Understanding FAFSA and Financial Aid

Wiener Douyon, CollegeFindMe Intern

What is FAFSA?

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, it can be the most important. So let’s dive in!


FAFSA allows U.S college applicants to be eligible with different types of financial aid, including grants, scholarships, work-study, federal loans, and private loans. We’ll help you understand these categories below.


  • No repayment required
  • Offered by the federal and state government, along with some institutions
  • May be merit-based, need-based or student-specific*
  • Can be highly competitive
  • The most common grant is the Pell Grant

*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, such as a video

Work Study Program

  • Earn money that helps you pay for school through work
  • Schools provide students with federally funded jobs on campus or at other approved locations
  • Libraries, campus centers, administrative offices, dining halls, and residence halls tend to employ work study students
  • The positions available and the pay offered to vary widely depending on the school

Federal Loans

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 a bit better than unsubsidized student loans, since the government pays the interest while the student is in college (and 6 months after graduation)
  • Unsubsidized Loans– Available to all students regardless of need. Students are responsible for repaying interest during all periods.

Private Loans

  • 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. When applying for financial aid, be thorough in your research before signing up for loans, and look for as many scholarships and grants as possible, since you don’t need to pay them back. You can check out some great scholarships offered by CollegeFindMe and our partners here. 

Preparing 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 are 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 receive your package earlier than most.

Remember: While it’s important to reach for the stars, don’t burden yourself with debt if you can avoid it. There are many colleges that are more affordable and fitting to your needs than top-tier institutions that charge two or three times more than other colleges. What’s really important is your work ethic and your ability to network within any college you go to. You are amazing, so don’t think that you need to go into an insurmountable debt in order to be successful. You’re destined to be successful no matter the college you go to!