Everything You Should Know About Financial Aid (FAFSA)

June 22, 2020

Sergio Guevara

Head of Client Success at Gradehacker

Updated on February, 2023

Going to college is a lifetime experience, and getting a degree is a fulfilling choice that will change your life.

Nobody warns you about how exhausting the process of getting a college acceptance can be. You’ll be taking entry exams, filling out applications, writing college admission essays, getting recommendation letters, and to that added the worry of “How am I going to pay for everything?”

This is where the Free Application for Federal Student Aid (FAFSA) comes into your life to make it better. Financial aid can be the support you need to pay for your tuition.

In this article, we guide you on how to apply for the FAFSA application you’ve been needing. This will allow you to understand better how financial aid works and feel confident taking that step!

Before getting started, let’s clear up a few relevant details.

What Is FAFSA Exactly?

FAFSA (Free Application for Federal Student Aid) is a resource for students and parents needing financial aid from the government to pay college fees and ease the burden of student and family debt.

The U.S. Department of Education offers aid and federal funding that covers expenses such as tuition and fees, room and board, books, supplies, and other school-related costs.

The best part of all is that it’s all FREE!

What Are The Costs Of College?

According to FAFSA and its fund disbursement, college costs are associated with how much money you must pay yearly for your education. This includes:

But leaves aside:

Of course, the price depends on your specific college, whether it is public or private, and other factors.

For your reference, according to College Board the average cost of attendance at a school year in 2022-2023 is:

Are you finding colleges that are super expensive and have hard-to-meet requirements? Then see which are the colleges with the highest acceptance rate and find relief and know about what colleges are waiting for you!

Approximate College Costs And Fees

Public two-year college:

Public four-year college (in-state fees):

Public four-year colleges (out-of-state fees):

Private non-profit four-year colleges:

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As you can see, the prices just go up each year.

However, Based on the Federal Student Aid 2022-23, the U.S. Department of Education provided about $111.6 billion in federal grants, loans, and work-study funds.

This means that approximately 9.8 million students received some type of financial help to complete their studies.

This is important since, according to Sallie Mae, 73% of students pay for college through funds given by scholarships and grants.

Check out this chart to see how students usually pay for their college fees.

When Can I Start Applying For FAFSA?

You can start submitting your applications for the next academic year:

Beginning: every October 1st.

Till the current deadline: June 30th.

FAFSA opened on October 1, 2021, and will remain open until June 30, 2023.

Stay up to date with deadlines here.

Remember that you have more chances of getting financial aid if you apply sooner.

Why? Funds, grants, and loans are issued on a first-come, first-serve basis. And since FAFSA funds come from a predetermined federal budget, it will reach a time it runs out!

Once it is all disbursed, there is no more financial aid to give. Meaning, if you apply early, you can be eligible for money from federal aid programs.

Some state and school-specific aid programs often have even earlier deadlines, so the sooner you fill out the application, the safer you will be.

An essential piece of information is that you should re-apply every year you’re in school, even if your financial situation hasn’t changed.

You will always need to re-apply to continue receiving aid and to have an opportunity for other programs and funds you may not have had available before.

How Long Does It Take To Finish The FAFSA Application?

For most people, it takes less than an hour to complete and submit a new Free Application for Federal Student Aid.

You can check this information on their website.

How Do I Start The FAFSA Application Process?

The first thing you’ll need to do is to create an FSA ID.

With this ID; you will be able to:

Remember that if you are a dependent student, one of your parents will also need an FSA ID. You can check out how to get your FSA ID here.

What Documents Do I Need For The FAFSA Application?

Before you start the process, be sure you have all the documentation available.

Your Social Security Number
Your Alien Registration number (if you're not a U.S. citizen)
Bank statements and records of investments (if applicable)
Records of untaxed income (if applicable)
An FSA ID to sign electronically
Your federal income tax returns, W-2s, and other records of money earned

You may be able to transfer your federal tax return information into your FAFSA form using the IRS Data Retrieval Tool

If you are a dependent student, then you’ll also need most of the above information for your parent(s).

Who Is Eligible To Receive Federal Student Aid?

The basic eligibility requirements are:

Demonstrate financial need for need-based federal student aid programs
Be a U.S. citizen or an eligible non-citizen
Be enrolled or accepted for enrollment as a regular student in an eligible degree or certificate program
Maintain satisfactory academic progress in college or career school
Show you’re qualified to obtain a college or career school education
Have a valid Social Security Number

With the exception of students from the Republic of the Marshall Islands, Federated States of Micronesia, or the Republic of Palau

You can receive federal aid and state grants.

You should keep in mind that you can be eligible to receive federal aid even if your parents are not U.S. citizens or permanent residents.

Accordingly, FAFSA includes a few questions about the student’s citizenship status.

If you recently became a U.S. citizen, you should contact the Social Security Administration (SSA) to ensure your citizenship status is correctly associated with your Social Security Number.

You Are Considered An Eligible Noncitizen If You Meet One Of The Following Requirements:

1) You are:

2) If your Arrival-Departure Record (I-94), granted by the Department of Homeland Security, shows the designations of:

3) The holder of a valid certification issued by the Department of Health and Human Services showing a classification of Victim of Human Trafficking.

4) Battered Immigrants-Qualified Aliens and their children, as issued by the Violence Against Women Act.

5) A citizen of the Freely Associated States

If you are a Native American student born in Canada with a status under the Jay Treaty of 1789, you may also be eligible for federal student aid.

Are you still doubting about getting financial aid? You should check our video, how to study for free at The University of The People, to find the alternative you’ve been looking for.

Whose Financial Information Should I Use?

You should use your and your parent’s information if you are a dependent student.

You are student dependent if you are under 24 years old by December 31 of the school year, for which you are applying:

Keep In Mind That:

Your parents should provide their info regardless of whether they are helping you pay for college.

A complete application (one with both your and your parents’ info) is more likely to receive financial aid.

If you are an independent student, you should use your information, and if you are married, your spouse’s information,

You are considered independent if you are in any of these situations:

24 years old or older by December 31 of the school year for which you are applying
Attending a degree program, master's, or doctorate
Married or separated but not divorced
Supporting children or dependents of your own
A veteran of the U.S. Armed Forces or currently serving on active duty
An emancipated minor

How Does FAFSA Work?

FAFSA will determine your eligibility for federal and state aid, which includes loans, grants, and work-study positions.

FAFSA will determine the expected family contribution to your education, which varies by school. This information will be shared with the colleges you want to apply to.

Most of the time, students can’t afford the complete cost of college. If you anticipate this deficit, you can use financial aid to cover costs as much as possible.

Once you have created your FSA ID, you must wait one to three days to verify your information. After that, you should receive a confirmation email inviting you to get started with the FAFSA application.

What Happens Next?

1) You will enter your information as you would on a tax form.

The information should include primary data like address, contact info, citizenship status, etc. Also, you will be asked if you have any drug convictions that occurred while you were receiving federal student aid. Saying yes won’t disqualify you.

2) Present your tax returns and bank statements.

You will be asked about the adjustment of gross income, earnings, and assets, like the balance on your savings and checking accounts.

3) If you are a dependent student, this is the time to ask for your parent’s information.

The FAFSA asks for the number of people in your parent’s household and how many plan to attend college at least part-time during the application year.

4) You, or your parents if you are a dependent student, will be asked if you receive benefits from any federal programs.

Note that saying ‘yes’ won’t reduce your eligibility chances.

5) Enter the schools you want your information sent to.

Each school has a federal code.

6) Double-check your information to ensure everything is accurate.

Remember that incorrect information will delay the process of you getting the aid. However, you can always make corrections after signing the application, but saving time is always better.

7) Sign and put the date on your application.

The FSA ID is used to sign the form electronically and is legally binding as a signature.

How Do I Check The Status Of My Application?

You have two options to check:

You can check the status:

Debt is the last kind of pressure you need while studying, that’s why we recommend you to check our video about Student Loan Debt, so you never have to worry about it!

Who Will See My FAFSA Information? How Will They Use It?

After you complete the form, the school you list on your application will receive your information. State and financial aid programs will check your information to know your eligibility for grants, loans, scholarships, and federal aid.

Remember that this is a secure process.

Every time you send personal information, be sure you are on the fafsa.gov website, which is a secure site.

When And How Is Financial Aid Offered?

After submitting the FAFSA, you will be considered for any state and federal aid available. Some states require an additional application, but you can transfer all your information from the federal FAFSA.

You should get a confirmation page after you submit the online form.

You will also receive a Student Aid Report (SAR) anywhere from three days to three weeks after you apply. This document is a summary of the information you used for the form.

After your application is processed, you will get a financial aid offer. This aid is sent out by individual schools that have accepted you. Typically, these offers come in the spring for a fall semester start. Keep an eye out for email communication that will come from each school.

Every school will offer you something different, depending on the school’s factors and requirements for financial aid. So what you are offered by one school may be better than what another school offers.

Sometimes the offer difference can be pretty significant and can go from just a few thousand dollars to double-digit thousands of dollars.

How Does FAFSA Determine How Much Aid I Can Receive?

Financial aid officers will determine your Cost of Attendance (COA) at the school. This includes tuition, fees, and room and board; the costs detailed in the section above about the costs of colleges.

With COA, they use the data you reported on your FAFSA to calculate the Expected Family Contribution (EFC).

The EFC is what federal aid officers expect you and/or your family to pay out-of-pocket for attending school to cover the COA.

This considers the whole picture:

After that, the financial aid office will calculate the need-based aid they should give you.

They use a simple formula:

Cost of Attendance (COA) - Expected Family Contribution (EFC) = Financial Need

They will Subtract your EFC from your COA to determine the amount of your financial need and, therefore, how much need-based aid you can get.

The ‘financial need’ number represents the maximum need-based aid you can receive, including:

How Can I Use The IRS Data Retrieval Tool For My FAFSA Application?

Students and families can save a lot of time using the IRS Data Retrieval Tool to transfer all their tax information to the online FAFSA application.

To use this tool, you should electronically fill out your income tax returns from the prior year two to three weeks before completing the FAFSA. If you filed your tax return via mail, you should wait at least eight weeks before using the tool.

Under the financial information of the FAFSA, you will see a ‘Link to the IRS’ section, where you can click and prefill the form with the prior year’s tax details. When you do this, you will be transferred to the IRS website.

After you transfer the information, you will be sent back to the FAFSA application.

The FSA ID is used to sign the form electronically and is legally binding as a signature.

What You Need To Do If Your Marital Status Changed

This is a possible situation, so here are some tips you can follow:

The FAFSA form asks for the marital status “as of today” (the day it’s filled out). So, if you as a student or a parent were married then but separated in the following year and didn’t file taxes as married, the new spouse’s income must be added to the FAFSA Form.

If the student or parent filed taxes as married but is divorced when filling out the FAFSA form. The spouse’s income will need to be subtracted.

Finally, if the student or parent was married when filing taxes, then divorced, and now married to someone else, you will subtract the ex’s income, then add the new spouse’s income.

Mistakes That You Should Avoid When Completing The FAFSA Application

Don’t miss the deadline. If you miss the end-of-June federal deadline, you can no longer submit that year’s FAFSA form.
Fill out your application carefully and double check everything
The process is entirely free, so avoid going to paid sites. You can go directly to the official government website
Make sure to list the correct household’s financial information
Don’t forget to complete it early on time. The sooner you apply for financial aid, the higher your chances of getting money and other programs
List retirement investments and annuities as investments so your family won't need to register these as assets

Do not miss out on the opportunity to apply for FAFSA.

This type of help is not exclusively for students who can’t afford college since this is also a tool for colleges to know if you qualify for any financial aid, including assistance that’s not need-based.

The Department of Education has a FAFSA worksheet that you can use to familiarize yourself with the required documentation and questions.

How Can I Get More Help To Complete My FAFSA?

You can contact the financial aid office at the college (or colleges) you plan to attend. There, you will receive more in-depth information about your specific aid options. You can also check out the official FAFSA Help website to clarify your doubts.

The Financial Assistance You Need is Waiting for You

Now that you know how to take advantage of this opportunity, you don’t need to feel overwhelmed about this process, it may seem long, but it’s easier than it looks.

That’s why we put together this guide so you can better understand this application process.

But we understand that it can be a little too complicated, and if you need extra help, you can schedule a free 15-minute consultation about your FAFSA application with us.

Please remember that this process is entirely FREE, so watch out for scams of any kind.

Also, remember that Gradehacker is here to help you!

As the non-traditional student most trusted resource, you can experience all the benefits of our study assistance services and make your college journey less stressful than what it should be!

Plus, we offer a ton of information on our website about college help services, degree advice, college finances and more!

If you are interested, we invite you to check our blogs!

Sergio Guevara

Sergio Guevara has been an avid essay writer and researcher for Gradehacker since 2018. He has helped countless non-traditional students with a plethora of subjects like literature, nursing, and history. Now as the head of the Client Success Team he’s constantly involved with SEO-driven content that can make the life of both non-traditional and traditional college students much easier. You can find him on LinkedIn