Seeking financial aid? Start with the FAFSA

Going to college is an incredible investment in your future. Research shows that, on average, college graduates earn $900,000 more than high school graduates during their careers.

While college poses a significant expense, financial aid can make higher education more affordable.

Wondering how much financial aid you might be eligible for? Read on to learn about the types of financial aid available and how the information you include on your Free Application for Federal Student Aid (FAFSA^®) determines the amount of financial aid you can receive.

When it comes to financial aid, there are several different types:

• Grants: Offered by the federal government, states, and some universities, grants are a form of free money. That means you don't have to repay any grants awarded to you. Examples include the Federal Pell Grant and Federal Supplemental Educational Opportunity Grant (FSEOG).
• Scholarships: As with grants, you don't have to repay scholarships. Schools, nonprofit organizations, and private companies offer scholarships.
• Work-study programs: You may qualify for a federal work-study program where the income from a part-time job is used to pay for a portion of your education.
• Student loans (federal and private): You could be eligible for federal or private student loans to finance the rest of your education.

The Free Application for Federal Student Aid — more commonly known as the FAFSA — is a form that college-bound students and their families complete to apply for federal grants, loans, and work-study for a given academic year. It determines the type of aid — and how much — a family is eligible for.

Administered by the U.S. Department of Education, the FAFSA is also used by state governments, colleges, private organizations, and career schools to help them determine whether a student is eligible for their own financial aid.

Why fill out the FAFSA? Expecting to cover the entire cost of college out of pocket — through 529 savings and in-school payment plans — isn’t realistic. Chances are, at some point you’ll need grants, loans, or work-study to cover the leftover cost. Therefore, always complete the FAFSA — even if you don’t expect to qualify for aid — to be eligible for any grants, federal student loans, or work-study during the year.

Both the student and their parents/guardians fill out the same FAFSA form. The FAFSA will request important information from both parties.

Here’s a sample of the personal and financial information college students and their parents/guardians need to submit:

• Social Security Number
• Alien Registration Number (if the student is not a U.S. Citizen)
• Driver’s license number (if applicable)
• Tax information: Federal income tax returns, W-2s, and other records of money earned
• Bank statements and records of investments (if applicable)
• Records of untaxed income (if applicable)

In order to have the FAFSA information sent to the schools the student is considering, each school should be entered on the FAFSA form — even if the student isn't certain they plan to apply. If the student decides not to apply to a school they listed on the FAFSA, the school will simply disregard the information.

The easiest way to complete the form is online. It’s much quicker than printing out the FAFSA and filling it out by hand — and your information will be saved, making completing the renewal form a piece of cake.

If you really want to fill out the physical form, you’ll need to download and complete the form, then mail it to:

Federal Student Aid Programs
P.O. Box 7650
London, KY 40742-7650

Just make sure the form you fill out is for the correct academic year — and be sure you allow enough time for the form to arrive and still meet the deadlines (more on those next).

The FAFSA is available starting October 1 before the applicable academic year.

However, the deadline to submit the FAFSA isn’t as cut and dry. The official deadline is June 30, but that’s only if you want to be eligible for federal aid. State governments, colleges, and other organizations also use the FAFSA to determine eligibility for their own aid — and each one has different deadlines. Therefore, you should submit your FAFSA as soon as possible, especially since some colleges limit how much aid they award for a given year and dole it out on a first come, first serve basis.

You can find your state’s deadline here. Schools typically list their deadlines on their websites; you can also contact your school’s financial aid office.

NOTE: You’ll have to fill out the FAFSA every year you want to be eligible for aid. That means you would fill out the FAFSA four times during a standard four-year course of study.

The FAFSA uses the information on the application to determine your Expected Family Contribution (EFC). This is how much the U.S. Department of Education states a family can afford to pay for their child’s college for that academic year.

Then, the EFC is subtracted from each listed school’s Cost of Attendance (COA), which is the total bill for a school’s academic year. A college’s COA is an official number that is determined by the school itself. What’s left over is the amount of aid a family is eligible to receive for that school year.

Each college’s COA changes year to year. Plus, a family’s EFC could change, like if a parent’s income changes or another child is also attending college that year. That’s why families need to fill out the FAFSA for every academic year because their aid eligibility can change.

After the FAFSA is submitted, a Student Aid Report (SAR) — a summary of the FAFSA data submitted — will be emailed to the addresses listed on the FAFSA. The SAR can take anywhere from three days to three weeks to receive. If no email address is listed, the SAR will be delivered through the mail to the addresses provided on the application.

Then comes the waiting game! Eventually, families will learn how much aid they’ve received through the financial aid award packages that trickle in with acceptance letters.

According to The College Board, the average full-time undergraduate student received $14,796 in total financial assistance for the 2017-2018 school year. But how much assistance you actually receive depends on several factors, including your family's income and whether you have siblings in college.

When a school accepts you, the financial aid office will calculate your total cost of attendance, including tuition, fees, room and board, and textbooks. Then, the financial aid staff will look at your Expected Family Contribution, which you receive when you complete the FAFSA. They'll subtract your EFC from your cost of attendance to determine your financial need.

Your financial aid package may include a mix of need-based aid, non-need based aid — like scholarships — and student loans.

As a student, you’ll likely want to get an idea of what financial aid to expect so you can budget accordingly. Luckily, there's a tool to find out how much aid your family is eligible for before you’re ready to enroll in school. You can use the Expected Family Contribution (EFC) Calculator to get an estimate of your eligibility for federal student aid. Just enter basic information, including your date of birth, grade level in college, household income (both yours and your parents’), and the number of people in your household, and the EFC will provide an overview of the financial aid you may qualify to receive.

Citizens is here to help you navigate your student lending options for today and the future. Make sure to visit our Student Lending page — we’re on chat.**