The FAFSA Explained: How to Apply for College Financial Aid

If your child is heading to college, the FAFSA is one of the most important forms you’ll fill out. It’s the gateway to federal financial aid and is used by many states and colleges to award their own aid. Completing it accurately and on time can make a significant difference in how much your family pays for college.

What the FAFSA is

The Free Application for Federal Student Aid, or FAFSA, is the form used to determine eligibility for federal student aid. Federal aid includes Pell Grants, which are need-based grants that don’t have to be repaid, Federal Work-Study, which provides part-time jobs for students with financial need, and federal student loans, including subsidized and unsubsidized Direct Loans.

Beyond federal aid, many states use the FAFSA to award state grants and scholarships, and many colleges use it to determine eligibility for their own need-based aid. Some private scholarships also require it. Even families who don’t expect to qualify for need-based aid often need to complete the FAFSA to access federal student loans.

Some colleges, particularly private institutions, also require an additional form, such as the CSS Profile, to award their own aid. Check each school’s requirements.

How the FAFSA calculates aid

The FAFSA uses information about your family’s income, assets and household size to calculate a Student Aid Index, or SAI. The SAI is a number that colleges use to determine how much financial aid a student is eligible to receive. A lower SAI generally means greater eligibility for need-based aid.

The FAFSA was redesigned in recent years to simplify the form, reduce the number of questions and change how aid eligibility is calculated. Some families saw changes in their eligibility as a result.

When to file

The FAFSA is filed for each school year. The form for the upcoming academic year typically opens in the fall of the preceding year. Filing early matters, since some state and school aid is limited and awarded on a first-come, first-served basis until funds run out.

Deadlines vary. The federal deadline is generally late in the academic year, but many states and colleges have much earlier deadlines. Check StudentAid.gov for current dates and deadlines, and check each college’s and your state’s deadlines too. Aim to file as soon as possible after the form opens.

What you’ll need

Before starting the FAFSA, gather the information you’ll need. The student and, if required, a parent will each need a StudentAid.gov account, sometimes called an FSA ID, which serves as an electronic signature. Creating accounts in advance can prevent delays, since verification can take a few days.

You’ll need Social Security numbers for the student and parents, if available. Tax information is needed too. The FAFSA uses federal tax information from two years before the school year, and in most cases, tax information can be transferred directly from the IRS with consent, which simplifies the process and improves accuracy.

You’ll also need information on savings, investments and other assets, such as bank account balances, investment accounts and certain business assets. Retirement accounts and the family’s primary home are generally not reported as assets on the FAFSA.

Information about untaxed income and the list of schools the student is considering will also be needed.

Tips for completing the FAFSA

File every year the student is in school. The FAFSA must be completed annually to remain eligible for aid, since family circumstances and aid eligibility can change from year to year.

Fill it out even if you think you won’t qualify. Many families are surprised to learn they qualify for some aid, and the FAFSA is required for federal student loans and many scholarships. There’s no income cutoff for completing the FAFSA.

List all schools your student is considering. Schools listed on the FAFSA receive your information and can create financial aid offers. You can add schools later if needed.

Double-check your information before submitting. Errors can delay processing or affect aid eligibility.

Watch for follow-up requests from schools. Some students are selected for verification, a process in which schools request documents to confirm FAFSA information. Respond quickly to avoid delays.

After you file

After submitting the FAFSA, you’ll receive a FAFSA Submission Summary showing your SAI and other information. Review it carefully and make corrections if needed.

Schools then send financial aid offers that may include grants, scholarships, work-study and loans. Compare offers carefully and focus on aid you don’t have to repay, such as grants and scholarships. Pay attention to the net cost of attendance, the total cost minus grants and scholarships, rather than just the total aid amount, since loans must be repaid.

If your family’s financial situation has changed significantly, such as due to job loss, medical expenses or other circumstances not reflected on the FAFSA, contact the school’s financial aid office. Schools can sometimes adjust aid through a process called professional judgment.

It’s free

The FAFSA is free to complete. Only file at the official StudentAid.gov website. Never pay a company to file the FAFSA for you, and be cautious of websites that charge fees or look similar to the official site. Free help is available from StudentAid.gov, school financial aid offices and high school counselors.