Going to college or graduate school is a serious investment in your future—both professionally and financially. Naturally, you’ll want to know how much financial aid you’re eligible for. You’ll want to explore student loans, grants, and work-study programs.
Understanding how to complete the FAFSA®—Free Application for Federal Student Aid—is the first step.
The amount of federal aid that prospective and current students receive is based on a variety of factors. Everyone’s financial situation is unique, but taking a look at the following requirements, factors, and questions can help paint a clearer picture of how much FAFSA® money you will get.
What Are the Eligibility Requirements?
Many incoming and current college and graduate students are eligible to apply for federal aid. Before getting into the weeds of financial need, students must satisfy the following criteria to apply:
• Be a U.S. citizen, national, or eligible noncitizen
• Have a valid Social Security number, unless you’re from the Federated States of Micronesia, Republic of the Marshall Islands, or the Republic of Palau
• Have a high school diploma or GED
• If a male ages 18 to 25, be registered with the Selective Service System
• Promise to use awarded federal aid only for education purposes
• Have not been found guilty of owning or selling illegal drugs while receiving financial aid
• Do not owe refunds on any federal student grants
How Do I Begin the FAFSA®?
The first step is creating your FSA user ID and password. From there, you fill out a series of questions covering demographic information, schools you are interested in attending, financial details, and information from parents or guardians based on dependency status.
Filling out the FAFSA® may feel intimidating, but preparing ahead of time can save you from common FAFSA® mistakes, like leaving items blank or procrastinating.
What Factors Affect FAFSA® Money?
The application includes questions about demographic and financial information for students and sometimes their families to answer. Collectively, this information will determine how much need-based and non-need-based aid students qualify for.
Applying for the FAFSA® Every Year of School and on Time
Filling out the FAFSA® is not a one-time deal. Students can file the FAFSA® each year they are enrolled in college or graduate school. Yet approximately 40% of high school seniors do not fill out the FAFSA®, and a quarter of college and graduate students do not renew their application after their first year of studies.
There are several important FAFSA® deadlines to be aware of so that you can apply for financial aid on time. The federal deadline for the 2020-2021 academic year is June 30, 2021, though updates or corrections can be made as late as September 11, 2021.
State deadlines vary, and many precede the federal deadline by one or several months. Applying early can increase your chance of receiving additional financial aid from your home state in the form of grants or scholarships.
Dependency Status
An applicant’s dependency status is determined by 10 questions . Even if your parents claim you as a dependent for tax purposes, you may still qualify as an independent for federal financial aid. You most likely qualify for independent status if you meet any of the following when filling out the FAFSA®:
• At least 24 years old
• Married
• A graduate or professional student (law, medicine, etc.)
• A veteran or active member of the armed forces
• An orphan, ward of the court, or emancipated minor
• Claiming legal dependents other than a spouse
• Homeless or at risk of becoming homeless
Your dependency status affects how much financial aid you’re eligible to receive. In many cases, independent students can be eligible for more financial aid, as they are assumed to be paying their own tuition and living expenses.
Still, dependent students may be eligible for a variety of financial aid opportunities from federal or state governments and colleges through the FAFSA®. Most incoming and current undergraduate students are considered dependent. This means that information from parents or guardians, such as tax returns, will be submitted and will affect if financial aid is awarded and how much.
In special circumstances, students may file for a dependency override. These are awarded case by case, and are typically reserved for students facing exceptional family-related issues or whose parents are unwilling to provide information for the FAFSA®.
Expected Family Contribution
Expected Family Contribution, or EFC, primarily applies to dependent students. The EFC calculates eligibility and aid based on several financial and demographic indicators, including:
• A family’s taxed and untaxed income
• A family’s assets and benefits (unemployment and Social Security, for example)
• Family size and number of dependents enrolled in or likely to attend college
This calculation determines need-based and non-need-based aid eligibility and amount, rather than a figure a family is expected to pay toward education. Typically, a lower EFC translates to greater financial aid eligibility as a result of higher need.
Cost of Attendance
Education costs can vary considerably based on merit-based scholarships, in-state vs. out-of-state residency, and other factors. The amount of FAFSA® money you receive will also depend on the cost of attendance for your chosen college or university.
The cost of attendance encompasses tuition, fees, room and board, books and school supplies, and expenses associated with child care or disabilities, if applicable. A lower cost of attendance usually translates to less aid, because the funding can be used only for education purposes.
How Much Money Will I Get From FAFSA®?
The amount of FAFSA® money you receive cannot exceed the cost of attendance for your chosen college or university.
Before applying, the FAFSA4caster is a useful tool to estimate the amount of federal student aid you qualify for.
Assuming that you meet the eligibility criteria and are applying on time, you may receive some form of federal financial aid, especially if your EFC is less than your cost of attendance. Potential sources of federal student aid include the following programs:
Grants
Unlike loans, grants are free money to put toward your education that does not have to be paid back. After completing the FAFSA®, students with proven financial need may receive aid in the form of a Federal Supplemental Educational Opportunity Grant or Pell Grant. Opportunity grants range from $100 to $4,000 and are allocated based on need, other aid awarded, and college budgets. Pell Grants change annually but can be as high as $6,345 for the 2020-2021 academic year.
Work-Study
Federal work-study programs typically involve a part-time job on or off campus. Wages are subject to the college but must meet minimum-wage requirements. Work-study schedules are intended to be structured around students’ classes.
Federal Loans
Eligibility for federal student loans is generally broader than for grants and work-study programs. Federal loans are either subsidized or unsubsidized. Subsidized loans are need-based and include interest deferment and grace periods. On the other hand, unsubsidized loans begin accruing interest once they are paid out to borrowers.
All federal loans have an origination fee but generally have a lower interest rate.
Different types of federal student loans exist, and each has a maximum amount according to dependency status and year of study. Generally speaking, students are able to take out larger subsidized and unsubsidized loans from freshman to sophomore year, and from sophomore year to junior and senior year.
It’s worth noting that dependent undergraduate students have an aggregate loan limit of $31,000. Independent undergraduates can take out $57,500, and graduate students can borrow up to $138,500.
How Else Can I Pay for College?
If financial aid isn’t enough to cover your tuition and other education expenses, there are ways to make college more affordable.
Scholarships and Grants
Besides scholarships granted by your chosen college, there are opportunities offered by private foundations, community groups, and nonprofit organizations. Awards can be given based on academic merit, need, field of study, or participation in a specific sport or activity.
Try to stay on top of scholarship and grant applications and deadlines as they can come and go quickly. Winning a scholarship or a grant is basically finding free money, and you don’t want that money to go unclaimed.
Private Student Loans
Students who cannot pay for college with scholarships and federal aid alone can apply for private student loans from various lenders, including banks, financial institutions, and credit unions. Interest rates, forbearance, and other terms and conditions can vary, so consider doing some research.
SoFi’s no-fee private student loans are an option for students to help pay for college and graduate school. Flexible repayment plans can ease the search for a loan that works with a student’s budget and financial plan.
