Why Federal Student Aid is Important
Updated By Staff Writer on December 2, 2020
You’ve been hearing lots of talk about filling out FAFSA, but you’re not sure what the big deal is. With so much on your plate already, is it really something you need to worry about? What do you need for FAFSA, and how long does it take to complete FAFSA?
Check out our guide to learn all about the types of federal student aid and why filling out FAFSA is so important.
What Is Federal Student Aid?
Let’s start with the basics. What is federal student aid, and what does FAFSA stand for? FAFSA is an acronym for Free Application for Federal Student Aid. The U.S. Department of Education reviews this application to decide whether or not you’re eligible for federal student aid such as loans, grants, or work-study. This form might also be used for determining state and school financial aid.
Why Federal Student Aid Is Important
Knowing what FAFSA is used for makes it easy to see why federal aid is important to your educational experience. Having the funding to get through college takes a load of stress off your mind as you go through your everyday assignments. You’ll be able to get the degree to launch your career—without worrying so much about how you’ll afford it.
Federal student aid offers lower interest rates, convenient repayment plans, and other benefits that are hard to find elsewhere. Here are some of the other reasons why the filing of FAFSA in a timely manner is so crucial.
1. Loan Deferment
It’s true—Federal Stafford Loans offer the luxury of deferring your loan payments while you remain active in school. Pell Grants are another great benefit offered to many students by the government. These loans don’t need to be repaid at all—but you do need to make sure you keep up your grades to remain eligible for either type of loan.
2. Deadlines for Funding
There are deadlines for completion of FAFSA, and if you wait too long to complete it, you could miss out on any Pell Grant or Stafford Loan money you may have qualified for to help pay for school.
For this reason, we want to stress the importance of completing FAFSA as soon as possible. If you need to file taxes, please be sure to do that first, as tax information is a required part of your FAFSA application.
3. Demonstrate Responsibility
Staying on top of your financial aid shows that you are serious about your education. Each year a new FAFSA application is available at www.fafsa.ed.gov and is required to be completed by all students receiving federal aid.
What Are the Types of Federal Student Aid?
Now that you understand the importance of filling out your FAFSA form, you may be wondering: what are the types of federal student aid available to you? And which sources of federal aid do you have to repay?
The U.S. Department of Education offers three types of financial aid:
- Grants: A grant is a financial gift that does not need to be paid back at the end of your schooling. The most common type of grant for undergraduates is known as a Federal Pell Grant. Students with greater financial needs may be eligible for a Federal Supplemental Educational Opportunity Grant (FSEOG).
- Loans: The government allows students to borrow money at a lower cost than other types of loans. This money must be repaid with interest after you finish school. Some of the most common types of loans include direct subsidized or unsubsidized loans.
- Work-study programs: These are federally funded work programs that allow both undergraduate and graduate students to work specific jobs and earn money to put toward their tuition.
Who Is Eligible for Federal Student Aid?
Federal student aid sounds like an incredible opportunity, right? But can any college student apply? Who is eligible for federal student aid?
Certain undergraduate and graduate students are eligible for federal student aid. To meet the requirements, you must:
- Have a financial need.
- Be a U.S. citizen. (Refugees, those who have been granted asylum, and other specific noncitizens are also eligible.1)
- Be enrolled in a degree program or certification program deemed eligible for federal student aid.
- Meet other basic criteria,2 such as having a Social Security number and high school diploma or GED certificate.
There are certain eligibility requirements that may change for someone who is a non-U.S. citizen or a student with a criminal conviction. To find out if these requirements apply to you, contact the U.S. Department of Education.
How to Apply for Federal Student Aid
If you meet the requirements for financial aid, you’re probably eager to get started with the process. Here’s how to apply for federal student aid:
- Gather all required documents,3 including Social Security cards for you and your parents, a driver’s license, tax information, and more.
- Fill out the FAFSA form in its entirety.
- Check your Student Aid Report and make any edits to your application, if needed.
- Wait for a financial aid offer and formally accept any aid you may be eligible for.
- Receive financial aid directly from your school and put it toward eligible categories, such as tuition, housing, or books.
- Reapply by filling out your FAFSA form before the yearly deadline.
How Long Does It Take to Complete FAFSA?
Once you’ve gathered the necessary documents, filling out your FAFSA application will go fairly quickly. Most applicants spend about an hour filling out the initial FAFSA form, and the annual renewal of FAFSA usually takes about 10 minutes or less. Most students spend 10 minutes making corrections in their Student Aid Report.
What Do I Need for FAFSA?
It’s important to have everything ready when you sit down at the computer to fill out your FAFSA application. Here’s everything you’ll need4 to get started:
- Social Security Number or Alien Registration Number
- Federal income tax returns
- Other records of income
- Bank statements and any investment records you may have
- Untaxed income records
- FSA ID5 (for an electronic signature)
Fill Out Your FAFSA Today
We know you have chosen Independence University because you’re committed to being successful and advancing your career. After reading this guide, you’ll be well prepared to fill out the FAFSA before the due date and take control of your finances while in school. Complete your FAFSA form today and take the next step toward a brighter future.