DEFINITION of Free Application for Federal Student Aid (FAFSA)
Free Application For Federal Student Aid (FAFSA) is the official form used to request federal, state and school assistance in paying for college. The FAFSA asks questions to determine the student’s level of financial need and establish his or her expected family contribution, or the amount of money the student and parents are expected to pay out of pocket for the student’s college expenses. The federal government, the colleges the student is applying to, and the states those colleges are located in all use the FAFSA in determining how much financial aid to grant a student who applies for college financial aid.
BREAKING DOWN Free Application for Federal Student Aid (FAFSA)
The office of Federal Student Aid, a division of the U.S. Department of Education, annually provides more than $120 billion in federal grants, work-study funds, and loans to some 13 million students who qualify for federal assistance. The office manages student financial assistance programs, as well as develops the FAFSA and processes the submitted applications.
How the FAFSA is Used to Apply for Aid
Every year, millions of college students and parents of college students fill out this form. The application process is rigorous, requiring the disclosure of a great deal of financial information. The FAFSA’s numerous questions cover basic identifying information for the student and his or her parents (name, address, Social Security number, date of birth, etc.), including the following:
1. Whether the student has any drug convictions
2. What level of education the student’s parents completed
3. How much income the student, the student’s spouse (if applicable), and the student’s parents earned last year
4. Whether the student or parents receive income from federal assistance programs such as Temporary Assistance for Needy Families and the Supplemental Nutritional Assistance Program.
Students or their parents must submit a FAFSA each year to apply for financial aid. Applicants can submit the FAFSA by mail, but submitting it online has several advantages including space to list 10 colleges instead of four, faster response and a system for catching application errors. The FAFSA costs nothing to submit and must be filed between January 1 and June 30 for the upcoming school year.
State deadlines vary significantly, and some are based on postmark date, some are based on the date received and some are based on the date processed. Student aid eligibility for the upcoming school year is based on the prior year’s tax return. Because the FAFSA is based on tax return data, it is best to complete that year’s tax return early before completing the FAFSA.