What Is the FAFSA?

The Free Application for Federal Student Aid, known as the FAFSA, is the official form to apply for federal financial aid to pay for college. It is also used by many states, individual colleges, and universities in making their financial aid decisions.

Specifically, the FAFSA determines who will receive aid in the form of loans, scholarships, and grants based on the information collected from the application. 

Key Takeaways

  • The Free Application for Federal Student Aid (FAFSA) is used by the federal government to determine a family's eligibility for grants, work-study, and loans to pay for college.
  • States, individual colleges and universities, and private scholarship programs also use information from the FAFSA to make financial aid decisions.
  • Applications for FAFSA open in October of the prior year to enrollment and close in June of the academic year.
  • Funding is often granted on a first-come, first-serve basis, with students applying in June typically eligible only for loans.

Each FAFSA application period is 19 months, starting October 1 of the year before the award year and ending June 30 of the award year. For example, FAFSA applications for the 2022-23 academic year could be submitted between October 1, 2021, and June 30, 2023.  Filling it out as early as possible is a good idea because many states have financial aid deadlines considerably earlier than June 30, and their aid may be available only on a first-come, first-served basis.

The FAFSA lists some of those deadlines, and the office of Federal Student Aid publishes a more comprehensive list of state student aid deadlines.

How Does the FAFSA Work?

The office of Federal Student Aid, part of the U.S. Department of Education, annually provides more than $150 billion in federal aid to some 13 million students. That aid consists of grants, work-study, and loans.

  • Grants, sometimes referred to as scholarships, are meant for students with "exceptional financial need" and don't have to be repaid. Today's most common federal grants for education are known as Pell Grants.
  • Work-study programs provide paid part-time jobs for undergraduate and graduate students through participating colleges and universities.
  • Loans, unlike grants or scholarships, must eventually be repaid. However, federal loans tend to have low interest rates compared with those available from private lenders, as well as more favorable repayment terms. There are several types of federal loans for higher education, sometimes referred to as Stafford Loans. Direct subsidized loans have the best terms and are available only to families with financial need. Direct unsubsidized loans are available to families regardless of financial need. Direct PLUS loans, are available to parents and graduate or professional students, regardless of financial need, although borrowers must have an acceptable credit history.

The FAFSA, which is administered by the office of Federal Student Aid, is the doorway to all of these types of aid.

The questions on the FAFSA are intended to determine the student’s level of financial need and establish their Expected Family Contribution (EFC). That's the amount of money the student and parents are expected to be able to pay out of pocket each year for the student’s college costs, under federal rules. Overall, the federal government, state assistance programs, the colleges the student is applying to, and other scholarship sources all use that data to determine how much aid—and what kinds of aid—the family is eligible for.

Beginning in July 2023 the term "student aid index" (SAI) will replace EFC on all FAFSA forms, thanks to the 2021 Consolidated Appropriations Act. The change attempts to clarify what this figure actually is: an eligibility index for student aid, not a reflection of what a family can or will pay for postsecondary expenses. Adjustments to how the SAI is calculated are also planned to take effect.


Students can expect to receive a financial aid offer around the time that students are accepted by a college. Financial assistance may consist of a package of grants, work-study, and loans. These offers can differ from college to college.

How to Fill Out the FAFSA

The FAFSA is widely known as being complex. It requires students to respond to a number of questions that may take some time to complete. Importantly, families need to submit a new FAFSA every year in order to maintain their financial aid or to try again if they didn't get any aid the first time they applied.

Questions range from basic identifying information for the student and their parents (name, address, Social Security number, date of birth, etc.) to a detailed examination of their finances.

In addition, students and parents will need to supply information on their income and assets, including bank accounts, investments, real estate (except for the family home), and any businesses they own (excluding family farms and small businesses). Both parents and students have a FAFSA account and each must complete FAFSA.

Much of this information will be available from the family's tax returns. The IRS Data Retrieval Tool (IRS DRT) makes it possible to download that data directly to the FAFSA in many cases.

To answer the other financial questions, it will be helpful to have bank, brokerage, and mutual fund statements at hand. For a preview of the FAFSA's questions, the office of Federal Student Aid makes a copy of the printed FAFSA form available online. (Note that while it's permissible to fill out and submit a paper FAFSA form, the online version can be faster and more efficient unless you don't have access to a computer or the internet.)

The FAFSA vs. the CSS Profile

While the FAFSA is the best known and most widely used financial aid application form, it is not the only one. Another is the CSS Profile, an online application administered by the College Board and used by several hundred colleges, universities, and private scholarship programs to determine the student's eligibility for need-based, non-federal financial aid.

Unlike FAFSA, signing up for the CSS Profile isn't always free. Families pay $25 for the first school their student applies to, then $16 for each additional school, although the fees are waived for families making less than $100,000 per year.

The CSS Profile asks many questions similar to those on the FAFSA, yet has some important differences. For example, the CSS Profile takes equity in the family home into account, while the FAFSA does not. The CSS Profile also wants to know about any balances in retirement plans, while the FAFSA ignores them.

Some colleges and universities require families to fill out both the FAFSA and the CSS Profile. A number of schools also have their own, individualized scholarship applications—one more reason to get started as early as possible.

Who Qualifies for FAFSA?

To be eligible for FAFSA, a student must have financial need, be enrolled in a college or university in either a diploma or certificate program, and be a U.S. citizen or eligible noncitizen. Federal eligibility requirements also include the following criteria: a valid Social Security number, continued satisfactory performance in school, and completing a high school diploma, among others.

What is the Deadline for FAFSA?

FAFSA is available October 1 of the year prior to enrolment, and may at times be administered based on a first-come, first-serve basis until June of the academic school year. For this reason, applying as early as possible can increase the likelihood of receiving financial assistance. For example, students who apply in June are often only eligible for loans.

What is the Income Limit for FAFSA?

In short, no income-limit is in place to qualify for FAFSA. Instead, factors including year of enrollment and family size are considered along with displaying financial need.

Bottom Line

Filling out the FAFSA is the first step many families take when seeking financial aid for college. It helps establish eligibility for grants, work-study, and loans. Fill it out as early as possible! Many states have financial aid deadlines earlier than June 30, the end of the 19-month FAFSA application period, and their aid may be available only on a first-come, first-served basis.