With 70 percent of colleges too expensive for most Americans, it’s little surprise that many students turn to financial aid to help get them through. Whether you qualify for grants or have to settle for federal loans, you need to fill out the Free Application for Federal Student Aid (FAFSA) to get government help covering your education costs.
The good news is that there are no FAFSA income limits for 2018. You can fill out the FAFSA no matter your economic situation and see if you qualify for some financial aid.
What types of federal student aid are available?
While there are no overall FAFSA income limits, the type of aid you’re eligible for, and whether you qualify for need-based financial aid, will depend on your family’s finances.
Even if you don’t think you qualify for need-based aid, though, it makes sense to fill out the FAFSA to see if you can get non-need-based aid. You have to complete a FAFSA each year to keep receiving federal student aid.
Here are the types of federal financial aid you can obtain as a result of filling out the 2018 FAFSA:
Federal Pell Grant
This is free money for school that doesn’t have to be repaid. The amount you receive depends on your financial need and the cost of attendance at your school. Amounts for Pell grants change annually. For 2017-18, the maximum Federal Pell Grant award was $5,920, while the limit for 2018-19 will be announced in the coming year.
Pell grants are only available to undergraduates, and you can only receive them for 12 semesters.
Federal Supplemental Educational Opportunity Grant (FSEOG)
Undergraduates with “exceptional financial need” can qualify for an additional $4,000. Pell Grant recipients receive priority over other students. However, while the government provides enough money for each participating school to cover all its eligible students, that might not be the case with the FSEOG.
Check for other grants, including those for future teachers or for the children of fallen U.S. service members, to see what you might qualify for.
Direct Subsidized Loan
If you have financial need, and grants aren’t covering the cost of school, a federal subsidized loan can help close the gap if you’re an undergraduate. The government usually pays the interest on the loan while you attend school — as long as you are enrolled at least half-time — and during your student loan grace period, which usually runs for six months after you leave school.
Your interest rate depends on the rate Congress sets for the school year. Rates are reviewed annually, and each new school year results in a new subsidized loan, based on the information used to update your FAFSA on an annual basis.
Direct Unsubsidized Loan
This financial aid program is not based entirely on economic need. You can receive an unsubsidized loan for any amount up to the year’s limit or your school’s cost of attendance (whichever is less), regardless of whether you’re an undergraduate or a graduate student. When you borrow using this program, the government won’t pay any of your interest, so it will accrue and be added to your loan amount if you don’t make interest payments while you’re at school.
You can see the aggregate loan limits from the Department of Education below:
Direct PLUS loan
Graduate or professional students can take these loans, as can parents of undergraduate students. The interest is unsubsidized, so the borrower is responsible for the total cost of the debt. Interest on PLUS loans is higher than the interest charged on Direct subsidized and unsubsidized loans. The maximum you can borrow is based on the cost of attendance at the school, minus all the other financial aid you receive.
Participating schools also offer government-funded part-time jobs for qualifying students with financial need. This program is available for undergraduate and graduate students alike. In many cases, the work you do should be related to your course of study or involve community service.
You can expect to earn at least federal minimum wage. However, there are times that you can be paid more, depending on the skills needed for the job, as well as the funds the school has available.
Figuring out your financial need with the FAFSA
The point of the FAFSA is to help schools figure out your need. That’s right: The school determines what kind of federal financial aid package you get.
How much you need is decided by comparing your Expected Family Contribution (EFC) with the cost of attendance at your school.
Expected Family Contribution (EFC)
The EFC is calculated using a formula that is set by law. Financial aid offices use the information included on your FAFSA to determine how much your family can reasonably be expected to pay to cover your education expenses. Some of the items taken into consideration include:
- Your family’s income (taxed and untaxed) and your family’s current assets.
- Any benefits (such as Social Security and unemployment) you or your family receive.
- Size of your family.
- How many siblings you have attending college during the school year.
Once your EFC is determined, it’s subtracted from your school’s cost of attendance.
Cost of attendance
When you fill out your FAFSA, you specify which schools you want the information sent to. Each school has its own cost of attendance, based what you would pay to attend the school for two semesters.
In some cases, though, you might seek a certification rather than a degree. Such a program might last a different length of time. Pay attention to the period covered to understand your financial aid award better.
The total cost of attendance for a year includes your tuition and fees, as well as your room and board. It also includes what you can reasonably expect to pay for books, supplies, loan fees, eligible study-abroad programs, and transportation. Finally, your cost of attendance estimate can also include an allowance for child care and disability costs.
Need-based and non-need-based financial aid
Once the school has your FAFSA, it can put together an aid package. You might be offered a combination of need-based and non-need-based options.
For example, your cost of attendance is $18,000 for the year, and the EFC formula indicates that your family should be responsible for $14,000 of that amount. Your need-based aid maximum would be $4,000. It might be offered to you in the form of grants, subsidized loans, and/or work-study.
Of course, even though your EFC is $14,000, it doesn’t mean that your family can actually afford to pay that amount of money.
That’s where the non-need-based aid comes in. You might be offered an unsubsidized Direct loan, and you might need to take a PLUS loan as well. Your EFC doesn’t determine your non-need-based aid. Instead, it looks at your cost of attendance and subtracts all the other aid you have, including your need-based aid, any merit-based scholarships you obtained from the school or private sources, and all other sources of aid.
So, if your cost of attendance is $18,000, and you receive $4,000 in need-based aid, and you have a merit-based scholarship amounting to $6,000, your non-need-based total is $8,000. You might be offered a combination of non-need-based aid up to that amount.
Each year, you should fill out the FAFSA to determine your financial aid eligibility, since it can change. When I went to college as a freshman, I wasn’t eligible for any need-based aid. However, my sister started college when I was a sophomore, and that made a difference, allowing me access to Work-Study program funds.
Fill out the FAFSA
Head over to the Department of Education website to start your FAFSA application. The chart below can help you gather needed documentation before you begin.
While you don’t need one to fill out the FAFSA, it can be a good idea to create a Federal Student Aid ID (FSA ID). Your FSA ID can make it easier to find your application once it’s started, as well as to access other information about financial aid throughout your college career. You can quickly pull up your student aid reports, as well as keep track of your Direct loan servicers.
If you have your information together, it’s possible to complete your application in 30 minutes or less. Plus, starting in spring 2018, the Department of Education plans to make it possible to fill out the FAFSA using a mobile app.
You can also use the FAFSA4caster tool to estimate your potential financial aid before you even start your application, so you can get an idea of where you stand.
FAFSA applications open on October 1 for the following year. It’s best to apply as soon as possible, since some of the money is handed out on a first-come, first-served basis. The earlier you apply, the better your chances of getting the help you need for school.
In the end, the FAFSA can be a big help as you look for the funds to pay for college. It’s a good starting point to see what financial aid you qualify for.
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|* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
1 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
(1)All rates shown include the auto-pay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
(2)This informational repayment example uses typical loan terms for a freshman borrower who selects the Deferred Repayment Option with a 10-year repayment term, has a $10,000 loan that is disbursed in one disbursement and a 8.35% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $179.18 while in the repayment period, for a total amount of payments of $21,501.54. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
(3)As certified by your school and less any other financial aid you might receive. Minimum $1,000.
Information advertised valid as of 9/3/2019. Variable interest rates may increase after consummation.
2 Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
3 Important Disclosures for Discover.
Discover's lowest rates shown are for the undergraduate loan and include an interest-only repayment discount and a 0.25% interest rate reduction while enrolled in automatic payments.
4 Important Disclosures for CommonBond.
Offered terms are subject to change and state law restrictions. Loans are offered through CommonBond Lending, LLC (NMLS #1175900).
5 Important Disclosures for Citizens.
Undergraduate Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of October 1, 2019, the one-month LIBOR rate is 2.05%. Variable interest rates range from 3.15% – 11.41% (3.15% – 11.26% APR) and will fluctuate over the term of the loan with changes in the LIBOR rate, and will vary based on applicable terms, level of degree earned and presence of a co-signer. Fixed interest rates range from 4.72% – 12.19% (4.72% – 12.04% APR) based on applicable terms, level of degree earned and presence of a co-signer. Lowest rates shown requires application with a co-signer, are for eligible applicants, require a 5-year repayment term, borrower making scheduled payments while in school and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Citizens Bank is required to provide every potential borrower with disclosure information before they apply for a private student loan. The borrower will be presented with an Application Disclosure and an Approval Disclosure within the application process before they accept the terms and conditions of the loan.
Citizens Bank Student Loan Eligibility: Borrowers must be enrolled at least half-time in a degree-granting program at an eligible institution. Borrowers must be a U.S. citizen or permanent resident or an international borrower/eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For borrowers who have not attained the age of majority in their state of residence, a co-signer is required. Citizens Bank reserves the right to modify eligibility criteria at anytime. Interest rate ranges subject to change. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/consumer credit agreement, verification of application information, and if applicable, self-certification form, school certification of the loan amount, and student’s enrollment at a Citizens Bank- participating school.
Please Note: International Students are not eligible for the multi-year approval feature.
|3.70% – 11.98%1||Undergraduate, Graduate, and Parents|
|3.25% – 10.65%*,2||Undergraduate and Graduate|
|3.37% – 11.87%3||Undergraduate and Graduate|
|3.52% – 9.50%4||Undergraduate and Graduate|
|3.15% – 11.41%5||Undergraduate and Graduate|