Understanding FAFSA® and How to Apply for Federal Student Aid

Understanding FAFSA® and How to Apply for Federal Student Aid image 1 (name IMG Understanding FAFSA┬ and How to Apply for Federal Student Aid 1)

College Prep

Published February 9, 2024

The Free Application for Federal Student Aid (FAFSA®) is a form you’ll need to fill out to determine eligibility for financial aid, including grants, loans, and work-study programs. The FAFSA® is free to fill out and is available to students who plan to attend an eligible institution of higher education.

It’s important to note that you can fill out the FAFSA® starting October 1 of the year before you plan to attend college. It’s processed on a rolling basis, so you should file it as early as possible.

However, before filling out the FAFSA®, you’ll need to create an FSA ID to access and electronically sign your form and loan documents. Once you get started, you will be asked to provide personal and financial information for you and your family, which is used to determine how much financial aid you are eligible for.

How Eligibility and Award Amount Are Determined 

Your eligibility for federal student aid depends on several factors, starting with financial need. The information you provide on the FAFSA® is used to calculate your Expected Family Contribution (EFC)—a measure of how much you and your family can afford to contribute to your education based on the following:

  • Dependency status: You will indicate your dependency status on the FAFSA® form. If you are a dependent student, you will report your and your parents’ information. If you’re independent, you will report your information as well as your spouse’s, if you are married.
  • Marital status: The FAFSA® asks for marital status as of the day you fill out the form for yourself and your parents (if you’re a dependent student). This determines whether a spouse’s income will be included in your EFC.
  • Income: Your taxed and untaxed income and benefits are calculated in your EFC. If you are a dependent student, this includes your parents’ income and your own.
  • Asset net worth: The FAFSA® collects information on the current value of your assets, excluding what you owe, and calculates them into your EFC. This includes money in checking and savings accounts, investments, businesses, and real estate, excluding the home you live in. 
  • Family size: If you’re a dependent student, your household size includes your parents, yourself, and their other children, who receive more than half of their support from your parents. It also includes other individuals who are not your parents’ children but who live with and receive more than half of their support from them. If you’re an independent student, your household size includes you and if applicable, your spouse and your children, who receive more than half of their support from you. Individuals who are not your children but live with and receive more than half of their support from you are also included.

If you are eligible for federal student aid, the amount of aid you receive will be based on your EFC. The lower your EFC, the more aid you will receive. In addition to financial need, you must meet other basic eligibility requirements:

  • Be a U.S. citizen or eligible noncitizen (However, don’t assume you can’t get aid if you’re not a citizen. Many non-U.S. citizens qualify for student aid).
  • Have a valid Social Security number (SSN), with some exceptions.
  • Be enrolled or accepted in an eligible degree or certificate-granting program.
  • Meet additional eligibility requirements.

Five Steps to Receiving Financial Aid

To get started, gather the required information, such as your SSN, federal income tax return, W-2 forms, bank statements, and alien registration number, if you are an eligible noncitizen. Once you have collected this information, you are ready to follow these steps to complete your FAFSA®:  

  1. Create an FSA ID. Your FSA ID allows you to access and sign your FAFSA® form and loan contracts electronically. You should not share this unique and secure digital signature with anyone.
  2. Fill out the FAFSA®. Answer all questions on the form accurately and completely. If you need help, reach out to your school’s guidance counselor or the Federal Student Aid Information Center. 
  3. Submit the FAFSA®. Some colleges have a priority deadline for financial aid, and because the FAFSA® is processed on a rolling basis, it’s important to submit your form as soon as possible. 
  4. Follow up with colleges. Once you’ve submitted the FAFSA®, the colleges you listed on your form will use the information to determine your financial aid eligibility. Check with each college you’ve applied to for any additional financial aid requirements or application procedures. 
  5. Renew the FAFSA® annually. You’ll need to renew the FAFSA® each year you’re in college to continue receiving financial aid. Keep track of deadlines and be sure to submit your form on time each year.

If you’re planning to attend college, start gathering the necessary information you need for the FAFSA® early so you can submit your form as quickly as possible. For some insight into how much financial aid you may expect to receive, check out the Federal Student Aid Forecaster. This tool helps estimate your eligibility for federal student aid. And remember, your education is a worthwhile investment in your future. Take advantage of the student aid available and start preparing for your academic future today.