Are you ready for the FAFSA?

By Leticia Tomas Bustillos, Associate Director, Education Policy Project, NCLR

It’s that time of year across schools and the countdown has begun. High school seniors have left behind the exciting, panic-inducing college application process and now the wait begins for those eagerly anticipated college letters and, of course, the merriment of the last few months in school. Still others may still be trying to figure things out, not knowing for certain what their path will be post-high school. For everyone, the decided and the undecided alike, I have one question: Have you filled out the FAFSA?

The Free Application for Federal Student Aid (FAFSA) is probably the singular most important document you need to think about today. It will open the doors of higher education by giving you access to federal student aid. For many students across the country, the cost of college is a huge concern. With rising tuition costs combined with everyday expenses, going to college may seem like an impossible dream for students. But it doesn’t have to be. In filling out the FAFSA, students are able to access much-needed aid in the form of grants and loans that will help cover the costs of college.

Unfortunately, too many students leave money on the table. In 2011–12, almost two million students who would have been eligible for a Pell Grant and other state and institutional grants totaling more than $10 billion did not receive aid because they did not complete the FAFSA.

So, let’s begin and get you ready to fill out the FAFSA, change this trend, and get you the aid that will help get you through college.

First, and perhaps the most important: the FAFSA is free. There are no fees involved. Some companies will charge you a “small fee” to help you fill out the form. Stay away from them. Instead, go to a trusted source (teacher, counselor, community center) that will help you navigate the process. The Department of Education has developed many resources and a number of videos that will walk you through the process, which should take approximately 30 minutes to complete.

Second, be prepared. The first thing you will need to do will be to create your FSA ID, which will allow you to access and update the FAFSA as needed. If you are a dependent of your parents, they will also need to create an FSA ID. In addition, you will need a number of documents to fill out the form:

  • Your Social Security number
  • Your Alien Registration Number (if you aren’t a U.S. citizen)
  • Your most recent federal income tax returns, W-2s, and other records of money earned (Note: If you’re eligible, you can transfer your federal tax return information into your FAFSA using the IRS Data Retrieval Tool.)

Third, know the deadlines for submitting your forms. You can apply for federal student aid anytime between January 1 and June 30, 2016. States and institutions have different deadlines that are important to be aware of, as certain grants and other forms of aid may be allocated on a first-come, first-served basis. The earlier you submit the FAFSA, the better. However, don’t give up if you’ve missed the deadline. Turn it in anyway and you may still be eligible for funds. Click here for a document with state deadlines that you can print and keep as a reference.

I have talked to many students across the country about their hopes and dreams. They understand the value of a college degree to secure a better future. “Can I afford college?” is the one constant question I get. Filling out the FAFSA is a first step to answering this, as you become more aware of your college financing options. Knowledge is power—knowing your options now will help you make important decisions about your future.

Financial Aid and the Cost of College

For many Latino students and families, the cost of college is a major concern and perceived barrier. Most students are unaware of the types and sources of financial aid available and how to apply for them. This blog aims to provide information to help students understand financial aid and how it can help them achieve their dream of attending college.

See the infographic and glossary of terms below to help you navigate the world of financial aid.

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Financial Aid Glossary

Award Letter: Your award letter outlines the financial aid package being offered to you. You usually receive your award letter after you have completed the FAFSA (Free Application for Federal Student Aid) and have received your Student Aid Report (SAR).

Cost of Attending College: The cost of attending (COA) is the total cost of going to college, including tuition, room and board, books, transportation, fees, and personal expenses. Most two-year and four-year colleges will calculate your COA to show your total cost for the school year (for instance, for the fall semester plus the spring semester).

Demonstrated Need: This is the difference between the cost of attending a college and your Expected  Family Contribution (EFC).

FAFSA: This is the Free Application for Federal Student Aid, a federal form required from all students who wish to apply for need-based financial aid, including grants, loans, and work-study awards.

Expected Family Contribution (EFC): The EFC is the amount of money students and their families are expected to contribute toward their education, as determined through a “need analysis” of information provided on a FAFSA.

Financial Aid Office: The office at the college or university campus that decides how much money a student will receive in grants and loans.

Room & Board: The cost of a room in a dormitory and a dining hall meal plan at a college or university.

Federal Pell Grant: This grant is a form of financial aid provided by the Federal government to students whose FAFSA indicates a high level of financial need. Unlike a loan, Federal Pell Grants do not have to be repaid.

Federal Perkins Loans: These loans are similar to Stafford loans in that no interest accrues while enrolled in college. At a five percent interest rate, the repayment grace period is longer than that of a Stafford subsidized loan. The need-based standards are more stringent for the Perkins loan and funds are awarded based on the FAFSA Student Aid Report.

Federal Work-Study Programs: The FWS Program provides funds for part-time employment to help students in need to finance the costs of postsecondary education. Most colleges offer work-study programs. The amount of financial aid provided to a student will vary, as will the size of the federal work-study award. It’s important to note that a student enrolled in a federal work-study program is unable to earn more than the size of the work-study award.

Grants: Grants, like loans and most scholarships, are based on financial need. A grant may be provided by federal or state governments, an institution, a foundation, or some other nonprofit funding source and does not have to be repaid.

Institutional Grant: This is a need-based grant provided by a college or university and offered to students whose families cannot pay the full cost of college. Institutional grants do not have to be repaid.

GraduationInstitutional Loan: Any student loan administered by the college or university using the institution’s funds as the source of funding. Perkins Loans may also be considered institutional loans.

Loans: A loan is a type of financial aid that is available to students and to the parents of students.
An education loan must be repaid. In many cases, however, payments do not begin until the student finishes school.

Merit-Based Grant: A form of gift aid (aid that does not require repayment) based upon your grade point average, academic excellence, and extracurricular involvement, with some attention to your financial need.

Need-Based Grant: This grant is offered, as a part of the financial aid package, when a student and his or her family are unable to pay the full cost of attending an institution. The grant does not need to be repaid.

Out-of–State (Non–Resident) Student: Student whose permanent residence is in a different state than that of the state-funded college or university which he or she attends or hopes to attend. Out‐of-state students generally pay higher tuition at state colleges and universities than do in-state students.

PLUS Loan: The Federal Parent Loan for Undergraduate Students (PLUS) allows parents, regardless of income, to borrow up to the total cost of education minus the amount of any other financial aid awarded by the institution or the government.

Scholarships: Financial aid that is awarded by schools, businesses, institutions, associations, and private industry that does not have to be repaid. Scholarships can be awarded based on need, academic merit, academic concentration, interests, or a host of other criteria.

Stafford Loan: A federal education loan that is funded and/or guaranteed and insured by the federal government. There are two types: subsidized and unsubsidized.

Subsidized Loan: A need-based loan on which the federal government pays accrued interest while the student borrower is in school, during the grace period, and during periods of deferment.

Unsubsidized Loan: A non-need-based loan for which the student is responsible for paying accrued interest.

Student Aid Report (SAR): This form will list the information you gave on the FAFSA and will give you a dollar amount for your Expected Family Contribution (EFC), which colleges use to determine your financial aid eligibility.

William D. Ford Direct Loan Program: A loan program administered by the U.S. Department of Education to provide loans that help students pay for their post-secondary education.