The formal application for federal financial aid for college is the FAFSA, which either students or their families use. The information submitted in the application is used by states, certain institutions and universities, and private scholarship programs.
The FAFSA bases its asset assumptions on the idea that a student should be able to spend 20% of their assets plus their parents' assets, or 5.64 percent, in any given college year. Whether you are eligible for need-based, non-need-based, or a combination of the two types of aid depends on the information you provide on the FAFSA.
Read on to find out need-based financial assistance programs that demand completion of the FAFSA.
Federal Grants for Additional Educational Opportunities
These grants are not repaid, although they are only offered at selected institutions. The annual sums range from $100 to $4,000. 7 These additional funds, like Pell Grants, are intended for students with few other financial means.
Loans with Direct Federal Subsidies
Depending on your academic year and whether you are classified as an independent or dependent student by the Office of Federal Student Aid, the amount that can be subsidized ranges from $3,500 to $12,500 annually.
Government Work-Study
Paid part-time jobs are made available through participating schools and institutions through the federal work-study program. Graduate and undergraduate students may both qualify.
Non-Need Financial Aid Programs that Demand the FAFSA.
Unsubsidized Direct Loans
Unsubsidized loans are comparable to their subsidized counterparts, with one significant difference: The government does not cover the loan's interest while the student is enrolled in classes or during the subsequent six-month grace period. The loan's principal will increase if students or their parents fail to pay the interest throughout this time.
Regardless of a family's financial status, schools may include these loans in their financial aid package.
Government PLUS Loans
Parents or graduate students are the designated recipients of these loans. The interest is not paid while the student is enrolled and is combined with the principal when they graduate.
Grants for Teacher Education Access in College and Higher Education
These awards, which have an annual maximum of $4,000 (as of 2021-2022), are available to students pursuing teacher education even if they do not fulfill the requirements for need-based aid.
Who is Eligible to File a FAFSA?
You must have financial needs, be a citizen of the United States or an eligible foreign country, and be enrolled in a degree- or certificate-granting program at a college or career school to qualify for the many types of federal student aid.
To be eligible for federal student aid, you must also meet other criteria, each of which varies depending on the type of funding. Most students qualify for federal financial assistance of some kind to assist in covering the cost of their college or career school. Factors including age, race, and subject of study are not considered when assessing a student's eligibility.
The Bottom Line
Most families will find it helpful to complete the FAFSA regardless of their income or asset accumulation. Compared to loans from private lenders, federal student loans often have better terms and provide a range of flexible repayment alternatives.