| Student loans in the U.S. |
| Regulatory framework |
|---|
| Higher Education Act of 1965 U.S. Dept. of Education FAFSA · Cost of attendance |
| Distribution channels |
| Federal Direct Student Loan Program Federal Family Education Loan Program |
| Loan products |
| Perkins · Stafford PLUS · Consolidation Loans |
The Free Application for Federal Student Aid (known as the FAFSA) is a form that can be prepared annually by current and prospective college students (undergraduate and graduate) in the United States to determine their eligibility for student financial aid (including the Pell Grant, Federal student loans and Federal Work-Study).[1]
Despite its name, the application is not for a single federal program, being rather the gateway of consideration for:
The U.S. Department of Education begins accepting the application beginning January 1 of each year for the upcoming academic year. Each application period is 18 months; most federal, state, and institutional aid is provided on a first come, first served basis. Students are advised to submit a FAFSA as early as possible for consideration for maximum financial assistance.
Applicants who have completed a FAFSA in previous years may submit a renewal FAFSA. Any information that has changed must be updated annually. The FAFSA consists of numerous questions (at least 130 for the 2010–2011 academic year) regarding a student's (and his or her family's) assets, income, and dependency. These are entered into a formula that determines the Expected Family Contribution (EFC). A number of factors are used in determining the EFC including the household size, income, number of students from household in college and assets (not including retirement and 401(k) funds). This information is required because of the expectation that parents will contribute to their child's education, whether that is true or not.
The FAFSA does not have questions related to student or family race, ethnicity, sexual orientation, disability, or religion.
A Student Aid Report (SAR), which is a summary of the FAFSA responses, is forwarded to the student. The student should review the SAR carefully for errors and make any corrections. An electronic version of the SAR (called an ISIR) is made available to the colleges/universities the student selects on the FAFSA. The ISIR is also sent to state agencies that award need-based aid.
Some colleges also require the CSS Profile to be filled out as early as the same deadline as an early admissions or early decision application deadline. The CSS is a fee-based product of the College Board and usually concerns funds disbursed by a college rather than federal funds.
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Nearly every student is eligible for some form of financial aid. Students who may not be eligible for need-based aid may still be eligible for an unsubsidized Stafford Loan regardless of income or circumstances.
A student who can meet the following criteria may be eligible for aid:
Student Aid and Fiscal Responsibility Act (SAFRA) changes the criteria for suspension of eligibility for drug-related offenses. Previously, students could lose eligibility for either the possession or sale of a controlled substance during the period of enrollment. SAFRA drops the penalties for possession of a controlled substance but retains the penalties for sale of a controlled substance. SAFRA increases the suspension to two years for a first offense and indefinite for a second offense.
Students who are military veterans and active duty service members may apply for financial aid by filing a FAFSA even if they also apply for education and housing benefits offered by the Post-9/11 G.I. Bill and its accompanying Yellow Ribbon program. The amount of military aid a student receives for a college education does not defer eligibility or reduce the amount of student aid that student could receive from the four federal grant programs – Pell, SMART, FSEOG, and TEACH – and many of the state student aid programs.
FAFSA has several different types of financial aid. The four most common types of aid:
Students have three options when preparing their annual federal student aid application: file the form on the U.S. Department of Education's website, complete and mail a paper copy of the form, or get help from a professional fee-based preparer. The Higher Education Opportunity Act of 2008 authorized fee-based FAFSA preparation. (The options are much like those for taxpayers who may either prepare their own income tax forms or get assistance from professional tax-preparation services or software.)[2] Fee-based preparation of the aid form had been allowed as early as 1995. HEOA formalized the option in 2008.