FAFSA is your gateway to financial aid. The financial aid process hinges on the Free Application for Federal Student Aid (FAFSA), the form required to determine eligibility for all federal financial aid programs. Many state and institutional student aid programs also rely on FAFSA data. File your FAFSA online as soon as possible after January 1 at www.fafsa.ed.gov, because most financial aid is awarded on a first-come, first-served basis. When you file a FAFSA, the federal government issues your student aid report (SAR), which details your eligibility for federal financial aid, and your expected family contribution (EFC, how much you and your family should be able to pay toward college). File a FAFSA every year a student is in school.
Federal aid comes in many forms The most common federal aid programs are Stafford Loans and PLUS Loans for parents, as well as Pell Grants, Work-Study, and Perkins Loans. Stafford Loans allow eligible students attending approved institutions to borrow guaranteed (insured) loans at a fixed rate. A subsidized Stafford Loan is eligible for interest benefits to be paid by the federal government during school, grace, and authorized deferment periods, while an unsubsidized Stafford Loan requires the student to pay interest during those periods.
Financial aid office terms Each school you apply to lists a total cost of attendance (COA) for one year of study. This figure usually includes tuition and fees, room and board, books, supplies, transportation costs, and personal expenses. Your financial need is calculated by figuring the difference between a school's COA and your EFC.
Once your financial aid package has been determined, each school sends you an award letter, the official document itemizing the terms of the aid awarded. If you have any questions about your award, contact a financial aid officer. FAOs are expert in addressing students' concerns about the financial aid process.
The language of lending Private/alternative student loans are funds that a student or a sponsor (usually a parent) borrows from a lending institution—such as a student loan provider like Nellie Mae. If you apply for a student loan, your financial aid officer has to certify your application—confirm for the lender and guarantor that a loan applicant meets enrollment, borrowing amount, and other eligibility criteria. Once a loan application is certified and approved, the lender disburses (sends) funds to the borrower, school, or escrow agent to pay the tuition.
Unlike gift aid (grants or scholarships), all student loans—including those from the federal government—must be repaid.
Check our complete glossary of financial aid terms and our brochures, calculators, and applications for federal and alternative student loans.