What is FAFSA? Your essential 2024 guide to federal student aid

The FAFSA (Free Application for Federal Student Aid) determines a student’s eligibility for financial aid to support their college education. Completing the FAFSA could lead to access to grants, loans, and work-study programs, easing the financial burden of higher education. 

This article explains the ins and outs of FAFSA, providing guidelines on the filing process and timelines to maximize the aid you can receive.

What is FAFSA, and how does it work?

The FAFSA is the primary tool used to determine eligibility for various types of financial aid, from need-based to non-need-based. The financial aid application process usually begins with the FAFSA, which students can start filing on October 1 of the preceding calendar year of their enrollment. Since this application is integral in allocating federal student aid across all schools, it’s important not to disregard it.

Submitting the federal student aid FAFSA enables you to apply for a range of federal financial aid options like grants, loans, and work-study funding. And the best part? The FAFSA form is free to file, so beware of any websites that ask you for payment to fill out the form.

All of these options can greatly help reduce your college education costs. But that’s not all. Filling out the FAFSA can also be advantageous for college admissions. It suggests your ability to pay tuition and manage debt effectively, factors that institutions may consider during admissions.

While applying for financial aid, it’s important to list all students in the family who will be attending college, as this influences the evaluation of need and the total aid awarded. Submitting the FAFSA early can also lead to better financial aid opportunities, as some grants and scholarships are limited and allocated on a first-come, first-served basis or have early application deadlines.

Components of federal student aid

As previously noted, FAFSA completion permits you to apply for different categories of federal financial aid. But what exactly are these categories? 

One is federal student loans, which the government provides with fixed interest rates. These include subsidized federal student loans, unsubsidized federal student loans, and PLUS Loans. Federal student loans offer benefits like no credit check for most loans, income-driven repayment plans, and the option to change repayment plans after the loan has been taken out.

One component to consider when determining how much financial aid you may receive is federal grants, such as Pell Grants. These are awarded to students with exceptional financial need and do not require repayment unless certain conditions apply. 

For example, the maximum Pell Grant award for the 2024-25 year is $7,395, with eligibility based on your family’s Student Aid Index (SAI) and the school’s cost of attendance. Other federal grants available include Federal Supplemental Educational Opportunity Grants (FSEOG) and TEACH Grants, which vary in amount and eligibility requirements.

Last but not least, the federal work-study program, supported by the federal government, offers part-time employment to eligible undergraduate and graduate students, helping them finance their education while enrolled in school.

Eligibility criteria for FAFSA

To qualify for FAFSA, applicants must:

• Be US citizens or eligible non-US citizens with a valid Social Security number
• Be currently enrolled or accepted to an eligible program
• Have a high school diploma, GED certificate, or completed high school education in a homeschool setting approved under state law.

Interestingly, students from eligible Pacific Island nations do not require a valid Social Security number for FAFSA eligibility. Both undergraduate and graduate students can complete the FAFSA forms if they meet these and other criteria. Additionally, FAFSA applicants must sign certifications confirming the following:

• They are not in default on federal student loans
• They do not owe money on a federal student grant
• They will use the funds solely for educational purposes

It’s also worth noting that an applicant can be disqualified from receiving FAFSA if they have drug-related convictions, outstanding refunds, or defaults on previous financial aid.

Dependency status and its impact on FAFSA

The responses you provide to certain questions on the FAFSA determine your dependency status. 

When it comes to financial aid, graduate and professional students are automatically considered independent, which may impact their eligibility for certain types of assistance. This distinction acknowledges their self-sufficiency and financial independence. 

Why does this matter? Dependent students must report their parents’ financial information on the FAFSA, whereas independent students only report their own (and their spouse’s, if married) financial information.

If you’re a dependent student, you’re required to provide detailed parental financial information. If your parents are living together but not married, information from both parents must be included on the FAFSA. Should your situation change, you should seek advice from the financial aid office on how to update the FAFSA form.

Special circumstances for eligibility

Some students may qualify as independent on the FAFSA due to special circumstances such as:

• Marriage
• Having dependents supported by them
• Veteran status
• Having a legal guardianship
• Being at risk of homelessness

Students who are incarcerated, victims of human trafficking, or in an abusive family environment may submit the FAFSA without parental information. However, they may only be eligible for an unsubsidized loan without a calculated Student Aid Index if parental data is not provided.

Dependency overrides are exceptional measures for students who don’t meet the standard independent criteria. Situations such as abandonment, estrangement, or refugee status may be considered for independent filing. The good news for students worried about their Selective Service registration status is that it no longer affects eligibility for federal student aid.

Step-by-step guide to filling out the FAFSA

With a clear understanding of what FAFSA is and your eligibility, you’re now ready to navigate the process of filling it out. But before you do, both students and parents must create their own FSA IDs. It’s crucial not to share these IDs to maintain security and prevent delays. To start, log in to the FAFSA form, select whether you’re a student or parent, and make sure you’re filing for the correct academic year.

Returning applicants save time with prepopulated personal information in the Student Demographics section, while all applicants must add all schools they’re considering in the School Selection section. If you’re a dependent student, you’ll need to provide the necessary parent information. Use tools like the IRS Data Retrieval Tool for financial details. After completing all sections, sign the FAFSA online. Your parents will also need to sign if you’re a dependent student. The save key can facilitate shared access for completing the form.

Required documents and information

Students and parents are advised to gather the following documents before starting the FAFSA.

• Your Social Security card
• Driver’s license (or passport)
• If you’re a non-US citizen, you’ll need your alien registration card
• Tax returns
• Records of untaxed income
• Current bank statements
• Details of investments

During the application process, you must consent to and approve the transfer of your federal tax information directly into the online FAFSA form. Each student and parent is required to create their own federal student aid ID (FSA ID) to electronically sign the application.

Tips for a smooth FAFSA application

While the task of filling out the FAFSA might seem overwhelming, the process can be streamlined by following these tips:

1. Do not mix up or share FSA IDs between students and parents.
2. Ensure all fields are filled in correctly without commas or decimal points in number fields.
3. Enter accurate Social Security or driver’s license numbers and use a permanent address.
4. Correctly distinguish your Adjusted Gross Income (AGI) from total income.

To complete your FAFSA application, follow these steps:

1. List the college you plan to attend on the FAFSA and include the Federal School Code for the institution.
2. Avoid submitting a paper copy of income tax returns, and ensure you sign and date the paper FAFSA if you use it.
3. When eligible, utilize the IRS Data Retrieval Tool to automatically populate your FAFSA with tax return information, saving time and reducing errors.
4. If you can’t electronically sign your FAFSA application, you can print and mail a signature page, although this may result in a processing delay.

Understanding your financial aid package

After submitting your FAFSA, you will receive your financial aid package. Here’s what’s included:

Your Expected Family Contribution (EFC) is an index number used by colleges to determine your eligibility for financial aid. It’s calculated based on factors like income, assets, and family size. 

Your financial need is determined by subtracting the EFC from the cost of attendance (COA). Schools aim to provide aid to cover some or all of this need.

Financial aid award letters may be updated due to changes in your circumstances. These can include housing status changes or being selected for verification. 

The Student Aid Index (SAI), which is derived from the FAFSA, is used by colleges to assess your family’s financial ability to contribute towards education expenses.

Types of financial aid offered

Your financial aid package will contain various types of loan offers such as Direct Subsidized Loans, Direct Unsubsidized Loans, and Parent PLUS Loans, all of which come with fixed interest rates that change annually, creating a predictable borrowing cost.

Private student loans have the following features:

• They may provide fixed or variable interest rates
• They offer diverse repayment plans
• They typically require a credit check and a co-signer
• They allow borrowing up to the full cost of attendance minus any financial aid received.

Financial aid packages may also include grants and scholarships from various sources, such as federal aid and state and institutional sources. These awards are based on merit or financial need and do not require repayment, thereby offering a preferable alternative to loans.

Comparing financial aid packages

Once you receive your financial aid packages, you’ll need to compare them. To do this, calculate the net price for each school by subtracting the total amount of grants and scholarships received from the total cost of attendance. When analyzing financial aid packages, consider gift awards, loans, financial need, scholarships, and repayment requirements.

If there are elements of the financial aid package you don’t understand, it’s important to contact the financial aid office for clarification.

FAFSA deadlines and timelines

The FAFSA form typically becomes available on October 1 each year for the following academic year. The federal deadline for FAFSA submission is June 30 of the following academic year, with the specific deadline for the 2024-2025 academic year being 11:59 p.m. On June 30, 2025, there will be a CT session.

Keep in mind that state-specific FAFSA deadlines vary. For example, California’s Cal Grant requires submission by a specific postmarked date, and Alaska advises applicants to submit early for programs like the Alaska Education Grant.

Missing the FAFSA deadlines may make students ineligible for certain federal and state financial aid programs, emphasizing the critical need to adhere to these deadlines.

Early FAFSA submission benefits

Submitting your FAFSA early has several advantages. On average, early filers increase their chances of receiving double the grants compared to late filers. Completing the FAFSA as soon as it’s available is recommended since some states and schools have limited funds and may run out early.

Submitting the FAFSA early is recommended for several reasons:

• Many states and colleges have their own non-federal student aid funds with early deadlines or limited funding. Early filing gives candidates a better chance of securing these funds, as they are distributed on a first-come, first-served basis.
• Provides candidates with a clear overview of their financial options early in the college enrollment process.
• Sending the FAFSA application soon after December 31 is recommended to ensure early consideration for aid.

Updating and correcting your FAFSA

Once your FAFSA is submitted, you may need to correct or update some information. You can do this by logging in to your StudentAid.gov account and selecting the FAFSA submission from the ‘My Activity’ section of your account Dashboard. Corrections to social security numbers and other errors can be made by updating information in Account Settings, and updates to mailing address, email address, and other contact information can be done directly on the FAFSA form.

If federal tax information has been transferred via the IRS Data Retrieval Tool and cannot be changed on the online FAFSA form, you should contact the financial aid office for assistance. For the 2024-2025 academic year, corrections or updates to the FAFSA form must be submitted by 11:59 p.m. Central time (CT) on September 14, 2025.

Final word

Understanding FAFSA is fundamental to unlocking financial aid opportunities for your higher education journey. From knowing what FAFSA is and its components to understanding the eligibility criteria, filing the form, and interpreting your financial aid package, you’re now equipped with the knowledge needed to navigate the financial aid landscape effectively.

Remember, filling out the FAFSA is just the beginning. With early submission, careful comparison of financial aid packages, and the use of available assistance resources, you’ll be well on your way to making your dream education more affordable.

Frequently Asked Questions

What is FAFSA, and how does it work?

The FAFSA, or Free Application for Federal Student Aid, is a government form that helps determine your eligibility for federal financial aid, such as student loans, grants, and scholarships. Schools and the government use it to assess your potential support for funding your education.

What is the FAFSA, and who is eligible?

To apply for the FAFSA, you must be a US citizen or eligible non-citizen, have a high school diploma or GED, and demonstrate financial need. Other financial aid options include scholarships and private loans.

Do I pay back FAFSA?

You do not need to repay certain FAFSA funds, such as need-based financial aid grants and federal/state grants like the Pell Grant or Federal SEOG Grants. However, you will need to repay loans like subsidized, unsubsidized, and Direct Plus Loans.

What types of financial aid can I apply for through FAFSA?

Through FAFSA, you can apply for grants, loans, and work-study funding as part of the federal financial aid offerings. These options can help support your education and future career goals.

When should I submit my FAFSA?

You should submit your FAFSA form as soon as possible after October 1 to meet federal and state deadlines, which typically fall before June 30 of the following academic year. This ensures you have the best chance of receiving financial aid.