If you’re a student headed to college, your financial aid award might seem like an act of fate. Who applies and gets federal student aid and how much can feel like a mystery.
In reality, however, it’s not. The Federal Student Aid Office reviews nearly 20 million financial aid applications a year. And like many government processes, federal student aid determinations are based on objective requirements, guidelines, and formulas.
At this point, you might be asking, “Do I qualify for financial aid?” The answer could be more predictable than you think.
Here are some key eligibility requirements you should know about.
1. Basic financial aid eligibility criteria
Start by reviewing and understanding the basic eligibility criteria for federal student aid. Here are the basement-level requirements you must meet:
- You must be a U.S. citizen or an eligible noncitizen and have a valid Social Security number.
- You must have a high school diploma or GED certificate.
- You must be enrolled or accepted as a student in an eligible degree or certificate program.
Many college students will easily satisfy the above criteria for financial aid. However, if there’s a specific requirement you’re unsure you meet, take some time to understand the fine print.
For residents who aren’t U.S. citizens, for example, your eligibility might depend on your specific immigration or visa status.
The Federal Student Aid Office provides the following flowchart that outlines the requirements and walks you through each criterion (click the image to view it in its entirety):
You can find more details about basic eligibility criteria on the Federal Student Aid Office website.
Note that the above guidelines are the general requirements you must meet. The process for qualifying for financial aid and receiving federal grants, scholarships, and student loans includes several more steps.
2. Complete and submit a FAFSA
The Department of Education requires that students file a Free Application for Federal Student Aid (FAFSA) to receive financial aid. It’s a form through which you provide details about your financial situation, your family circumstances, your college, and other information needed to verify your need and eligibility for financial aid.
In return, you’ll receive the following benefits:
- You’ll satisfy the requirement of filing a FAFSA to be eligible to receive some of the $120 billion it grants in aid each year.
- You’ll definitively answer the question “Do I qualify for financial aid?” A few weeks after filing a FAFSA, you’ll get an award letter outlining whether you qualify.
- You’ll have more options. You might be surprised to find that you qualify for assistance. Or you might you might wind up needing to rely on federal student loans, which also require a filed FAFSA.
The FAFSA also includes a section where you sign a certification that indicates:
- You do not hold any federal student loans currently in default.
- You do not owe any funds on a federal student grant.
- You agree to use federal student aid funds exclusively for educational expenses.
If you don’t meet those requirements, you likely won’t be eligible for financial aid. However, you can work to rehabilitate federal student loans and repay federal grants you owe to regain eligibility.
3. Maintain satisfactory academic progress
If you’re already in college, you must maintain satisfactory academic progress (SAP). In other words, the federal government requires students to do reasonably well in school, according to the following measurements:
- You must earn at least average grades, defined as a GPA of 2.0 or higher.
- You must pass and complete at least two-thirds of the credits you attempt each semester.
- You must stay on track to complete your degree in six years or less for a bachelor’s or three years or less for an associate’s.
If you lose eligibility because of unsatisfactory academic progress, you can work to regain it. But you’ll be better off getting good grades, passing your classes, and staying on track for graduation.
These actions will ensure you remain eligible for all forms of federal student aid, including grants and student loans.
4. Demonstrate financial need
Filed your FAFSA? Here’s why that’s such an important step: The Federal Student Aid Office uses this information to determine your financial need.
Need-based financial aid is valuable because it provides free assistance to students. Here are some types of need-based financial aid:
- Federal Pell Grants: This aid helps students who demonstrate “exceptional financial need” and don’t have a bachelor’s or professional degree cover educational costs. Pell Grants range up to $5,920 for 2017-18, and they don’t need to be repaid.
- Federal Work-Study: This program subsidizes eligible students’ wages with federal funds, which can make it easier for qualifying students to find work. Work-study aid does not need to be repaid and may be used as the student chooses.
- Subsidized Direct Loans: These are loans, so they’ll need to be repaid. However, the interest on the loans is subsidized by the Department of Education, so the balance won’t accrue while you’re in college.
The above aid is based on need. But what exactly makes you “needy”? The government uses the following formula:
Overall, the lower your family’s income is, the more likely you are to receive need-based aid. You also might be eligible for need-based aid if you’re attending a more expensive school or if you have a sibling who’s also in college.
The best way to find out is to file a FAFSA. However, some juniors or seniors in high school might find it useful to estimate their financial need ahead of applying for financial aid.
- The FAFSA4caster, from the Federal Student Aid Office, is a helpful tool to get a snapshot of the aid you’re eligible for, with estimates that can be customized by your COA.
- You can use the EFC Calculator from College Board to get an actual dollar estimate of your EFC.
Explore non-need-based student loans
If you don’t qualify for need-based aid, there are other forms of federal student aid you might qualify for. You can get this aid even if your income or your family’s income exceeds the maximum to qualify for need-based financial aid.
Specifically, aid that isn’t need-based takes the form of federal student loans. You’ll face federal student loan limits that put a ceiling on the total amount of student loans you can borrow.
- Direct Unsubsidized Loans allow undergraduates to borrow up to $12,500 a year, depending on their completed credits and dependency status.
- Direct Graduate Loans are offered to students in graduate or professional programs, allowing them up to $20,500 a year in federal student loans.
- Grad PLUS Loans offer funding beyond the $20,500 cap and any other aid granted, up to the cost of attendance.
- Parent PLUS Loans can be used by parents to borrow for their child’s education, up to the college’s COA minus any other financial aid granted to the student.
The rules that govern federal student aid can feel like an obstacle keeping you from the money you need for college. But when you take the time to understand the requirements to qualify for financial aid, you can untangle the mystery.
Understanding whether you can get student aid and how much will help you confidently plan for college costs.