The Free Application for Federal Student Aid (known as the FAFSA) is a form that can be prepared annually by current and prospective college students (undergraduate and graduate) in the United States to determine their eligibility for student financial aid.
Federal Student Aid offers several different types of financial aid. The most common types of aid students are offered from the federal government as a result of completing a FAFSA are:
Pell Grant – A grant of up to $5,815 (as of the 2016-17 Award Year) for students with a low expected family contribution. Unlike a loan, a Pell Grant does not have to be repaid and are awarded to undergraduate students who have not earned a bachelor’s or a professional degree. The amount of the award can depend on financial need, the cost of attendance and full-time status.
Stafford Loan – As of July 1, 2014, any Federal Direct subsidized loan will have a fixed interest rate of 4.66% and the interest is paid by the government while the student is enrolled at least half time. The Federal Direct unsubsidized loan also has a fixed interest rate of 4.66% and accumulates onto the outstanding balance.
The Federal Work-Study Program – A program where students can get part-time work, up to a certain amount. In most cases, the federal government pays half of a student’s wage and the school pays the other half.
In Sept. 2015, President Obama announced significant changes to the FAFSA process that would impact millions of students. Students are now able to do the following:
Submit a FAFSA® Earlier: Students will be able to file a 2017–18 FAFSA as early as Oct. 1, 2016, rather than waiting until 2017. The earlier submission date will be a permanent change, enabling students to complete and submit a FAFSA as early as October 1 every year.
Use Earlier Income Information: Beginning with the 2017–18 FAFSA, students will report income information from an earlier tax year. For example, on the 2017–18 FAFSA, students (and parents, as appropriate) will report their 2015 income information, rather than their 2016 income information. And you may ask, who is considered your parent for FAFSA? Here’s that answer.