Getting Started with Federal Student Aid

All students should start their college funding search with federal student aid. It is the most widely accessible type of aid, available to all United States citizens and permanent residents. The federal government awards many types of grants, which you don't need to repay, and loans, which you will need to repay. In addition, the government partners with individual schools to provide work-study aid, which pays you for part-time work on or near campus.

Many students find that federal aid awards are able to provide much of the money needed to pay for higher education. In addition, colleges use information you submit on the FAFSA (Free Application for Federal Student Aid) to help them award additional financial aid. You could be eligible to receive grants and scholarships from your college that you didn't even know about! It all starts with the application for federal student aid, so that's where you should start too.

Dependency Status

Before applying for federal student aid, it helps to get a big picture understanding of what the government is looking for in the application. First, the FAFSA helps determine whether you are a dependent or independent student. In general, you are considered a dependent student unless you are at least 24 years old (or will turn 24 before the end of the year), are in graduate school, are married, provide at least half of the support for a child or dependent, or have served in active duty military. Dependent students need to provide information about their parents' income and assets, but independent students do not.

Estimated Family Contribution

The information you provide on the FAFSA is largely used to calculate your Estimated Family Contribution (EFC). This is the amount that you (and your parents if you are a dependent student) should be able to contribute to educational expenses from savings and income. It is based on a complex mathematical formula and does not mean that you are required to pay this amount to go to college. Some factors that affect your EFC include income, assets, family size, and the number of family members in college.

Financial Need

Your EFC is then used to determine your financial need, which is an estimate of the amount of money you would need to attend a particular college for one school year. First, your college calculates your total estimated Cost of Attendance (COA). This number includes tuition, room, board, books, travel, and some personal expenses. The college then calculates your financial need by subtracting your EFC from your COA. For example, if your EFC is $5,000 but your COA is $20,000, then you have $15,000 of financial need.

Your financial aid package will be largely based on how much financial need you have. Some types of federal financial aid, like Pell Grants and subsidized Direct Loans, are only available to students with a greater amount of financial need. However, the federal government also offers other types of financial aid, including low-interest student loans, to students who do not have any financial need. Therefore, you should definitely fill out the FAFSA if you want assistance paying for college.


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