of the Social Security Number if you’re an eligible non-citizen. 

Next, collect your financial information to prove you qualify for aid. The FAFSA requires details like your latest W-2s, federal tax returns, current bank statements, and records of any investments or assets you own. 

Step 2: Create an FSA Portal 

If you plan to fill out the FAFSA online, the next step is to create an official FSA ID. With an ID, you can electronically sign documents, access sensitive information, and log in to your federal student aid account.

Note: If you’re a dependent, your parent or guardian will have to make a separate FSA ID. 

Step 3: Fill out the FAFSA 

Once you’re logged in, pick the academic year you’re applying for. Here, you’ll need to fill out five different sections separately, including: 

• Student Demographics 
• School Selection 
• Financial Data 
• Parent Demographics 
• Dependency Status 

Step 4: Review & Submit Your Application 

After double-checking the information you entered in the previous step, it’s time to submit your application. You can log in to your FAFSA account whenever you want to keep track of your application. 

Step 5: Receive Your Student Aid Report

Finally, wait for around 3-5 days for your Student Aid Report (SAR). This report helps you understand your federal student aid eligibility. Your school will use it to figure out what aid you qualify for, so accuracy is key. 

Related Questions 

When Should I Fill Out My FAFSA?

The last date to fill out the FAFSA usually revolves around the end of June every year. However, some states might have their own timeline, so the key is to keep an eye out for your state’s specific deadline and fill it out accordingly. 

How Long Does the FAFSA Take To Process Once You File It?

If you submit your FAFSA online, the process typically takes around 3-5 days. Alternatively, the old-school paper form may take a bit longer, usually around 7-10 days. You’ll know your FAFSA has been processed once you get your FAFSA Student Aid Report. 

Can You Make Changes to the FAFSA After Submitting It?

Yes, you can make changes to the FAFSA even after submitting it. Simply log in to your FSA ID and tweak any information that needs correction. However, wrap up your changes by the deadline specified by them. It’s best to double-check your financial information before submission to avoid any issues. 

Conclusion 

When it comes to covering your college tuition, your best bet is to apply for federal aid. No matter how much you have in your assets, filling out the FAFSA can be a smart move in saving up. Plus, they offer flexible terms, so your expenses don’t hold you back!