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 0.94% APR

1.19% to 11.98% 1
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1.62% to 11.73% 2
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0.94% to 11.44% 3
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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.

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.

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. This informational repayment example uses typical loan terms for a first year graduate student 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 7.10% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $141.66 while in the repayment period, for a total amount of payments of $16,699.21. 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 4/19/2022. 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.



2Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

3Rate 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 3.49% APR to 13.03% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.19% APR to 10.14% 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.



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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.

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1.19% – 11.98%1 Undergraduate
Graduate

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1.62% – 11.73%2 Undergraduate
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0.94% – 11.44%3 Undergraduate
Graduate

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1.64% – 11.45%4 Undergraduate
Graduate

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1.89% – 11.92%5 Undergraduate
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N/A 6 Undergraduate
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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.

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.

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. This informational repayment example uses typical loan terms for a first year graduate student 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 7.10% fixed Annual Percentage Rate (“APR”): 120 monthly payments of $141.66 while in the repayment period, for a total amount of payments of $16,699.21. 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 4/19/2022. 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.



2Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.

3Rate 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 3.49% APR to 13.03% APR (excludes 0.25% Auto Pay discount). Variable rates range from 1.19% APR to 10.14% 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.



4Important Disclosures for Ascent Student Loans.

Ascent Student Loans Disclosures

Ascent loans are funded by Bank of Lake Mills, Member FDIC. Loan products may not be available in certain jurisdictions. Certain restrictions, limitations; and terms and conditions may apply. For Ascent Terms and Conditions please visit: AscentFunding.com/Ts&Cs

Rates are effective as of 05/01/2022 and reflect an automatic payment discount of either 0.25% (for credit-based loans) OR 1.00% (for undergraduate outcomes income-based loans). Automatic Payment Discount is available if the borrower is enrolled in automatic payments from their personal checking account and the amount is successfully withdrawn from the authorized bank account each month. For Ascent rates and repayment examples please visit: AscentFunding.com/Rates.

1% Cash Back Graduation Reward subject to terms and conditions, please visit AscentFunding.com/Cashback. Cosigned Credit-Based Loan student borrowers must meet certain minimum credit criteria. The minimum score required is subject to change and may depend on the credit score of your cosigner. Lowest APRs are available for the most creditworthy applicants and may require a cosigner.



5Important Disclosures for SoFi.

Sofi Disclosures

UNDERGRADUATE LOANS: Fixed rates from 3.47% to 11.16% annual percentage rate (“APR”) (with autopay), variable rates from 1.89% to 11.92% APR (with autopay). GRADUATE LOANS: Fixed rates from 4.60to 11.06% APR (with autopay), variable rates from 2.59% to 11.82% APR (with autopay). PARENT LOANS: Fixed rates from 4.48% to 11.16% APR (with autopay), variable rates from 1.69% to 11.92% APR (with autopay). For the SoFi variable-rate product, the variable interest rate for a given month is derived by adding a margin to the 30-day average SOFR index, published two business days preceding such calendar month, rounded up to the nearest one hundredth of one percent (0.01% or 0.0001). APRs for variable-rate loans may increase after origination if the SOFR index increases. Interest rates for variable rate loans are capped at 13.95%, unless required to be lower to comply with applicable law. Lowest rates are reserved for the most creditworthy borrowers. If approved for a loan, the interest rate offered will depend on your creditworthiness, the repayment option you select, the term and amount of the loan and other factors, and will be within the ranges of rates listed above. The SoFi 0.25% autopay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account. Information current as of 05/04/2022. Enrolling in autopay is not required to receive a loan from SoFi. Loans originated by SoFi Lending Corp. or an affiliate (dba SoFi), licensed by the Department of Financial Protection and Innovation under the California Financing Law License No. 6054612. NMLS #1121636 (www.nmlsconsumeraccess.org).



6Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

Undergraduate Rate Disclosure: Fixed interest rates range from 3.48% – 11.64% (3.48% – 10.78% APR).

Graduate Rate Disclosure: Fixed interest rates range from 4.89% – 11.64% (4.89% – 11.34% APR).

Business/Law Rate Disclosure: Fixed interest rates range from 4.49% – 10.39% (4.49% – 9.68% APR).

Medical/Dental Rate Disclosure: Fixed interest rates range from 4.43% – 9.19% (4.44% – 8.89% APR).

Parent Loan Rate Disclosure: Fixed interest rates range from 4.80%-8.23% (4.80%-8.24% APR).

Bar Study Rate Disclosure: Fixed interest rates range from 7.39% – 12.94% (7.40% – 12.83% APR).

Medical Residency Rate Disclosure: Fixed interest rates range from 6.99% – 10.49% (6.98% – 10.09% APR).

ERL 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 May 1, 2022, the 30-day average SOFR index is 0.29%. 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.

Federal Loan vs. Private Loan Benefits: Some federal student loans include unique benefits that the borrower may not receive with a private student loan, some of which we do not offer.  Borrowers should carefully review federal benefits, especially if they work in public service, are in the military, are considering possible loan forgiveness options, are currently on or considering income based repayment options or are concerned about a steady source of future income and would want to lower their payments at some time in the future. When the borrower refinances, they waive any current and potential future benefits of their federal loans. For more information about federal student loan benefits and federal loan consolidation, visit http://studentaid.ed.gov/. We also have several resources available to help the borrower make a decision on our website including Should I Refinance My Student Loans? and our FAQs. Should I Refinance My Student Loans? includes a comparison of federal and private student loan benefits that we encourage the borrower to review.

Eligibility Criteria: Applicants must be a U.S. citizen, permanent resident, or eligible non-citizen with a creditworthy U.S. citizen or permanent resident co-signer. For applicants 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 any time. Citizens Bank private student loans are subject to credit qualification, completion of a loan application/Promissory Note, 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.

Loyalty Discount Disclosure: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower or their co-signer (if applicable) has a qualifying account in existence with us at the time the borrower and their co-signer (if applicable) have submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, or other student loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI, and VT and some products may have an associated cost. This discount will be reflected in the interest rate disclosed in the Loan Approval Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.

Automatic Payment Discount Disclosure: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their student loans owned by Citizens Bank, N.A. during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. Discount is not available when payments are not due, such as during forbearance. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account three or more times within any 12-month period, the borrower will no longer be eligible for this discount.