The Free Application for Federal Student Aid, known as FAFSA is required by any student wanting to apply for Federal Student Aid. FAFSA is not a scholarship, it is the Federal Methodology for determining the amount of Federal Aid a student may be entitled to receive. FAFSA can be filed beginning Oct. 1st; most schools have filing deadlines of Feb. 1st or Mar. 1st and use “Prior-Prior” tax year information. For example, the 2018-19 FAFSA uses 2016 tax return information. The FAFSA must be filed annually.
Once the FAFSA is submitted, the student will receive an Expected Family Contribution (EFC) which represents the amount that the family is expected to pay for college based upon its’ income and assets. The amount of the deficit between Cost of Attendance (COA) and EFC is the demonstrated need. It is IMPORTANT to know that colleges are under no obligation to meet demonstrated need by way of grants or gift aid. Most colleges (especially public institutions) will meet need with Parent PLUS loans. BEWARE – PLUS loans have initiation fees, high interest rates, and can be quite costly over the long term.
All schools require the FAFSA in order to receive any Federal Student Aid. In addition, there are about 200 mostly private schools that require a supplemental financial aid form called the CSS Profile. This form is considered the Institutional Methodology used to determine the amount of grant aid a CSS Profile school will award from its’ endowment. Gift aid from a school is separate from Federal Student Aid.
There are various forms of Federal Student Aid including:
- Federal Student Loans, also known as Stafford Loans (Subsidized and Unsubsidized) – Federal Student Loans are issued in the name of the student and do not require a cosigner. Repayment is deferred until 6 months after the student is no longer enrolled in undergraduate, graduate, or professional school. Interest rates on Federal Student Loans are currently 4.45%, but the rate varies from year to year. If the student qualifies for a subsidized loan, the government pays the interest which accrues while the student is still in college. If the loan is unsubsidized, interest accrues from the time the loan is taken. Whether or not a student qualifies for a subsidized loan depends upon the parental income and assets. The maximum amount of Federal Student Loans (combination of both subsidized and unsubsidized) that can be taken out each year is $5,500 for freshmen, $6,500 for sophomores, and $7,500 for juniors/seniors.
- Federal Work Study (FWS) – This aid comes in the form of employment on campus. Federal Work Study amounts vary, but generally range from $2,000-$3,000 per year. FWS “salary” is paid directly to the Bursar’s office and offsets the student’s tuition.
- PELL Grants – These are grants available to families with income below roughly $60,000 annually. The maximum PELL grant amount is $5,920.
- Federal Supplemental Education Opportunity Grant (FSEOG) – These are additional grants that can be awarded to students with exceptional need. Only some schools participate in the FSEOG program, and the student must be PELL grant eligible in order to get an FSEOG.
In addition, schools may offer various types of grants based upon a student’s need. For example, in California, students attending a California school with a family income falling below certain thresholds (generally around $90,000 but varies depending upon age of parents, other assets, family size, etc.) may be entitled to a Cal Grant. Cal Grants range from $5,752 at CSU’s, to $12,630 at UC’s, and $9,084 at private colleges. In order to receive a Cal Grant, the student must file a FAFSA, have a 3.0 high school GPA and the student’s school must submit a Cal Grant Verification Form by March 2.
Colleges may also offer need based scholarships (institutional grants in addition to the Federal Student Aid described above) to worthy students. In general, colleges are more generous with need based aid to their own in-state students, however, available grant money varies greatly from school to school.
FAFSA must be filed by any student seeking need based financial aid. In addition, if the student is applying to a school requiring the CSS Profile, that form must be completed in addition to the FAFSA.
One additional note: if your student is selected for “Verification”, additional documents may be required, such as tax returns, W2’s, etc. It is important that the student review his or her portals and incoming emails in order to respond to requests for information.
Most schools also offer Merit Scholarships based on academic performance, test scores, athletics, and/or talent. Almost all merit scholarships are based solely upon merit, however, there are a few schools that require FAFSA prior to awarding a merit based scholarship. This is the exception, not the rule.
- FAFSA is the Federal Methodology for determining financial need
- FAFSA is not a scholarship
- FAFSA is used to determine the amount of Federal Student Aid
- FAFSA is used by schools in determining institutional need based aid to be awarded
- FAFSA is generally not required for merit based scholarships, but there are a few schools requiring FAFSA for merit awards
- FAFSA must be filed annually
Stay Tuned: Look for FAFSA workshops at TCS beginning in October 2018! The workshops will be free; everyone is welcome to attend!