| Student loans in the U.S. |
| Regulatory framework |
|---|
| National Defense Education Act Higher Education Act of 1965 HEROES Act U.S. Dept. of Education · FAFSA Cost of attendance · Expected Family Contribution |
| Distribution channels |
| Federal Direct Student Loan Program Federal Family Education Loan Program |
| Loan products |
| Perkins · Stafford PLUS · Consolidation Loans Private student loans |
The Free Application for Federal Student Aid (FAFSA) is a form completed by current and prospective college students (undergraduate and graduate) in the United States to determine their eligibility for student financial aid.
The FAFSA is different from CSS Profile (short for "College Scholarship Service Profile"), which is also required by some colleges (primarily private ones). The CSS is a fee-based product of the College Board (a private non-profit organization) and is used by the colleges to distribute their own institutional funds, rather than federal or state funding.
Eligibility
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In order to receive federal student financial aid, students must meet the following criteria:
- have maintained a Satisfactory Academic Progress (SAP);
- be a U.S. citizen, a U.S. national, or an eligible non-citizen;
- have a valid Social Security number;
- have a high school diploma or GED;
- have signed the certification statement stating that: 1) they are not in default on a federal student loan and do not owe money on a federal student grant and 2) federal student aid will only be used for educational purposes;
- have not been found guilty of the sale or possession of illegal drugs while federal aid was being received. (This restriction was removed with the 2024 FAFSA.)
Male students between the ages of 18 and 25 were generally required be registered with the Selective Service System (for Conscription in the United States), but the FAFSA Simplification Act removed this requirement starting with the 2021–2022 school year. The FAFSA Simplification Act was a part of the Consolidated Appropriations Act, 2021.
Students who are military veterans and active duty service members may apply for financial aid by filing a FAFSA even if they also apply for education and housing benefits offered by the Post-9/11 G.I. Bill and its accompanying Yellow Ribbon program. The amount of military aid a student receives for a college education does not defer eligibility or reduce the amount of student aid that student could receive from the four federal grant programs – Pell, SMART, FSEOG, and TEACH – and many of the state student aid programs.
Student Aid and Fiscal Responsibility Act (SAFRA) of 2010 changed the criteria for suspension of eligibility for drug-related offenses. Previously, students could lose eligibility for either the possession or sale of a controlled substance during the period of enrollment. SAFRA dropped the penalties for possession of a controlled substance but retained the penalties for sale of a controlled substance. SAFRA increases the suspension to two years for a first offense and indefinite for a second offense.
Most students who are eligible to receive federal aid and complete the FAFSA will receive some form of financial aid regardless of their financial need.
Preparation and filing options
The FAFSA is made available to the public on October 1 every year for the future academic year.
Since the 2017–2018 academic year, it becomes available on October 1 every year. The US Department of Education made the FAFSA available earlier to more closely align the timing of the financial aid application process with the typical college application process. The FAFSA Deadline Act in 2024 made the October availability date part of the law. The 2016–2017 academic year was the final time the FAFSA was not made available until January 1.
Two-year old US tax information is used to complete the financial sections of the FAFSA beginning with the 2017–2018 academic year. This change in using "prior-prior tax year" information enables families to use the IRS Data Retrieval Tool in the FAFSA to verify their tax information without a delay from the IRS processing tax information. Some financial aid is provided on a first-come, first-served basis, and students are encouraged to submit a FAFSA as soon as possible.
According to the U.S. Department of Education's website, students have three options for filling out the form:
- online at studentaid
.gov (Other websites such as fafsa.com, fafsa.net, may appear to be official but most of these sites charge a fee for assistance) (FAFSA stands for the Free application For Federal Student Aid so no other website should be used other than the official one listed above) - in the myStudentAid mobile app
- Call 1-800-433-3243 to obtain a PDF of the form
The Higher Education Opportunity Act of 2008 authorized fee-based FAFSA preparation. By law, fee-based FAFSA preparation services must on initial contact with students inform them of the free option and be transparent about their non-affiliation with the U.S. Department of Education and their fees.
Application process
Applicants complete the FAFSA by providing their demographic and financial information and, in many cases, the demographic and financial information of their parents/guardians. In addition to this demographic and financial information, applicants can list up to ten schools to receive the results of the application once it is processed. Historically, there was some concern that colleges could deny admission, waitlist applicants, or offer less financial aid as a result of the order in which applicants list schools on the application, or FAFSA position. However, the US Department of Education changed the FAFSA for the 2016–2017 academic year to prevent schools from having access to view other schools that may be listed on the application.
After completing the FAFSA, students are presented with a Student Aid Report (SAR). The SAR provides a student with their potential eligibility for different types of financial aid, their Expected Family Contribution (EFC), and a summary of the data a student provided in the application. An electronic version of the SAR (called an ISIR) is made available to the colleges/universities the student includes on the FAFSA. The ISIR is also sent to state agencies that award need-based aid.
Students can file an appeal with their college financial aid office in order to seek additional financial aid if their current financial situation is no longer the same as the financial information they provided on FAFSA (i.e. their parent recently lost their job). The exact appeal process can vary from school to school. SwiftStudent, a free service, provides template letters for college students to use when appealing their financial aid.
Currently, students can only list ten schools on their FAFSA application. If students are applying to more than 10 colleges or universities, there are three options they can choose from that allow them to submit their FAFSA application to additional schools.
Types of federal financial aid
Federal Student Aid offers several different types of financial aid programs.
- Pell Grant – A grant of up to $6,195 (as of the 2019–2020 Award Year) for students with a low expected family contribution. A 2018 NerdWallet study found that students missed out on $2.6 billion in free federal Pell grants by not completing the FAFSA.
- Federal Supplemental Educational Opportunity Grant (FSEOG) – A grant between $100 – $4,000 for eligible students and the award is available for Undergraduate students. This grant money is limited at colleges and universities and usually is given to those who have completed their FAFSA application early and are eligible to receive this grant.
- Federal Direct Subsidized Loan – Part of the Federal Direct Student Loan Program, Federal Direct Subsidized loans are need-based loans whose interest is paid by the government while the student is enrolled at least half time. Direct Subsidized Loans have fixed interest rates for the life-time of the loan. The interest rates for new loans are set yearly by the U.S. Congress.
- Federal Direct Unsubsidized Loan - Part of the Federal Direct Student Loan Program, Federal Direct Unsubsidized Loans are not need-based, meaning that nearly all students are eligible to receive them. Unlike Federal Direct Subsidized Loans, Direct Unsubsidized Loans accrue interest the moment they are applied to a student's tuition account. Similar to Direct Subsidized Loans, Direct Unsubsidized Loans have fixed interest rates that are set yearly by the U.S. Congress.
- The Federal Work-Study Program – An employment program that encourages students with low expected family contributions to find part-time work while pursuing their studies. The program allows the federal government to subsidize a student's employer by paying around half of the student's wages up to a certain amount. Students do not need to have Federal Work Study to work but some university or non-profit positions may require a student to have Federal Work Study in order to be employed.
History
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FAFSA originally came from the 1965 Higher Education Act (HEA) by President Lyndon Johnson, which established that the United States Government would be the primary provider of financial aid for students. For years the application was called Financial Aid Form (FAF), which was an optional form used by some—but not all—colleges and universities. When Congress reauthorized the HEA in 1992 they created a standardized federal form for all prospective students seeking aid. The stated goal of FAFSA and other government funded education programs was to create equal opportunities for students seeking higher education. When the HEA was reauthorized again in 2008 lawmakers added a clause that schools must report information about who is receiving financial aid. Subsequent studies revealed continued inequality for students of color, who often had to take out more student loans than more privileged counterparts.
Recent updates have been made to increase accessibility of financial aid. The original FAFSA form had 108 questions, which was a significant barrier for many low-income families seeking financial aid. The questions were broadly seen as excessively detailed and unnecessarily complicated, with students being required to dedicate several hours to completing their application. The Consolidated Appropriations Act, 2021 shortened the FAFSA from 108 questions to 36, to encourage more eligible students to fill out the form. In addition, students now have the option to link their IRS account with their FAFSA account to make the application simpler to complete accurately. Students must now report the value of their family business or farm. The Consolidated Appropriations Act also opened financial aid eligibility to students that had previously been excluded from the program.
2024 changes
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In 2024, the Department of Education made substantial changes to FAFSA in response to the FAFSA Simplification Act in 2020. Some of these changes were initially plagued with technical errors and glitches, causing significant delays in the release of data to colleges and universities and considerable confusion and frustration among parents and students. Students from disadvantaged groups and low-income backgrounds are among the vulnerable student demographics who were disproportionately impacted by the technical obstacles. These students might not have access to the tools or assistance they need to deal with the challenges of submitting a financial aid application.
The problems with the FAFSA resulted in a congressional hearing where witnesses reported that the multiple errors and delays in releasing data to colleges and universities could significantly diminish enrollment. Richard Cordray, the Department of Education employee in charge of Federal Student Aid, subsequently announced his resignation at the end of June.
In order to fill out the FAFSA, parents and students must create an FSA ID. Inconsistent personal information caused problems for some individuals surrounding ID verification, including errors in names, addresses, and other information, which has led to delays in the processing of applications for financial assistance.
Students from disadvantaged groups and low-income backgrounds are thought to be disproportionately impacted by the technical obstacles. Many are urging changes to the FAFSA application process in order to resolve these technical issues and guarantee fair access to financial assistance. They contend that students are unfairly burdened by the current system, especially those who already face obstacles to pursuing higher education.
See also
- College admissions in the United States
- CSS Profile
- Edifi
- FAFSA position (only relevant prior to the 2016–2017 academic year)
- Transfer admissions in the United States
References
- "Eligibility for Aid FAQ". Retrieved 2014-03-25.
- "If you want to keep receiving your federal student aid, make sure you stay eligible". studentaid.ed.gov. Retrieved 2016-09-02.
- "Archived copy" (PDF). Office of National Drug Control Policy. Archived (PDF) from the original on 2017-01-23. Retrieved 2015-06-24 – via National Archives.
{{cite web}}: CS1 maint: archived copy as title (link) - ^ Douglas-Gabriel, Danielle (December 31, 2023). "The new FAFSA form for college aid is out. Five things to know". Washington Post.
- "Selective Service | 2021-2022 Federal Student Aid Handbook". fsapartners.ed.gov. Retrieved 2023-01-19.
- "Types of Financial Aid". US Department of Education. Retrieved January 14, 2021.
- ^ Tompor, Susan (August 28, 2016). "Oct. 1 is a new kickoff for FAFSA headaches: What do you do next?". Detroit Free Press. Retrieved January 5, 2017.
- "H.R.8932 - FAFSA Deadline Act". Congress.gov. Retrieved November 21, 2024.
- "FAFSA Filing Options".
- Higher Education Act of 2008 Public Law 110–315—AUG. 14, 2008 122 Stat. 3279–80
- Weston, Liz (November 11, 2013). "Colleges May Penalize Students Over Preference on Financial Aid Applications". Reuters. Retrieved January 12, 2016.
- Rivard, Ry (October 28, 2013). "Using FAFSA Against Students". Inside Higher Ed. Retrieved January 12, 2016.
- "Summary of Changes for the Application Processing System 2016 2017" (PDF). US Department of Education. December 2015. Archived from the original (PDF) on December 11, 2015. Retrieved January 12, 2016.
(see page 3:) "....We have designed a solution for 2016-2017 that allows us to send an ISIR to each school listed on the student's record and only include the Federal School Code of the school receiving the ISIR.."
- "What is the Student Aid Report (SAR)?". US Department of Education. Archived from the original on October 31, 2019. Retrieved January 12, 2016.
- ^ Douglas-Gabriel, Danielle (April 15, 2020). "As colleges brace for financial aid appeals, there's a new tool to help students file them". The Washington Post. Retrieved April 19, 2020.
- ^ Hoover, Eric (2020-04-15). "Financial-Aid Appeals Are Mysterious. This Tool Was Built to Simplify Them". The Chronicle of Higher Education. ISSN 0009-5982. Retrieved 2020-04-19.
- "If I want to apply to more than ten colleges, what should I do?". studentaid.gov. United States Federal Government. Retrieved 2021-01-19.
- "Time is running out to fix America's student-aid mess". The Economist. ISSN 0013-0613. Retrieved 2024-10-04.
- "2015-2016 Federal Pell Grant Payment and Disbursement Schedules". Archived from the original on 2017-05-13. Retrieved 2015-10-27.
- "FAFSA Guide: How to Get Free Money for College".
- ^ "Federal Financial Aid Policy: Then, Now, and in the Future". www.naspa.org. Retrieved 2022-10-16.
- ^ Shermer, Elizabeth Tandy (2021-05-03). "75 years of reforms have failed to fix our college financial aid system". The Washington Post. Retrieved 2022-10-15.
- ^ "FY 2021 Omnibus Appropriations Bill". www.ncsl.org. Retrieved 2022-10-16.
- "Congress Just Made It a Lot Easier to Apply for Financial Aid". 22 December 2020.
- "Why students applying for college financial aid are facing new technical hurdles". PBS NewsHour. 2024-02-18. Retrieved 2024-05-02.
- "Getting to College: FAFSA Challenges for First-Gen Students | Harvard Graduate School of Education". www.gse.harvard.edu. 2024-03-20. Retrieved 2024-05-03.
- Schermele, Zachary; Wong, Alia (April 28, 2024). "Top Education Department official steps down amid crisis over college financial aid". USA Today. Retrieved May 3, 2024.
- "Why students applying for college financial aid are facing new technical hurdles". PBS NewsHour. 2024-02-18. Retrieved 2024-05-07.
External links
- The official government site for the FAFSA
- FAFSA4caster – U.S. Department of Education – FAFSA aid estimating tool
- "The EFC Formula, 2010–2011" (PDF). Archived from the original (PDF) on 2019-01-22. Retrieved 2011-01-22.
