4 Major Ways the FAFSA Can Help You Pay for College

Rebecca Safier
February 22, 2021February 22, 2021Paying for CollegeBig Money Decisions, Featured1152Rebecca Safier
Updated on  February 22, 2021
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Private Student Loan rates starting at 2.49% APR

2.49% to 13.85% 1
VARIABLE APR

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2.55% to 11.44% 2
VARIABLE APR

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3.25% to 13.59% 3
VARIABLE APR

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1Important Disclosures for College Ave.

College Ave Disclosures

College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community 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. As certified by your school and less any other financial aid you might receive. Minimum $1,000.
     
  2. Rates shown are for the College Ave Undergraduate Loan product and include autopay 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.
     
  3. 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.

Information advertised valid as of 9/15/2022. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.



2Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 3.47% APR to 13.03% APR (excludes 0.25% Auto Pay discount). Variable rates range from 2.80% APR to 11.69% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.



3Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

  • Variable APR
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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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How Student Loan Hero Gets Paid

How Student Loan Hero Gets Paid

Student Loan Hero is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). Student Loan Hero does not include all lenders, savings products, or loan options available in the marketplace.

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Student Loan Hero is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

How Student Loan Hero Gets Paid

How Student Loan Hero Gets Paid

Student Loan Hero is compensated by companies on this site and this compensation may impact how and where offers appear on this site (such as the order). Student Loan Hero does not include all lenders, savings products, or loan options available in the marketplace.

Advertiser Disclosure

Student Loan Hero Advertiser Disclosure

Student Loan Hero is an advertising-supported comparison service. The site features products from our partners as well as institutions which are not advertising partners. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

Variable APRDegrees That QualifyMore Info
2.49% – 13.85%1 Undergraduate
Graduate

Visit College Ave

2.55% – 11.44%2 Undergraduate
Graduate

Visit Earnest

3.25% – 13.59%3 Undergraduate
Graduate

Visit SallieMae

0.00% – 23.00%4 Undergraduate
Graduate

Visit Edly

3.25% – 9.69%5 Undergraduate
Graduate

VISIT CITIZENS

N/A 6 Undergraduate
Graduate

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Learn more about private student loan lenders.
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1Important Disclosures for College Ave.

College Ave Disclosures

College Ave Student Loans products are made available through Firstrust Bank, member FDIC, First Citizens Community 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. As certified by your school and less any other financial aid you might receive. Minimum $1,000.
     
  2. Rates shown are for the College Ave Undergraduate Loan product and include autopay 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.
     
  3. 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.

Information advertised valid as of 9/15/2022. Variable interest rates may increase after consummation. Approved interest rate will depend on the creditworthiness of the applicant(s), lowest advertised rates only available to the most creditworthy applicants and require selection of full principal and interest payments with the shortest available loan term.



2Rate range above includes optional 0.25% Auto Pay discount. Important Disclosures for Earnest.

Earnest Disclosures

Actual rate and available repayment terms will vary based on your income. Fixed rates range from 3.47% APR to 13.03% APR (excludes 0.25% Auto Pay discount). Variable rates range from 2.80% APR to 11.69% APR (excludes 0.25% Auto Pay discount). Earnest variable interest rate student loan refinance loans are based on a publicly available index, the 30-day Average Secured Overnight Financing Rate (SOFR) published by the Federal Reserve Bank of New York. The variable rate is based on the rate published on the 25th day, or the next business day, of the preceding calendar month, rounded to the nearest hundredth of a percent. The rate will not increase more than once per month. Although the rate will vary after you are approved, it will never exceed 36% (the maximum allowable for this loan). Please note, Earnest Private Student Loans are not available in Nevada. Our lowest rates are only available for our most credit qualified borrowers and contain our .25% auto pay discount from a checking or savings account. It is important to note that the 0.25% Auto Pay discount is not available while loan payments are deferred.



3Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

4Important Disclosures for Edly.

Edly Disclosures

1. Loan Example:

  • Loans from $5,000 – $20,000
  • Example: $10,000 IBR Loan with a 7% gross income payment percentage for a Senior student making $65,000 annually throughout the life of the loan.
    • Payments deferred for the first 12 months during final year of education.
    • After which, $270 Monthly payment for 12 months.
    • Then $379 Monthly payment for 44 months.
    • Followed by one final payment of $137 for a total of $20,610 paid over the life of the loan.

About this example

The initial payment schedule is set upon receiving final terms and upon confirmation by your school of the loan amount. You may repay this loan at any time by paying an effective APR of 23%. The maximum amount you will pay is $22,500 (not including Late Fees and Returned Check Fees, if any). The maximum number of regularly scheduled payments you will make is 60. You will not pay more than 23% APR. No payment is required if your gross earned income is below $30,000 annually or if you lose your job and cannot find employment.

2. Edly Student IBR Loans are unsecured personal student loans issued by FinWise Bank, a Utah chartered commercial bank, member FDIC. All loans are subject to eligibility criteria and review of creditworthiness and history. Terms and conditions apply.



5Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  • Variable Rate Disclosure: Variable interest rates are based on the 30-day average Secured Overnight Financing Rate (“SOFR”) index, as published by the Federal Reserve Bank of New York. As of September 1, 2022, the 30-day average SOFR index is 2.23%. Variable interest rates will fluctuate over the term of the loan with changes in the SOFR index, and will vary based on applicable terms, level of degree and presence of a co-signer. The maximum variable interest rate is the greater of 21.00% or the prime rate plus 9.00%.
  • Fixed Rate Disclosure: Fixed rate ranges are based on applicable terms, level of degree, and presence of a co-signer.
  • Lowest Rate Disclosure: Lowest rates are only available for the most creditworthy applicants, require a 5-year repayment term, immediate repayment, a graduate or medical degree (where applicable), 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. Rates are subject to additional terms and conditions, and are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.

     

    Undergraduate Rate Disclosure: Variable interest rates range from 3.25%-10.35% (3.25% – 9.69% APR). Fixed interest rates range from 4.24% – 10.59% (4.24% – 9.93% APR). 

    Graduate Rate Disclosure: Variable interest rates range from 3.75%-9.90% (3.75% – 9.68% APR). Fixed interest rates range from  5.22% – 10.14% (5.22% – 9.91% APR). 

    Business/Law Rate Disclosure: Variable interest rates range from 3.75%-9.35% (3.75% – 9.16% APR). Fixed interest rates range from 5.20% – 9.59% (5.20% – 9.39% APR).

    Medical/Dental Rate Disclosure: Variable interest rates range from 3.75%-9.02% (3.75% -8.98% APR). Fixed interest rates range from 5.18% – 9.26% (5.18% – 9.22% APR). 

    Parent Loan Rate Disclosure: Variable interest rates range from 3.25%-9.21% (3.25% – 9.21% APR). Fixed interest rates range from 3.96%-9.50% (3.96%-9.50% APR).

    Bar Study Rate Disclosure: Variable interest rates range from 6.58%-11.72% (6.58% – 11.62% APR). Fixed interest rates range from 7.39% – 12.94% (7.40% – 12.82% APR). 

    Medical Residency Rate Disclosure: Variable interest rates range from 5.67%-9.17% (5.67% – 8.76% APR). Fixed interest rates range from 6.99% – 10.49% (6.97% – 10.08% APR).



6Important Disclosures for FundingU.

FundingU Disclosures

Offered terms are subject to change. Loans are made by Funding University which is a for-profit enterprise. Funding University is not affiliated with the school you are attending or any other learning institution. None of the information contained in Funding University’s website constitutes a recommendation, solicitation or offer by Funding University or its affiliates to buy or sell any securities or other financial instruments or other assets or provide any investment advice or service.