What is the FAFSA?

The Free Application for Federal Student Aid (FAFSA) can help future and current college students get scholarships, grants, work-study jobs and federal student loans.

There are no income limits to apply, and many state and private colleges use the FAFSA to determine your financial aid eligibility. To qualify for aid, however, you’ll also need to submit a FAFSA every year you’re in school.

Here is our complete FAFSA guide, including how to apply.

Types of aid available through FAFSA

While there are no overall FAFSA income limits, your family’s specific financial situation determines the size of the aid package you can expect to receive.

But even if you’re worried your parents make too much for need-based aid, it’s still worth submitting the FAFSA to see if you can receive aid that isn’t based on need. You can also use the Federal Student Aid Estimator to calculate your potential financial aid before starting to see where you stand.

Below are the types of federal financial aid you can obtain via the FAFSA:

Federal Pell Grant

The federal Pell Grant offers free money for college. The amount you receive will depend on your financial need and your school’s cost of attendance. Pell Grant amounts change annually.

Pell Grants are available only to undergraduates, and you can only receive them for up to 12 semesters. Check out our guide to the Pell Grant to learn more.

Federal Supplemental Educational Opportunity Grant (FSEOG)

Undergraduates with exceptional financial need can qualify for funds under the Federal Supplemental Educational Opportunity Grant (FSEOG). While the government generally provides enough Pell Grant money for each participating school to cover all its eligible students, that might not be the case with the FSEOG. However, those with Pell Grants are more likely to receive FSEOG funds.

Federal work-study programs

Schools participating in work-study programs provide government-funded part-time jobs for qualifying students with financial need. These programs are available for undergraduate and graduate students alike and, in some cases, your assigned work will be related to your course of study or could involve community service.

You can expect to earn at least the federal minimum wage with a work-study position. However, certain jobs are paid more, depending on the skills needed and the school’s available funds.

Direct subsidized loan

A federal subsidized loan can help close the gap if grants don’t cover your expenses. The government pays the interest on the direct subsidized loan while you attend school — as long as you enroll at least half-time — and during your student loan grace period. However, subsidized loans are only available to undergraduates.

Congress determines the interest rate on all student loans for the upcoming school year, which are then listed on the Federal Student Aid site.

Direct unsubsidized loan

This financial aid program is not based entirely on economic need. You can receive an unsubsidized loan for any amount up to the year’s maximum student loan amount or your school’s cost of attendance (whichever is less), regardless of your year in school.

Unfortunately, the government won’t pay any interest on unsubsidized loans. The interest will accrue and capitalize upon graduation unless you make in-school interest payments. The fees and rates for undergrad students are the same as with subsidized loans, as mentioned in the previous section.

Direct PLUS loan

Graduate or professional students can take out a grad PLUS loan, while parents of undergraduate students can help fund their child’s education with a parent PLUS loan.

The interest is unsubsidized, so interest will begin to accrue as soon as you get the funds. Interest rates on PLUS loans are also higher than for direct subsidized and unsubsidized loans.

The maximum amount you can borrow in PLUS loans is based on the school’s cost of attendance, minus any other financial aid you receive. Parents can also consider private parent loans if they need additional funds, while many lenders also have private student loans for grad students.

Teacher Education Assistance for College and Higher Education (TEACH) grant

The TEACH Grant assists students who are completing coursework related to teaching. To qualify for this award, students must sign a TEACH Grant Agreement to Serve or Repay in which you agree to teach:

• At an elementary school, secondary school or educational service agency that serves students from low-income families
• In a high-need field
• For at least four academic years within eight years after completing the course of study for which you received the grant

Note that if you don’t fulfill the requirements, your grant becomes a loan that you must repay.

Iraq and Afghanistan Service Grants

Iraq and Afghanistan Service Grants are available to students with a parent or guardian who died during military service in Iraq or Afghanistan after 9/11. This award equals whatever the current amount for the Pell Grant is.

State grants

The FAFSA is a gateway not only for federal student aid, but also for funding from your state government. Not all state grants require a FAFSA, but many do.

Be sure to have a look at our state-by-state grant guide to these awards in order to maximize your grant funds and hopefully minimize the amount of student loans you’ll need.

FAFSA vs. CSS Profile

Although the FAFSA is the main financial aid application form for most types of public funding, another form worth completing is the CSS Profile. Administered by the College Board, the CSS Profile helps colleges and private scholarship programs calculate a student’s level of financial need.

Here are the key differences and similarities between the FAFSA and CSS Profile.

Keep in mind that your college may require you to complete both the FAFSA and the CSS Profile. In addition, many schools have their own scholarship or aid applications. Contact your school’s financial aid department to ensure you complete everything on time — the sooner you get started, the better.

How to complete the FAFSA

Head over to the Department of Education website to start your FAFSA application. If you’ve filed a FAFSA in the past, you can automatically input the previous information into your current application. Otherwise, follow these steps to complete your FAFSA.

1. Create your FSA ID

While you don’t need a Federal Student Aid (FSA) ID to fill out the FAFSA, creating one is a good idea. Having an FSA ID makes it easier to find your application once started, allowing you to quickly pull up your student aid reports and track your student loan servicers.

2. Gather required documents

You’ll usually need the following information in advance, so have it all ready to help speed up the FAFSA process:

• Your Social Security number or USCIS number (A-number if registered before May 10, 2010)
• Your driver’s license (if you have one)
• Your federal tax returns
• Records of your untaxed income
• Records of assets

If you’re a dependent student, you’ll also need to provide your parents’ tax returns, records of untaxed income and assets. You can save time by uploading tax documents from both you and your parents via the IRS Data Retrieval Tool in the FAFSA form.

3. Answer the FAFSA questions

The FAFSA form will ask multiple questions to determine if you’re a dependent or independent student, along with questions regarding family structure and residency status.

4. List the colleges you’re interested in attending

You can list up to 10 schools on your online FAFSA application, or four schools if you’re submitting a paper version of the FAFSA. If you’re on the fence about your college choices, pick the most likely possibilities, since you can remove and add schools from your FAFSA later.

You can find federal school codes at StudentAid.gov.

While you typically won’t need to list your schools in a particular order, some states have specific criteria if you want to be considered for state aid. Research your state’s guidelines before listing schools on your FAFSA form.

Every school on your list will automatically receive your FAFSA results, using this information to determine your overall aid package.

Special cases affecting federal financial aid eligibility

What to do once you’ve submitted the FAFSA

After submitting your FAFSA, you’ll receive a Student Aid Report outlining your application and eligibility, usually within a few days to three weeks. If you see any errors on your Student Aid Report, you’ll need to update your FAFSA online.

Your college will review your FAFSA and other enrollment materials. The financial aid award letter often comes around the same time as an admissions letter, though this can vary by school. The award letter outlines your aid package, including federal student aid, institutional aid and loans.

Follow the instructions in the letter to accept and claim your financial aid. You must respond by the start of the term to avoid losing your financial aid award.

Appealing your aid award

If you feel you weren’t given enough aid based on your financial situation, you have the option to appeal your financial aid award.

If you go this route, your first step should be to call your school’s financial aid office and ask about the specifics of its appeal process. You’ll likely need to write a letter explaining the reasons behind your request for an appeal, such as a change in employment or financial circumstances. Include supporting documentation, like bank statements or copies of your award letters from other schools.

Appeals are considered on a case-by-case situation, and of course, there’s no guarantee you’ll receive more aid. For more details, see our guide to appealing your financial aid award letter.

Additional ways to pay for college

If your educational costs exceed the federal limits, you can consider private student loans to help cover remaining expenses. This type of loan will often come with flexible interest rates and repayment terms.

However, be sure to do your research before signing on the dotted line. Private student loans don’t offer the same government protections as federal student loans, such as income-driven repayment plans and student loan forgiveness programs.

Here are some other ways to pay for college:

• Get a high-paying college job
• Apply for full-ride scholarships
• Consider attending a “no loans” college to reduce your overall student loan debt (or start with community college first)
• Ask friends and family for monetary gifts through your 529 college savings plan
• Look at other options in our list of strategies to pay for college