How To Apply For Federal Student Aid

Students submit the FAFSA every year while they attend college. The renewal FAFSA simplifies the process by automatically populating the form with information from the previous year. Applicants either update any financial information for the current year or submit a new FAFSA form for each year.

Applicants correct or update their FAFSA form any time before the annual deadline at the end of June. Students log into the FAFSA website with their FSA ID, select "make FAFSA correction," and update their information. Students often also contact their school's financial aid office to appeal their financial aid award.

The expected family contribution includes the total amount a student's family contributes toward their college expenses. For dependent students, the EFC includes their parents' expected financial contribution. For independent students, the number lists their expected contribution. Students appeal their EFC if their circumstances change. For example, job loss, death, or divorce often affect the EFC.

The cost of attendance includes all costs associated with enrolling at a particular school. The COA combines tuition, fees, estimated textbook and supply costs, and the cost of living. This number varies by school. Private schools, for example, typically charge higher tuition rates than public institutions.

After filling out the FAFSA form, applicants receive a student aid report. The SAR lists the student's expected family contribution based on the financial information submitted in the FAFSA application. The SAR also shows the student's eligibility for federal student aid programs.

Students who take out federal loans after filling out the FAFSA must repay those loans. Student loan repayment terms vary by the type of loan and the borrower's unique circumstances. However, the FAFSA also qualifies students for grants and work-study programs, which recipients do not repay.

Federal aid covers tuition costs for qualifying students. The FAFSA uses the cost of attendance and a student's expected family contribution to award aid. Undergraduates and graduate students use federal grants, loans, and work-study jobs to pay for their tuition costs.

Federal grant programs provide money to students with no obligation to repay the award. Prioritize grants before taking out student loans. Both undergraduates and graduate students qualify for federal grants. However, some programs, like the Pell Grant, only award funds to undergraduates. Federal grants like the TEACH Grant also require a service obligation. 

This section introduces federal grants, including the eligibility requirements and maximum annual awards.

Federal Pell Grant

The Federal Pell Grant program awards funds to undergraduates who demonstrate exceptional financial need. Eligibility depends on the student's expected family contribution, the cost of their school, and their enrollment status. Recipients also cannot hold a bachelor's or graduate degree. In the 2021-2022 academic year, recipients receive a maximum of $6,495.

FSEO Grants

The Federal Supplemental Educational Opportunity (FSEO) Grant supports undergraduates with exceptional financial need. The federal student aid program distributes FSEO funds to participating schools, which administer the program. Recipients receive up to $4,000 per year based on their financial need, available funds, and their other sources of financial aid.

TEACH Grants

The Teacher Education Assistance for College and Higher Education (TEACH) Grant provides up to $4,000 per year for educators in eligible programs. Applicants agree to teach in a low-income school or high-needs field after graduation. If recipients do not meet the service obligation, then they repay the grant as a loan.

Service Grants

The Iraq and Afghanistan Service Grant provides financial aid for the children of service members who died in Iraq or Afghanistan. Eligible applicants include students under 24 years old or enrolled in college at the time of the parent or guardian's death. Students can receive up to $6,495 for the 2021-2022 award year.

Federal student loan programs lend money to eligible students. While some programs, including Direct Subsidized Loans, require financial need, others do not. With a subsidized loan, the federal government pays interest during school and deferments.

Both undergraduate and graduate students qualify for federal loans. Students who take out federal loans qualify for loan forgiveness and deferment programs. Fill out the FAFSA and exhaust your federal loan options before turning to private loans.

Direct Subsidized

Undergraduates who demonstrate financial need qualify for Direct Subsidized Loans. With a subsidized loan, the federal government pays interest while the borrower attends school, during a six-month grace period after leaving school, and during any loan deferment periods. Subsidized loan borrowers currently pay 2.75% interest.

Direct Unsubsidized

Direct Unsubsidized Loans do not require students to show financial need. Borrowers pay interest starting when they take out the loan. Currently, undergraduate borrowers pay 2.75% interest on unsubsidized loans, while graduate and professional borrowers pay 4.30% interest.

PLUS Loans

Parents, graduate students, and professional students qualify for Direct PLUS loans. The U.S. Department of Education issues PLUS loans to parents and graduate students who pass a credit check. PLUS loan borrowers can take out loans up to the cost of their school's attendance minus other forms of financial aid.

The federal work-study program connects income-eligible students with part-time jobs. Schools administer the work-study program and place work-study students in on-campus and off-campus roles that support their school or serve a public interest. Both part-time and full-time undergraduates and graduate students qualify for the program.

In their work-study jobs, students earn at least the minimum wage. Students receive either an hourly or salary pay, depending on their degree level and job. Work-study recipients receive an annual award after filling out the FAFSA. Students cannot earn more at their job than their work-study award.

New users create an FSA ID, or a username and password, to fill out the FAFSA. The FSA ID also lets users digitally sign their FAFSA form. Parents can create their own FSA ID to sign applications; however, parents should not create an FSA ID for their child.

Applicants provide certain information to fill out the FAFSA, including a Social Security number, federal income tax returns, and bank statements. Dependent students also provide financial information for their parents. Applicants submit information on any investments or untaxed income to determine their financial need.

FAFSA applicants enter school codes to indicate which schools should receive their student aid report. The form provides a look-up feature if applicants do not know the school code. Students can list up to 10 schools on their FAFSA and send their student aid report to additional schools after submitting the form.

Dependent students provide information about their parents, including parental income, on the FAFSA. The application requires information about legal parents, including stepparents. Visit the FAFSA site for details on determining the legal parent. 

Independent students do not provide information about their parents.

The FAFSA determines a student's expected financial contribution based on their income and their parents' financial information for dependent students. The FAFSA requires tax returns, W-2 statements, bank account and investment information, and untaxed income information. The IRS Data Retrieval Tool transfers tax information onto the FAFSA application.

After filling out the FAFSA, students either sign electronically with their FSA ID or send the form by mail. The federal student aid program analyzes the FAFSA application to create a student aid report (SAR). Electronic filers receive their SAR within a few days, while paper filers often wait several weeks.

Applicants need to submit the FAFSA by the last day in June. Colleges and states sometimes set earlier deadlines.