FAFSA: How to Finance College

The cost of higher education can be extremely discouraging. According to the Education Data Initiative, the average cost of college has risen 141 percent over the last 20 years and continues to increase each year. At first glance (and maybe second and third), financing college seems impossible. But by taking time to understand the options available and taking proactive steps, you can significantly reduce the financial strain on your family.

What is FAFSA?

The Federal Application for Student Aid (FAFSA) is a critical tool for students seeking financial assistance for college. It is a form used by the U.S. Department of Education to determine eligibility for federal financial aid, including grants, work-study programs, and loans.

How Does FAFSA Work?

FAFSA is the first step in unlocking federal financial aid. By submitting this form, students provide information about their family’s financial situation, including income, household size, and other relevant data. Based on this information, the government determines a student’s Expected Family Contribution (EFC). This amount is how much the government expects the student and/or their family to contribute to the cost of tuition.

FAFSA eligibility also unlocks a variety of financial aid opportunities.

• Grants: These are typically need-based and do not need to be repaid. The Pell Grant is one of the most well-known, aimed at students from low-income families.
• Work-study: This program provides part-time jobs for students with financial need, allowing them to earn money to help pay for school-related expenses.
• Loans: There are two kinds of federal student loans.

• • Subsidized loans: These loans are based on financial need, and the government pays the interest while you’re in school.
  • Unsubsidized loans: These are not need-based, and the borrower is responsible for the entirety of the accrued interest

Who Can Apply for FAFSA?

Every student can (and should!) apply for FAFSA. A common misconception is that only students from low-income families should apply for FAFSA. In reality, the FAFSA is available to almost all students regardless of their family’s income level. Even students whose families may not qualify for large amounts of aid may still be eligible for loans or other assistance.

When and How to Apply

The FAFSA opens each year on October 1 on the official website, fafsa.gov. It’s important to apply as early as possible, as some financial aid programs are awarded on a first-come, first-served basis. Deadlines vary by state and school, but the federal deadline is typically in June. The process will require you to provide financial details from tax returns and other documents like your social security card.

After Submitting

Once the FAFSA is submitted, colleges use the information to determine how much aid the student qualifies for and create an award letter. This award letter will detail any grants, loans, or work-study opportunities the student has been offered.

Common FAFSA Mistakes to Avoid

• Missing deadlines: Missing the FAFSA submission deadline can mean missing out on crucial financial aid opportunities.
• Incorrect or incomplete information: Always double-check the form for financial data and personal details to avoid mistakes that could delay processing.
• Omitting parental financial information: As a dependent student, failing to include parents’ financial information can cause the application to be rejected.
• Not reapplying every year: FAFSA is not a one-time process. The form must be submitted every year to continue receiving financial aid.

Additional Funding Beyond FAFSA

FAFSA is not the only way to finance college. There are multiple forms of financial assistance available, including scholarships, state-based programs (like the Alabama Student Assistance Program), and private loans.

The FAFSA is a powerful tool in unlocking financial aid for your student. Consider it the magic key to college financing. Remember, the process may seem daunting at first, but the financial opportunities are worth the effort.