Compiled and Written By OnlineMBA.com Staff
Last Updated: March 2020
The Free Application for Federal Student Aid (FAFSA) is the form you need to apply for federal grants, work-study funds, subsidized loans, and other forms of federal student aid. Grants are a form of aid that does not need to be repaid, whereas loans must be repaid with interest. Many students may qualify for loan subsidies, meaning the federal government pays interest on the loans while the student remains in school. Even if you do not plan to accept federal aid, you should still complete the FAFSA, because many private grants, institutional aid programs, and scholarship funds need a copy to determine your eligibility for private aid.
Many students may qualify for loan subsidies, meaning the federal government pays interest on the loans while the student remains in school.
Since 1965, the federal government has provided students with financial assistance, and this year alone, it will give $120 billion to help students pay for higher education. The U.S. Department of Education (ED) oversees federal student aid programs and administers the FAFSA, but individual states also offer financial aid programs. Although each state's requirements and offerings are different, almost all require students to complete the FAFSA. Colleges and universities also refer to the FAFSA when distributing scholarship funds, work-study positions, and other institutional aid dollars.
How to Get Financial Aid for MBA Programs
Earning an MBA can be a career changer, but it is also expensive. Federal grants, subsidized loans, work-study programs, scholarships, and loan forgiveness initiatives can help reduce or even eliminate an MBA student's out-of-pocket expenses. To secure most financial aid, you need to complete the FAFSA for MBA programs. The ED, other federal funders, state funding agencies, many private scholarship providers, and individual colleges rely on the FAFSA to help determine a student's eligibility for all forms of public and private aid.
The FAFSA is a single form used for many kinds of federal financial aid, including loans, grants, and work-study awards. Federal loans are funds students borrow and must repay with interest. These loans have an advantage over non-federal loans as they have lower interest rates, tailored repayment plans, and deferred payment options. The U.S. government can also completely forgive loans under the right circumstances as laid out in the loan agreements, and the interest on these loans is sometimes tax deductible.
All financial aid award calculations take into account many variables, including total family income, assets, current year of study, cost of attendance and expected family contribution.
Federal grants are funds given towards a particular purpose with no expected payback. They come with terms and conditions aligned with the purpose of the grant award. Both loans and grants are strictly geared towards educational purposes. They can only aid students by helping them afford tuition, supplies, and room and board.
Federal work study is a part-time work program where the student earns money, usually minimum wage, while studying. All financial aid award calculations take into account many variables, including total family income, assets, current year of study, cost of attendance and expected family contribution (EFC).
EFC is the amount the applicants' family is reasonably expected to pay toward the cost of attendance. It is based on real-time numbers and is time-sensitive.
FAFSA Eligibility Requirements
Most applicants who complete the FAFSA are eligible for some kind of federal financial aid. The U.S. government establishes eligibility requirements but reserves the right to make special exceptions on a case-by-case basis. Typically, applicants must hold U.S. citizenship or be eligible non-citizens, have a valid Social Security number, and complete high school or its equivalent. Male applicants not on active duty must register with Selective Service, and all students must maintain a satisfactory academic record. To trigger the release of funds, students must enroll in a a degree or certificate program. A drug conviction while receiving aid may result in termination of federal funds.
How to Complete the FAFSA
When Should You Submit the FAFSA?
To get the most out of financial aid, timing is key. Stock prices, current debts, retirement accounts and sheltering can all influence asset measurement. Using sharp financial acumen can help you optimize both the level of aid you receive and the interest rates on your loans. Most financial aid services also operate on a first-come, first-served basis, so applicants should submit the FAFSA soon after it becomes available on October 1. Several states even post a deadline of “as soon as possible after October 1” for state aid.
What Information Do You Need to Fill Out the FAFSA?
Completing the FAFSA accurately and quickly means finding and compiling a lot of information before you even get started. First, create an FSA ID so you can have access to federal online systems and use it as your legal signature on the FAFSA. Be sure to have your Social Security number or Alien Registration number number and your driver's license number on hand.
The FAFSA includes more than one financial information section. To complete those sections, you need information from your previous year's tax records, as well as your untaxed income and any assets you may hold, such as stocks, bonds, or rental property. Dependent students need to get their parents to fill out the parental financial information section as well. At the end of the FAFSA, you need to submit a list of up to 10 potential schools to which the ED should send your FAFSA report.
Filling Out Your FAFSA
For the easiest, quickest, and best way to fill out the FAFSA, use the online option. You will see only the questions that apply to you and can check your answers for accuracy. By using the online form, you get your decision faster, too. If necessary, you can download a PDF of the FAFSA. The PDF option is helpful because it saves the data to your PC. You can still request a paper FAFSA if you prefer that approach.
The student status portion of the FAFSA contains questions about legal dependents, a student's age, and marital status.
Several separate sections compose the FAFSA. The first is the student information section, where you answer questions about your address, prior drug convictions, your driver's license number, and the degree you are seeking. In the next section, you answer questions about your income taxes and salaries. If you are married, you also need to include your spouse's information.
The student status portion of the FAFSA contains questions about legal dependents, a student's age, and marital status. In the next section, parents of dependent students answer questions using information on their tax returns, investment statements, and salary stubs. Finally, students answer questions about their household, such as how many family members live in the same house. After filling out the documents, both applicants and parents must send certifying statements to confirm the tax and salary information entered is correct.
Tips for Filling Out Your FAFSA
- Apply Online: The online FAFSA only presents you with relevant questions. It has a built-in app to catch common errors and provides assistance through a pre-application worksheet.
- Use the IRS Data Retrieval Tool: The IRS DRT is accurate and fast. It eliminates the time spent searching for forms or worrying about mistakes. If it is available to you, use it.
- List Your Potential Schools in a Particular Order: It is not necessary to list potential schools in a certain order for federal agencies, but some states require it. Check online to see your state's requirements.
- Fill Out Every Field of the Form: Make sure your FAFSA contains no blank fields. Insert an “o” for any questions that do not apply to you. Incomplete forms can delay decisions about your financial aid.
- Include an Explanatory Letter for Special Circumstances: Applicants who face special circumstances like a recent job loss or high medical bills can attach to their FAFSA a letter of explanation with supporting documentation.
Submitting the FAFSA
How Do You Submit Your FAFSA?
Give the FAFSA application one final review for accuracy before you — and your parents if you are a dependent — electronically sign the form using FSA IDs from FSAID.ed.gov. You may choose to print, sign, and mail the document, but doing so will delay your review. After you sign the FAFSA, you should see a confirmation page pop up. Print this page, and keep it with your records.
Student Aid Report
A Student Aid Report (SAR) is a document containing the basic information about a student's eligibility for financial aid. Applicants receive the SAR after successfully completing the FAFSA. The SAR includes the applicant's basic details, SAR acknowledgement, an application receipt date, the EFC, and the Data Release number. Applicants must verify their SARs. In case of mistakes, applicants can contact their financial aid office, fill in a new FAFSA, or make signed changes and submit it to the relevant body. The applicant and their identified schools each receive a copy. If the SAR indicates an applicant is eligible for verification, it means the applicants is potentially eligible for financial aid.
How and When Do You Get Your FAFSA Funding?
Each student's financial aid package is distinct, so anyone receiving funds needs to contact their school's financial aid office to learn about how their aid will arrive. Some financial aid goes to the student, and some goes directly to the institution. First-time loan recipients have to sign a promissory note as well as attend entrance counseling to learn more about the federal student loan program. No student has to accept a loan, grant, or scholarship simply because a donor extends it to them.
What's the Deadline for Filing the FAFSA?
Universities may set earlier deadlines, but the U.S. government requires you to complete the FAFSA by June 30, 2020 for aid in the 2019-2020 school year.
Do You Need Good Grades to Receive FAFSA Funding?
Most federal funding programs do not take a student's grades into account when determining financial aid. Many schools and private scholarships; however, do consider a student's GPA.
Is There an Age Limit for FAFSA Aid Recipients?
No. Students of any age may apply for federal financial aid using the FAFSA. The U.S. government does not consider age or ethnicity when making decisions about federal financial aid.
Can Your Household Income Automatically Disqualify You from FAFSA Funding?
You can apply for financial aid no matter how much money your family earns. Remember that many schools and private foundations also use the FAFSA to determine eligibility for merit-based aid.
Do Your Parents Have to Be U.S. Citizens for You to Be Eligible for FAFSA Aid?
Your parents' citizenship has no bearing on your qualification for student aid. In fact, the question never appears on the FAFSA. Your parents do not even need to have Social Security numbers.
How Long Does It Take to Fill Out the FAFSA?
It only takes about 30 minutes of work filling in the forms to complete the FAFSA. The process is not as complicated as some people say it is.
Can You File Your FAFSA Before You've Applied to Any Schools?
Absolutely! The schools of your choice open a file for you when they receive the first piece of information whether that is a transcript, an application, or a financial aid document.
Where Can You Find More Information About the FAFSA?
The Department of Education provides a special website, www.fafsa.ed.gov, that offers up-to-date information on the forms, policies, and procedures relevant to the FAFSA.