4 Major Ways the FAFSA Can Help You Pay for College

 February 22, 2021
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FAFSA how to Pay for College

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The Free Application for Federal Student Aid (FAFSA) opens the door to federal student aid, which includes grants and low-rate student loans. If you’re wondering how to pay for college, the FAFSA can help you score financial aid from a variety of sources.

Since financial need isn’t necessarily a requirement for aid, everyone who’s planning on college or graduate school should submit the FAFSA.

How can the FAFSA help me? 4 major ways

If you’re thinking about how to pay for college, check out these four ways the FAFSA can help:

1. The FAFSA grants access to federal, state and school-based financial aid
2. The FAFSA reveals your Expected Family Contribution (EFC)
3. Some scholarship organizations also consider your FAFSA
4. The FAFSA can get you more money if your financial situation changes
● Plus: Final thoughts on how to pay for college by submitting the FAFSA

1. The FAFSA grants access to federal, state and school-based financial aid

The FAFSA can help you pay for college, but what is the FAFSA, exactly?

Well, imagine that all the money you need to pay for college is sitting behind a locked door. To unlock it, you’ll need the Free Application for Federal Student Aid, or FAFSA.

As the name implies, you can fill it out for free on the Federal Student Aid website. This straightforward application asks for personal information, along with data on your parents’ income, tax status and assets.

You’ll also need to meet a few basic FAFSA requirements, such as:

  • Being a U.S. citizen or eligible noncitizen
  • Being on track for your high school diploma (or having already graduated with it)
  • Being accepted at an eligible Title IV school (if you’re a high school senior, you’ll find out if you got accepted a few months after submitting the FAFSA)
  • Maintaining satisfactory academic progress (if your GPA falls too low in college, you’ll lose your eligibility for federal student aid)

Your college puts together your financial aid package

The Office of Federal Student Aid looks at the FAFSA to determine how much your family can pay for college. Then, each college that accepts you uses the FAFSA to put together your financial aid award. Every college has a different budget, so your financial aid package will look different from one school to another. At one school, you might get loads of grants and scholarships, while another might only offer student loans that you’ll have to pay back.

The majority of this aid will come from the federal government, but some might come from your state or even the college itself. Note that some colleges require an additional form, known as the CSS Profile, before doling out their own grants or loans.

Although all this behind-the-scenes work of putting together your financial aid packages is complicated, you and your parents only have to worry about one main thing: Filling out and submitting the FAFSA.

2. The FAFSA reveals your Expected Family Contribution (EFC)

Although your financial aid offers might vary from school to school, one point will stay the same: Your Expected Family Contribution, or EFC. Your EFC is the amount your family is expected to be able to pay toward college.

Note that the term Expected Family Contribution will be replaced by the term Student Aid Index (SAI) starting on the 2022 FAFSA. While colleges will still look at your SAI to determine your financial aid, this name change takes away the expectation that your parents are helping you pay for college (or can afford to cover the calculated amount).

Currently, however, colleges look at your EFC to determine your eligibility for financial aid. For example, let’s say a college costs $32,000 per year, and your annual EFC is $20,000. In this case, you would have a $12,000 gap in funding.

Some colleges, such as Bowdoin and Brown, generously fill in this gap with grants and scholarships, while others will offer you a mix of grants and loans. Schools with smaller budgets might not be able to fill in the entire gap with federal financial aid.

If that’s the case, you’ll have to take extra steps as you figure out how to pay for college. You could apply for a private student loan for extra funding, or you might choose a different school with lower tuition costs.

Note that you should fill out the FAFSA even if your family has a high income, since not all aid is based on financial need. Plus, you’ll need a completed FAFSA on file in case your family’s financial situation changes in the future.

Even if you don’t think you’ll qualify for financial aid, it’s a good idea to submit the FAFSA every year you’ll be attending college.

3. Some scholarship organizations also consider your FAFSA

Colleges aren’t the only institutions that look at your FAFSA before granting you financial aid. Some private scholarship organizations are also interested in your EFC.

Scholarship organizations like the Davis-Putter Scholarship Fund and The Bonner Scholar Program select students who, along with meeting other requirements, demonstrate financial need.

Each scholarship organization sets its own criteria for awards. Some look for outstanding students or star athletes. Others seek students who volunteer in their communities or show impressive artistic ability. There are also some that are fairly random, and celebrate students who love Star Trek or make their prom outfit out of duct tape, to give a couple of examples.

People on these scholarship committees probably care more about your transcript or personal essay than your financial situation. But committees that look for students with financial need will pay attention to your FAFSA. So if you’re applying to need-based scholarships, make sure to submit the FAFSA on time.

4. The FAFSA can get you more money if your financial situation changes

The FAFSA helps you get financial aid before the school year starts, but what if your financial situation changes halfway through?

Whether you get a new sibling or a parent loses their income, you can edit the FAFSA to reflect your new circumstances. In fact, you’re expected to do so if something major changes in your household.

You should also get in touch with your school’s financial aid office to alert them of the changes. If you find yourself needing more support during the year than when you started, the FAFSA can help you gain more financial aid.

Final thoughts on how to pay for college by submitting the FAFSA

To gain access to most forms of financial aid, you’ll need to fill out the FAFSA. Submit it every year as close to Oct. 1 as possible to maximize your chances for aid.

Once you’ve submitted the form, you’ll have to wait to get your financial aid award letters. In the meantime, seek out scholarship opportunities for extra funding. To get started, check out these scholarship search engines.

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