FAFSA

Last updated
Student loans in the U.S.
Regulatory framework
National Defense Education Act
Higher Education Act of 1965
HEROES Act
U.S. Dept. of Education · FAFSA
Cost of attendance · Expected Family Contribution
Distribution channels
Federal Direct Student Loan Program
Federal Family Education Loan Program
Loan products
Perkins · Stafford
PLUS · Consolidation Loans
Private student loans

The Free Application for Federal Student Aid (FAFSA) is a form completed by current and prospective college students (undergraduate and graduate) in the United States to determine their eligibility for student financial aid.

Contents

The FAFSA is different from CSS Profile (short for "College Scholarship Service Profile"), which is also required by some colleges (primarily private ones). The CSS is a fee-based product of the College Board (a private non-profit organization) and is used by the colleges to distribute their own institutional funds, rather than federal or state funding.

Eligibility

The official FAFSA website is studentaid.gov. FAFSA.gov screenshot 2016-01-04.png
The official FAFSA website is studentaid.gov.

In order to receive federal student financial aid, students must meet the following criteria:

Male students between the ages of 18 and 25 were generally required be registered with the Selective Service System (for Conscription in the United States), but the FAFSA Simplification Act removed this requirement starting with the 2021–2022 school year. [5] The FAFSA Simplification Act was a part of the Consolidated Appropriations Act, 2021.

Students who are military veterans and active duty service members may apply for financial aid by filing a FAFSA even if they also apply for education and housing benefits offered by the Post-9/11 G.I. Bill and its accompanying Yellow Ribbon program. The amount of military aid a student receives for a college education does not defer eligibility or reduce the amount of student aid that student could receive from the four federal grant programs – Pell, SMART, FSEOG, and TEACH – and many of the state student aid programs.

Student Aid and Fiscal Responsibility Act (SAFRA) of 2010 changed the criteria for suspension of eligibility for drug-related offenses. Previously, students could lose eligibility for either the possession or sale of a controlled substance during the period of enrollment. SAFRA dropped the penalties for possession of a controlled substance but retained the penalties for sale of a controlled substance. SAFRA increases the suspension to two years for a first offense and indefinite for a second offense.

Most students who are eligible to receive federal aid and complete the FAFSA will receive some form of financial aid regardless of their financial need. [6]

Preparation and filing options

As of the 2017–2018 academic year, the FAFSA is made available to the public on October 1 every year for the future academic year. The 2016–2017 academic year was the final time the FAFSA was not made available until January 1. The US Department of Education made the FAFSA available earlier to more closely align the timing of the financial aid application process with the typical college application process. [7] Additionally, 2-year old US tax information is used to complete the financial sections of the FAFSA beginning with the 2017–2018 academic year. This change in using "prior-prior tax year" information enables families to use the IRS Data Retrieval Tool in the FAFSA to verify their tax information without a delay from the IRS processing tax information. [7] Some financial aid is provided on a first-come, first-served basis, and students are encouraged to submit a FAFSA as soon as possible. [7]

According to the U.S. Department of Education's website, students have three options for filling out the form: [8]

The Higher Education Opportunity Act of 2008 authorized fee-based FAFSA preparation. [9] By law, fee-based FAFSA preparation services must on initial contact with students inform them of the free option and be transparent about their non-affiliation with the U.S. Department of Education and their fees.

Application process

Applicants complete the FAFSA by providing their demographic and financial information and, in many cases, the demographic and financial information of their parents/guardians. In addition to this demographic and financial information, applicants can list up to ten schools to receive the results of the application once it is processed. Historically, there was some concern that colleges could deny admission, waitlist applicants, or offer less financial aid as a result of the order in which applicants list schools on the application, or FAFSA position. [10] [11] However, the US Department of Education changed the FAFSA for the 2016–2017 academic year to prevent schools from having access to view other schools that may be listed on the application. [12]

After completing the FAFSA, students are presented with a Student Aid Report (SAR). The SAR provides a student with their potential eligibility for different types of financial aid, their Expected Family Contribution (EFC), and a summary of the data a student provided in the application. [13] An electronic version of the SAR (called an ISIR) is made available to the colleges/universities the student includes on the FAFSA. The ISIR is also sent to state agencies that award need-based aid.

Students can file an appeal with their college financial aid office in order to seek additional financial aid if their current financial situation is no longer the same as the financial information they provided on FAFSA (i.e. their parent recently lost their job). The exact appeal process can vary from school to school. [14] [15] SwiftStudent, a free service, provides template letters for college students to use when appealing their financial aid. [14] [15]

Currently, students can only list ten schools on their FAFSA application. If students are applying to more than 10 colleges or universities, there are three options they can choose from that allow them to submit their FAFSA application to additional schools. [16]

Types of federal financial aid

Federal Student Aid offers several different types of financial aid programs.

History

FAFSA originally came from the 1965 Higher Education Act (HEA) by President Lyndon Johnson, this established the United States Government as the primary provider of financial aid for students. [19] For years the application was called Financial Aid Form (FAF), which was an optional form used by some—but not all—colleges and universities. When Congress reauthorized the HEA in 1992 they created a standardized federal form for all prospective students seeking aid. [20] The stated goal of FAFSA and other government funded education programs was to create equal opportunities for students seeking higher education. When the HEA was reauthorized again in 2008 lawmakers added a clause that schools must report information about who is receiving financial aid. [19] Subsequent studies revealed continued inequality for students of color, who often had to take out more student loans than more privileged counterparts. [20]

Recent updates have been made to increase accessibility of financial aid. [21] The original FAFSA form had 108 questions, which was a significant barrier for many low-income families seeking financial aid. [20] The questions were broadly seen as excessively detailed and unnecessarily complicated, with students being required to dedicate several hours to completing their application. The Consolidated Appropriations Act, 2021 shortened the FAFSA from 108 questions to 36, to encourage more eligible students to fill out the form. [22] In addition, students now have the option to link their IRS account with their FAFSA account to make the application simpler to complete accurately. Students must now report the value of their family business or farm. [4] The Consolidated Appropriations Act also opened financial aid eligibility to students that had previously been excluded from the program. [21]

2024 changes

In 2024, the Department of Education made substantial changes to FAFSA in response to the FAFSA Simplification Act in 2020. Some of these changes were initially plagued with technical errors and glitches, causing significant delays in the release of data to colleges and universities and considerable confusion and frustration among parents and students. Students from disadvantaged groups and low-income backgrounds are among the vulnerable student demographics who were disproportionately impacted by the technical obstacles. These students might not have access to the tools or assistance they need to deal with the challenges of submitting a financial aid application. [23] [24]

The problems with the FAFSA resulted in a congressional hearing where witnesses reported that the multiple errors and delays in releasing data to colleges and universities could significantly diminish enrollment. Richard Cordray, the Department of Education employee in charge of Federal Student Aid, subsequently announced his resignation at the end of June. [25]

In order to fill out the FAFSA, parents and students must create an FSA ID. Inconsistent personal information caused problems for some individuals surrounding ID verification, including errors in names, addresses, and other information, which has led to delays in the processing of applications for financial assistance.

Students from disadvantaged groups and low-income backgrounds are thought to be disproportionately impacted by the technical obstacles. Many are urging changes to the FAFSA application process in order to resolve these technical issues and guarantee fair access to financial assistance. They contend that students are unfairly burdened by the current system, especially those who already face obstacles to pursuing higher education. [26]

See also

Related Research Articles

<span class="mw-page-title-main">National Defense Education Act</span> United States law enacted 1958

The National Defense Education Act (NDEA) was signed into law on September 2, 1958, providing funding to United States education institutions at all levels.

<span class="mw-page-title-main">Student loan</span> Type of loan for educational expenses

A student loan is a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses. It may differ from other types of loans in the fact that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in school. It also differs in many countries in the strict laws regulating renegotiating and bankruptcy. This article highlights the differences of the student loan system in several major countries.

Student financial aid in the United States is funding that is available exclusively to students attending a post-secondary educational institution in the United States. This funding is used to assist in covering the many costs incurred in the pursuit of post-secondary education. Financial aid is available from federal and state governments, educational institutions, and private organizations. It can be awarded in the form of grants, loans, work-study, and scholarships. In order to apply for federal financial aid, students must first complete the Free Application for Federal Student Aid (FAFSA).

The Tuition Assistance Program is a financial aid program for students who are New York State residents and who are attending a post-secondary educational institution in New York. It is a program of the Higher Education Services Corporation which is a New York State Agency.

A Pell Grant is a subsidy the U.S. federal government provides for students who need it to pay for college. Federal Pell Grants are limited to students with exceptional financial need, who have not earned their first bachelor's degree, or who are enrolled in certain post-baccalaureate programs, through participating institutions. Originally known as a Basic Educational Opportunity Grant, it was renamed in 1980 in honor of Democratic U.S. Senator Claiborne Pell of Rhode Island. A Pell Grant is generally considered the foundation of a student's financial aid package, to which other forms of aid are added. The Federal Pell Grant program is administered by the United States Department of Education, which determines the student's financial need and through it, the student's Pell eligibility. The U.S. Department of Education uses a standard formula to evaluate financial information reported on the Free Application for Federal Student Aid (FAFSA) for determining the student's Expected Family Contribution (EFC).

A Federal Perkins Loan, also referred to as a Perkins Loan, was a need-based student loan offered by U.S. Department of Education from 1958 until 2017. Created as part of the Federal Direct Student Loan Program, the Perkins Loan served to assist American college students fund their post-secondary education. The program was named after Carl D. Perkins, a former member of the U.S. House of Representatives from Kentucky.

The National Science and Mathematics Access to Retain Talent (SMART) Grant was a need based federal grant that was awarded to undergraduate students in their third and fourth year of undergraduate studies. The National SMART grant was introduced to help maintain the edge that United States has in the fields of Science and Technology. Only specific majors were eligible for the SMART grant, the complete list is given below.

The Federal Supplemental Educational Opportunity Grant, more commonly known by its acronym SEOG, is a federal assistance grant reserved for college students with the greatest need for financial aid to attend school. To be eligible for this grant, applicants must meet all of the following criteria:

  1. To be a United States citizen or eligible non-citizen,
  2. To not have a bachelor's degree,
  3. To not be in default of any federal student loan,
  4. To not have a Federal Pell Grant overpayment,
  5. To file their FAFSA.

A Stafford Loan was a student loan offered from the United States Department of Education to eligible students enrolled in accredited American institutions of higher education to help finance their education. The terms of the loans are described in Title IV of the Higher Education Act of 1965, which guarantees repayment to the lender if a student defaults. As of July 1, 2010, Stafford Loans are no longer being offered, having been replaced with the William D. Ford Federal Direct Student Loan Program.

A PLUS Loan is a student loan, which is part of the Federal Direct Student Loan Program, offered to parents of students enrolled at least half time, or graduate and professional students, at participating and eligible post-secondary institutions. The original, now obsolete, meaning of the acronym was "Parent Loan for Undergraduate Students".

The Federal Family Education Loan (FFEL) Program was a system of private student loans which were subsidized and guaranteed by the United States federal government. The program issued loans from 1965 until it was ended in 2010. Similar loans are now provided under the Federal Direct Student Loan Program, which are federal loans issued directly by the United States Department of Education.

The William D. Ford Federal Direct Loan Program provides "low-interest loans for students and parents to help pay for the cost of a student's education after high school. The lender is the U.S. Department of Education ... rather than a bank or other financial institution." It is the largest single source of federal financial aid for students and their parents pursuing post-secondary education and for many it is the first financial obligation they incur, leaving them with debt to be paid over a period of time that can be a decade or more as the average student takes 19.4 years. The program is named after William D. Ford, a former member of the U.S. House of Representatives from Michigan.

Federal Student Aid (FSA), an office of the U.S. Department of Education, is the largest provider of student financial aid in the United States. Federal Student Aid provides student financial assistance in the form of grants, loans, and work-study funds. FSA is a Performance-Based Organization, and was the first PBO to be established in the US government.

In the United States, the Federal Direct Student Loan Program (FDLP) includes consolidation loans that allow students to consolidate Stafford Loans, Graduate PLUS Loans, and Federal Perkins Loans into one single debt.

<span class="mw-page-title-main">Student loans in the United States</span> Loans incurred to pay for higher education

In the United States, student loans are a form of financial aid intended to help students access higher education. In 2018, 70 percent of higher education graduates had used loans to cover some or all of their expenses. With notable exceptions, student loans must be repaid, in contrast to other forms of financial aid such as scholarships, which are not repaid, and grants, which rarely have to be repaid. Student loans may be discharged through bankruptcy, but this is difficult. Research shows that access to student loans increases credit-constrained students' degree completion, later-life earnings, and student loan repayment while having no impact on overall debt.

In the post-secondary education system of the United States, an expected family contribution (EFC) is an estimate of a student's, and for a dependent student, their parent(s)' or guardian(s)', ability to pay the costs of a year of post-secondary education. The EFC is used in the United States student financial aid process to determine an applicant's eligibility for need-based federal student aid. In most cases, the same estimate is also used for state and institutional (college-based) financial aid. The EFC is included on the Student Aid Report and Institutional Student Information Record, which are sent after filing a form called a Free Application for Federal Student Aid (FAFSA).

The Federal Work-Study Program originally called the College Work-Study Program and in the United States frequently referred to as just "work-study", is a federally funded program in the United States that assists students with the costs of post-secondary education. The Federal Work-Study Program helps students earn financial funding through a part-time employment program. Approximately 3,400 institutions participate in the program.

Pay As You Earn (PAYE) is a federal student loan relief program signed into law on December 21, 2012, by President Barack Obama. It is one of four income-driven repayment plans.

The FAFSA position is a historical term in college admissions in the United States that referred to the position where a prospective college appeared on an applicant's FAFSA form. FAFSA permits an applicant to list up to ten colleges on the form, and the entire list was historically sent to each college. As a result, admissions officers could see which other colleges a student is applying to and the order in which the colleges were listed.

A scholarship is defined as a grant or payment made to support a student's education, awarded on the basis of academic or other distinction. "Scholarship" has a different meaning in the United States than it does in other countries, with the partial exception of Canada. Outside the U.S., scholarship is any type of monetary award to fund education. In the United States, the only country with a national system that determines a student's financial need, and where universities are far more expensive than in other countries, a scholarship is money for which the student must qualify in some way, and the term "grant" - an award the student receives because of financial need - is used for what in other countries are called scholarships.

References

  1. ↑ "Eligibility for Aid FAQ" . Retrieved 2014-03-25.
  2. ↑ "If you want to keep receiving your federal student aid, make sure you stay eligible". studentaid.ed.gov. Retrieved 2016-09-02.
  3. ↑ "Archived copy" (PDF). Office of National Drug Control Policy . Archived (PDF) from the original on 2017-01-23. Retrieved 2015-06-24– via National Archives.{{cite web}}: CS1 maint: archived copy as title (link)
  4. 1 2 Douglas-Gabriel, Danielle (December 31, 2023). "The new FAFSA form for college aid is out. Five things to know". Washington Post .
  5. ↑ "Selective Service | 2021-2022 Federal Student Aid Handbook". fsapartners.ed.gov. Retrieved 2023-01-19.
  6. ↑ "Types of Financial Aid". US Department of Education. Retrieved January 14, 2021.
  7. 1 2 3 Tompor, Susan (August 28, 2016). "Oct. 1 is a new kickoff for FAFSA headaches: What do you do next?". Detroit Free Press . Retrieved January 5, 2017.
  8. ↑ "FAFSA Filing Options".
  9. ↑ Higher Education Act of 2008 Public Law 110–315—AUG. 14, 2008 122 Stat. 3279–80
  10. ↑ Weston, Liz (November 11, 2013). "Colleges May Penalize Students Over Preference on Financial Aid Applications". Reuters. Retrieved January 12, 2016.
  11. ↑ Rivard, Ry (October 28, 2013). "Using FAFSA Against Students". Inside Higher Ed. Retrieved January 12, 2016.
  12. ↑ "Summary of Changes for the Application Processing System 2016 2017" (PDF). US Department of Education. December 2015. Archived from the original (PDF) on December 11, 2015. Retrieved January 12, 2016. (see page 3:) "....We have designed a solution for 2016-2017 that allows us to send an ISIR to each school listed on the student's record and only include the Federal School Code of the school receiving the ISIR.."
  13. ↑ "What is the Student Aid Report (SAR)?". US Department of Education. Archived from the original on October 31, 2019. Retrieved January 12, 2016.
  14. 1 2 Douglas-Gabriel, Danielle (April 15, 2020). "As colleges brace for financial aid appeals, there's a new tool to help students file them". The Washington Post. Retrieved April 19, 2020.
  15. 1 2 Hoover, Eric (2020-04-15). "Financial-Aid Appeals Are Mysterious. This Tool Was Built to Simplify Them". The Chronicle of Higher Education. ISSN   0009-5982 . Retrieved 2020-04-19.
  16. ↑ "If I want to apply to more than ten colleges, what should I do?". studentaid.gov. United States Federal Government. Retrieved 2021-01-19.
  17. ↑ "2015-2016 Federal Pell Grant Payment and Disbursement Schedules". Archived from the original on 2017-05-13. Retrieved 2015-10-27.
  18. ↑ "FAFSA Guide: How to Get Free Money for College".
  19. 1 2 "Federal Financial Aid Policy: Then, Now, and in the Future". www.naspa.org. Retrieved 2022-10-16.
  20. 1 2 3 Shermer, Elizabeth Tandy (2021-05-03). "75 years of reforms have failed to fix our college financial aid system". The Washington Post. Retrieved 2022-10-15.
  21. 1 2 "FY 2021 Omnibus Appropriations Bill". www.ncsl.org. Retrieved 2022-10-16.
  22. ↑ "Congress Just Made It a Lot Easier to Apply for Financial Aid". 22 December 2020.
  23. ↑ "Why students applying for college financial aid are facing new technical hurdles". PBS NewsHour. 2024-02-18. Retrieved 2024-05-02.
  24. ↑ "Getting to College: FAFSA Challenges for First-Gen Students | Harvard Graduate School of Education". www.gse.harvard.edu. 2024-03-20. Retrieved 2024-05-03.
  25. ↑ Schermele, Zachary; Wong, Alia (April 28, 2024). "Top Education Department official steps down amid crisis over college financial aid". USA Today . Retrieved May 3, 2024.
  26. ↑ "Why students applying for college financial aid are facing new technical hurdles". PBS NewsHour. 2024-02-18. Retrieved 2024-05-07.
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