Understanding FAFSA

Learn the basics of filling out FAFSA.

College can be expensive. Between tuition, room and board, and books you are looking at an average of about $28,000 a year. Reducing the out-of-pocket expenses you or your family incur is paramount. There are a few ways to offset the cost of a degree, but the first place everyone should start is FAFSA—Free Application for Federal Student Aid.girl writing in her notebook

So what exactly is FAFSA? It’s the first step in a process. This is a program through the federal government, after all. Once you fill out and submit your FAFSA, either online or in paper form, you will get a copy of your Student Aid Report (SAR). Your SAR will include an Expected Family Contribution (EFC). The EFC is used to determine any Federal Pell Grants for which you may be eligible. It is also used by colleges to determine any other federal or nonfederal student aid you may be eligible for. Simple enough, right? Let’s break it down a bit more.

Things to note about FAFSA:

  • Only U.S. citizens or legal resident aliens are eligible for federal aid.
  • If you are male and not registered for Selective Service, you must register on the FAFSA form.
  • Your gender selection should match your Social Security Card.
  • Your parents don’t have to be eligible or have legal status for you to apply.
  • You must include any step-parents’ information if they in away way provide for you financially.

The first thing to know is that you can submit your FAFSA as late as October of the year you plan to attend college. Also, it's a first-come-first-served process. The FAFSA form is primarily used to determine aid. However, some information is shared, mostly to study demographics.

A large amount of FAFSA will deal with tax returns and income for both you and your family. If you haven’t filed your taxes yet for the year, you can estimate the amount and update the information when you do file. Same if you've never filed taxes. Even if you don’t think you are eligible for federal aid because of your family’s income, you should still fill out the FAFSA, it is free.

Determining your dependency status is another huge aspect of the FAFSA.  The Department of Education has a different dependency status than the IRS. This is the part that often frustrates people. A parent’s refusal or unwillingness to help financially is not taken into consideration on your EFC. There are ways to appeal a dependency. However, unless there is a history of abuse, homelessness, or an incarcerated parent, appeals are often turned down. Your EFC will reflect both your and your family’s income along with your dependency status.

Remember that submitting your SAR to a school in no way assures that you’ll get an acceptance letter. Also, it doesn't lock you into any particular choice. Picking a college is a huge decision. The paper form of FAFSA limits you to four choices; online you can select up to ten schools to receive your SAR. This can help make your choice of school easier. Getting an education is important, but it’s not worth racking up piles of debt that you’ll be under for decades to come. You can help avoid that scenario by going through the FAFSA and receiving financial aid.