By Wiener Douyon, CollegeFindMe Intern
The Free Application for Federal Student Aid, FAFSA is the certified report of your family’s financial standings. Each college applicant receives their FAFSA after submitting documents such as W2 forms and recent tax returns. FAFSA is the financial side of the college application process, and for many- the most important. Besides, it’s money we are talking about! Let’s dive in!
FAFSA allows U.S college applicants to be eligible with different types of financial aid. Types include grants, scholarships, work-study, federal loans, or private loans. Applicants need to submit this report in order to be eligible for any aid!
Descriptions, along with links, of these forms of financial aid are below:
- No repayment required
- Offered by the federal and state government, along with some institutions
- May be merit-based, need-based or student-specific*
- Fierce and highly competitive
- The Pell Grant is most sought out
*Many student-specific grants are for minorities, women, and students with disabilities.
- No repayment required
- Offered by individual institutions and private organizations
- Awarded based on a number of factors, such as academic performance, athletic ability, religious affiliation, and race, among others
- Most require an essay or some sort of task to be completed (video, etc.)
Work Study Program
- You can earn money that helps you pay for school through work; provide students with federally funded jobs on campus or at other approved locations
- The student center, career center, athletic department, and residence halls, employ work-study students
- The positions available and the pay offered to vary widely depending on the school
There are two types of federal loans that the government offers to applicants: subsidized and unsubsidized.
- Subsidized Loans– Available for students who have demonstrated financial need. Terms are bit better than unsubsidized student loans, due to not paying interest while in college (and 6 months after graduation). The government pays for such interest so rate theoretically doesn’t matter.
- Unsubsidized Loans– Available to all students regardless of need. Students are responsible for repaying interest during all periods.
- Granted by private banks
- Help to bridge the gap between the cost of your education and the amount of financial aid you receive from the government (loans, grants, work-study).
- Eligibility for private loans often depends on your credit score
- Tend to have higher interest rates than federal loans
Loans, specifically private loans, are the causes of extreme student debt for many adults today. It is vital to avoid this option by planning to apply for as many scholarships as you can! They are free money, and you will be in a better position than those are not seizing these opportunities.
How to prepare for FAFSA?
This is the dawn of one of your biggest financial moves that you will take in your lifetime. Similar to mortgages and car loans, there is a lot of aspects that students need to keep in mind before making any decisions. At the moment, the best way to prepare is to gather all the resources and forms needed to fill out your FAFSA. That way, you can fill out right when the finance department opens (October 1st) and will receive your package earlier than most.
Remember: While it’s important to reach for the stars, don’t go hurting yourself trying to leave the atmosphere! There are many colleges that are more affordable and fitting of your needs than the renowned schools. What’s really important is your work ethic and your ability to network within any college you go to. You are amazing so do not think that you need to go into an insurmountable debt in order to be successful. You were destined to be successful no matter the college you go to!