What is FAFSA?

The Free Application for Federal Student Aid (FAFSA) is a critical part of any financial aid request program. 

FAFSA is the primary form you should use to apply for financial aid. It’s used by virtually all two- and four-year colleges, universities and career schools to determine your eligibility for federal student financial aid (including Pell grants, Stafford loans, PLUS loans, and work-study programs). In addition, most states and schools use information from the FAFSA to award non-federal aid.

Now many students and their parents find the form, like a lot of government paperwork, to be tedious, time-consuming and frankly annoying to fill out, worse that the 1040 income tax return. On top of all that, you get to fill it out every year that you need money for school. (!)

However, don’t ignore the FAFSA:  if you don’t fill it out, you could be walking away from zero- or low-interest financial aid money, including grants, work-study programs and federal student loans!

Tip: The best time to file a FAFSA is immediately after January 1st of each year, so that you have access to the greatest amount of funds available for scholarships and grants awarded on a first-come, first-served basis.

To fill out the FAFSA, you’ll need records of income earned in the year prior to when you will start school. You may also need records of your parents’ income information if you are a dependent student.  Also have income tax returns, bank statements and other financial documents handy to complete the form.

Tip:  There are many places that will help you complete a FAFSA for for a fee.  However, you can file at the US Department of Education’s FAFSA website absolutely free!

Once submitted, the US Department of Education enters the form information into a formula that determines the Expected Family Contribution (EFC).  A number of factors are used in determining the EFC including the family size, income, number in college, and assets (not including retirement and 401K).

Once your FAFSA has been filed, you will receive a Student Aid Report (SAR), which is a summary of the FAFSA responses and your official EFC.  The SAR is the official determination by the federal government about whether or not a student qualifies for different types of federal assistance.  Be sure to review the SAR carefully for necessary corrections. An electronic version of the SAR (called an ISIR) is sent to colleges/universities the student selected on the FAFSA.  That’s when you can work with your school’s financial aid office to compile your financial aid package.