Financial aid is money to help pay for college or career school. Grants, study and work, loans and scholarships help make college or career school affordable. A variety of sources of financial aid are available to help you pay for college or career school. Students could lose free scholarship and grant money if the free application for federal student aid is not completed and submitted.
Why? The reason is that, while the title of the application implies that the results are only used for federal student aid, the schools that students request receive data from the form often use the information to determine if the student will receive funding from the university itself. Not filling out the form is basically telling schools: “Please don't give me money”. Everyone who goes to college and their parents should know how the Free Application for Federal Student Aid (FAFSA) process works. Some may dismiss the idea of applying for financial aid for college because they think they make too much money to qualify.
However, regardless of your household income, you may be eligible for some form of financial assistance, including federal, state and school aid and merit-based scholarships. In fact, it makes sense for almost every family with a child who goes to college to fill out the FAFSA. The primary purpose of the FAFSA is to determine how much financial aid a student qualifies for, including need-based and non-need-based aid. It determines eligibility for federal need-based grants, including the Pell Grant and Federal Supplemental Grants for Educational Opportunity (FSEOG); federal subsidized student loans, which are need-based; federal unsubsidized student loans, which most students qualify regardless of need; federal work and study; state financial aid, including grants, scholarships, and loans; school-based financial aid, including need-based grants and scholarships; and school-based merit aid (since many schools require that the FAFSA be filed early that any grant of aid be distributed).
To determine a family's financial need, the FAFSA asks a series of questions about the income and assets of parents and students, as well as other factors, such as how many children are in the family. An Expected Family Contribution (EFC) is then submitted. The FAFSA is the official form that students or their families use to apply for financial assistance from the federal government for college. States, individual colleges and universities, and private scholarship programs are also based on information provided in the application.
In terms of assets, the FAFSA assumes that 20% of a student's assets and 5.64% of a parent's assets must be available to spend in any college year. These assets include bank accounts and investments, but exclude the value of retirement accounts, life insurance policies and annuities. Any capital gains in the family home are also excluded. The information you provide on the FAFSA determines if you qualify for need-based help, non-need-based help, or some combination of the two.
If you are not ready to fill out the FAFSA itself, you can get an estimate of your EFC and the likelihood of receiving financial aid from the Department of Education's Federal Student Aid Estimator office. Here are some of the programs that require filling out the FAFSA: The federal work-study program makes available paid part-time jobs through participating colleges and universities. Both undergraduate and graduate students may be eligible. Federal loans, whether subsidized or unsubsidized, tend to be less expensive than private loans and have more flexible repayment options.
These loans are intended for parents or graduate students. They are not subsidized by the government, so interest accrued during college years will be added to the principal if not paid while the student is in school. The FAFSA application is not a loan; it is simply an application that you complete to determine your eligibility for a federal loan. There are three main types of financial aid that a student may be considered eligible for after completing a FAFSA application: part of this money is free money, part must be earned from work and part must be reimbursed.
The more general eligibility requirements to qualify for various forms of federal student aid include being a U. S eligible citizen or alien and being enrolled in an eligible degree or certificate program at a college or career school. However, there are more eligibility requirements you must meet to qualify for federal student aid and these requirements are specific depending on the type of aid. Most students are eligible for some form of financial aid from the federal government to help pay for college or career school; age, race or field of study are not taken into account when determining eligibility.
Most families regardless of how much they earn or have accumulated in assets will find it helpful to fill out the FAFSA. If it turns out that they are not eligible for free money in the form of grants or scholarships they may still be eligible for non-need-based aid in the form of direct loans without subsidy from the federal government.
Federal student loans tend tohave more favorable terms than loans from private lenders and offer a variety of flexible repayment options. Wondering how much your federal student aid will be? Federal Student Aid can help you calculate your net worth investments as well as your expected family contribution (EFC).
Federal Pell Grants are generally awarded only to undergraduate students while Federal Supplemental Educational Opportunity Grants (FSEOG) are awarded to undergraduate students with exceptional financial need. The Department of Education offers low-interest loans to eligible students to help cover college costs as well as Federal Work Study jobs which allow students to earn money towards their education expenses. Receive a TEACH grant to pay for college too! Types of Financial Aid include any college funding that doesn't come from savings or family contributions.