Did you know that the average college tuition in the United States is $9,349 for in-state students and $27,023 for out-of-state students? Yup, it’s true — the cost of attendance can be expensive, to say the least.
Thankfully, for those who aren’t able to afford the price of a college education, FAFSA is available. What is FAFSA, you ask? This guide will tell you everything that you need to know.
What Is the Definition of FAFSA?
The acronym FAFSA stands for the Free Application for Federal Student Aid and refers to the official form an individual needs to fill out in order to apply for federal financial aid to pay for college. It’s also used by many states, colleges, and universities in making their financial aid decisions.
According to the Federal Student Aid Report (SAR), the United States Department of Education awards roughly $116 billion in federal grants, loans, and work-study funds. The U.S. Department of Education reports that federal funds provide aid to roughly around 11 million students in completing their education.
What Is the History of FAFSA?
In 1958, the National Defense Student Loan program was created as a result of the National Defense Education Act (aka the Federal Perkins loan program).
This program distributed federal loans to students through the institution they were attending. In other words, a student only qualified for the program if the college could match the federal aid provided. The National Defense Student Loan program was the first of its kind and paved the way for FAFSA.
In 1965, President Lyndon Johnson signed into law the Higher Education Act of 1965 and established the U.S. federal government as the primary provider of financial aid. There had been no public and private partnership like this ever before, and it helped expand student loan access tenfold, giving more students access to higher education in the process.
Over a decade later, significant changes in federal financial aid policy started with the Middle Income Student Assistance Act of 1978, which opened eligibility for subsidized loans to all undergraduates — regardless of financial need. It also expanded eligibility for Pell Grants to middle-income students.
Today, outstanding student loan debt in the United States sits at a whopping $1.6 trillion.
Who Qualifies for FAFSA?
There isn’t an income cut-off to qualify for federal student aid. To be eligible for financial aid, you will need to:
- Have a high school education with proof of a diploma or a recognized equivalency (like a GED)
- Be a U.S. citizen or an eligible non-citizen with U.S. national status, or a green card
- Have a valid Social Security Number (SSN)
- Be accepted (or enrolled) for enrollment in an eligible degree or certificate program
- Maintain satisfactory academic progress in college
What Do You Need to Submit for a FAFSA Application?
Want to apply for FAFSA to receive federal financial aid? You’ll need quite a few documents ready to complete the FAFSA form and qualify for aid.
If you’re an independent student, some of the documents that will be required include:
- Social Security Number (SSN) or Alien Registration Number
- Federal income tax returns, W-2s, and other tax information or records of money earned
- Bank statements
- Records of untaxed income (if applicable)
- An FSA ID to sign electronically
Note: Dependent students may need additional financial information from their parents.
What Are the Various Types of Financial Aid?
The federal government is the primary provider of student financial aid, but you can also access aid from state governments as well as other private organizations. With this in mind, let’s take a look at some of the various types of financial aid offered in the United States:
- Grants — a form of financial aid that doesn’t have to be repaid.
- Federal Grants — after filling out the form for FAFSA, you will automatically be considered for this type of aid.
- State Grants — funding provided by a state spending unit to a person upon application for higher education.
- Scholarships — a type of free money offered by nonprofit and private organizations to help students pay for college or career school.
- Work-Study — the Federal Work-Study Program (FWSP) allows students to earn money to pay for school by working part-time.
- Loans — another type of financial aid, student loans provide students (or aspiring college students) with money that needs to be repaid with a certain amount of interest over a set term. Types of loans include direct subsidized loans, direct unsubsidized loans, and Direct PLUS loans.
- Aid for Military Families — special aid programs for those serving in the military as well as the spouse or child of a veteran.
- Aid for International Study — this type of aid is available for students studying at a school outside the United States
Related Words You Should Know
Before we wrap up this article, we want to leave you with a few related terms that you’ll likely come across as you continue your research of FAFSA. Research each word below:
- Expected Family Contribution (EFC)
- Award Year
- Cost of Attendance (COA)
- Unsubsidized Loans
- College Scholarship Service Profile (CSS Profile)
- Community College
- The IRS Data Retrieval Tool (IRS DRT)
- Federal Pell Grant
FAFSA is an acronym for “Free Application for Federal Student Aid” and refers to the form students are required to fill out if they need financial aid from the federal government to help pay for college.
Need help obtaining financial aid, filling out the FAFSA application, or applying for federal student loans? Go to your financial aid office, where you can speak to a counselor about college financial aid for the academic year.