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A college education is more expensive now than ever before, and it doesn’t look like the cost of tuition will be going down anytime soon. One of the most important things for an incoming college student to do is file the Free Application for Federal Student Aid, otherwise known as FAFSA. As its name suggests, this is the application that students need to file in order to apply for Federal financial aid, which is often a tremendous help to battle the high cost of a college degree.
Why You Need to File FAFSA
FAFSA is the first step to gaining access to a wide assortment of different types of financial assistance—grants, scholarships, loans, and work-study opportunities. These forms of aid can come from either federal or state governments or directly from the college you’re attending. Depending on your financial circumstances and your academic performance, you may be eligible for either need-based funds or merit-based funds, which you may be able to get without having to pay the money back once you’ve graduated.
FAFSA reports the student’s assets and income, as well as his/her parents’ assets and income. These figures are calculated to arrive at the EFC—expected family contribution—for the upcoming school year, which is (as you can imagine) the amount the student’s family can be expected to help out with the cost of college. If the student’s college expenses exceed his/her EFC, the student may be eligible for financial aid.
As an example, suppose Jenny Carter files FAFSA, and it’s determined that her EFC for this coming academic year is $20,000. She’ll be going to a school that has an estimated total cost of $40,000, so she may be eligible for a financial aid package of $20,000 to meet her remaining financial need.
Families sometimes choose not to have their children file FAFSA because they feel their financial situation is comfortable enough that they can afford to pay for college and wouldn’t want to take the funds away from someone who isn’t as fortunate, or because they don’t believe they’ll qualify for need-based aid anyway. However, that’s often a poor choice because sometimes merit-based scholarships require students to have filled out FAFSA, and so do federal loans. Also, despite believing that you may make too much to qualify for aid, some schools are so expensive that you may qualify for support, even though you make a decent amount of money (especially families with multiple students in college).
Check back with us next week for tips on when to file FAFSA!
