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A guide to understanding college financial aid and FAFSA

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 It’s FAFSA season! In addition to the new year, college acceptance letters, and snow showers, every January, as a college and career counselor, I look forward to helping my students complete this financial aid form.

I do understand if you're not excited about this. For some, the FAFSA document can be intimidating: There are a number of sections, for both students and parents; you must submit personal and financial information; and you have no idea who’s reading your application. But here’s what I know about the FAFSA. Over the years, the federal government has made it easier to access and complete. With electronic delivery, color-coded sections, and smart features that will bypass unnecessary questions, most people are done with the form in 20 minutes or less. 

Still, first-time users might have some concerns. That’s why I’m breaking down the basics of applying for financial aid.

Understanding the basics

What does FAFSA mean? 

FAFSA is an acronym for Free Application for Federal Student Aid. The key word here is "free." Don't get tricked by for-profit companies with deceiving web addresses. They will ask for credit card information, and that’s a no-no. To complete the application, go to FAFSA’s official website,

Who should submit the FAFSA? 

Any student in need of financial aid should submit the FAFSA each year they are studying, full-time or half-time. This form offers some type of aid to every U.S. citizen regardless of how high household income might be.

*Note: Students who are not U.S. citizens might also qualify for federal aid. Check out this article to learn more.

Which form do we complete? 

Make sure your student creates an account and files a FAFSA for the "2016-2017" school year. You are choosing the school year that your child will be enrolled in college, NOT completing high school.

How do we submit? 

A new security feature, started in May 2015, is the Federal Student Aid (FSA) ID & password. The FSA ID and FSA password replaced the old FAFSA PIN number that also required a Social Security Number to accompany it. Both parent and student will need to create FSA ID and passwords and use them to sign (electronically) the application for submission.

Understanding the formula

How does the government determine how much  money my child gets? 

FAFSA is the form used to assess a family's Expected Family Contribution (EFC). This is the number that the federal government thinks parents should be able to contribute to their child’s education. They use a formula that takes into consideration the following factors:

  • Annual household income.
  • Number of dependents in the household.
  • Number of family members who will be enrolled in college.
  • Value of available assets.
  • Student's yearly income and assets.

How will I know how much I have to pay toward my child’s education? 

After the FAFSA is submitted, you will see your Student Aid Report (SAR). The SAR is a transcript of what was entered on the FAFSA and will report the Expected Family Contribution for the student. This form should also be sent to your email address, which you provide when completing the FAFSA. Hold on to this Student Aid Report, because your child might need it to apply for need-based scholarships.

Understanding types of aid

Completing the FAFSA allows students and parents to access different types of financial aid, listed below. Not every student will be eligible for grant money, but loans are offered, in different amounts, to everyone.

Pell grants – This money is first come, first served. If a student qualifies for a Pell Grant and it is awarded, it is completely free and does not have to be repaid. If the family's Expected Family Contribution stays the same throughout the course of the student's college career, this money will continue to be made available, but the amount can vary.

Subsidized student loans – This is the best type of loan, because the interest that accrues is paid by the federal government while the student pursues full-time study in college. This lowers the amount of debt that needs to be repaid after graduation.

Unsubsidized student loans – These are more traditional student loans. The interest will accrue during full-time study, and students are expected to repay all principal and interest. The upside of federal loans is that they have lower interest rates and better repayment terms than private student loans. The government will give students a six-month grace period after graduation before any loan payments need to be made.

Parent Plus loans – The key word here is "parent." This loan offer is the only one that holds parents responsible for its repayment. The government will offer parents this option when the family qualifies for little or no grant money. The perk is that the interest rate is lower than private loans. 

Work-Study – This form of aid is unique because it is not a loan, grant, or scholarship. The Work-Study program is financial aid that students can earn through hours worked on-campus or at a local nonprofit organization. Students will receive their aid in the form of a paycheck in exchange for their service at their work-study job.

Pennsylvania Higher Education Assistance Agency – PHEAA provides grant money to any student who is eligible for the Federal Pell Grant. PHEAA will award up to $4,000 in grant money to Pennsylvania residents who show financial need. The catch is that PHEAA money is intended to be applied to a college, tech/trade school, or university within the state of Pennsylvania. Students who are eligible for PHEAA might lose their award or have it reduced to $500 if they go to college out of state.

Do you still have lingering questions about the FAFSA? Hopefully, this FAFSA worksheet will give you more insight. You can download it and fill it out, so that you know you are prepared for the real thing.

Do you have a question about college preparation or scholarships? Email your questions to


Melissa A. Rowe, M.Ed., is founder of Capture Greatness! A Scholarship Writing & College Coaching Initiative. As a writer, education advocate, and college counselor, she teaches young people how to write effectively to fund their college educations. A Philadelphia native, with more than a decade of  experience in education, Rowe has held positions in schools, colleges, and out-of-school-time programs. Recently, she was recognized by WHYY for her work with students from  under-resourced schools. 


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