How to apply for federal student aid through the FAFSA

July 24, 2023

The FAFSA unlocks the potential for numerous financial benefits, even if you think your family may not qualify, so file early and annually.


Every year, the federal government awards about $100 billion in the form of grants, low interest loans and work-study funds to help millions of students pay for college, according to the U.S. Department of Education, which uses the Free Application for Federal Student Aid (FAFSA) to determine students’ eligibility for federal financial aid.

Undergraduate students received an average of $15,330 in grants, aid and loans. Here's what you need to know to apply:


Should you complete the FAFSA?

In order to apply for federal student aid, you need to complete this application, but the form is helpful for non-federal student aid too. Many state governments, colleges and private universities use FAFSA to award their own aid and to  determine merit-based scholarships. 


What is the expected family contribution (EFC)?

The EFC is the amount the government believes your family can afford for college, based on the data you provide on the FAFSA. It is used to determine whether a student qualifies for federal and state grants, federally subsidized student work-study programs and loans. It’s also a main factor colleges use to determine the size of the aid package they extend to a given student.


What can be done to maximize your federal aid eligibility?

Income has the biggest impact on a needs-based financial aid award but there are other factors that go into this calculation.  Financial aid administrators do not assess the value of a family home, retirement accounts, life insurance policies or annuities.

You may want to shift income or spend assets strategically the year before applying. For example, consider paying down the mortgage on your primary home and purchasing personal items (computer or dorm supplies) that your student will need, since these assets aren’t considered in the expected family contribution.

If your family needs all your liquid financial assets for college costs, you should consider moving funds from a student account to a 529 plan or one held in the parent’s name, to reduce exposure.


When is the application due?

You can submit your application now for the upcoming school year. You have until June 30 to apply, but make sure to apply early to improve your chances of getting the most financial aid possible. Aid is limited and much of it is offered on a first-come, first-served basis. Deadlines for state and institutional financial aid vary. Some are as early as October 1; others are as late as June 30. So, make sure to check with your college.


What types of financial aid are available?

The types of financial aid include loans, grants, work-study programs and more. Federal student loans offer fixed interest rates and income-based repayment plans, which are not typically offered with private loans. All loans need to be paid back with interest.


What do I need to get started

Gather the following information for the application process:

  • Social Security numbers (parents and student)
  • Driver’s license numbers (parents and student) or equivalent legal identification
  • W2 forms and tax return from previous year (parents and student)
  • Investment statements – stocks, bonds, real estate (other than main residence), business and farm assets
  • Bank statements (savings and checking)
  • Records of untaxed income (child support, interest income and veterans non-education benefits)
  • Federal School Codes, provided by the schools or they can be found on the FAFSA website
  • Federal Student Aid FSA ID to get the process started

You can complete the application online or call to request one be sent to you. 


What happens after FAFSA completion?

You will receive the calculated expected family contribution in early spring, which defines the amount your family is asked to contribute to college. Results will be sent to you and the school(s) listed on the application.

If you’re eligible, the student financial aid award will be disbursed by the college. They will provide a summary of all sources of aid (loans, grants, scholarships and/or federal work study) based on eligibility determined by FAFSA. They will also explain how it will be disbursed (semester, quarter, trimester).


Continue reading to learn more about planning for your children’s education.

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