Is FAFSA a Loan? (2024)

FAQs

Is FAFSA a Loan? ›

The FAFSA is not a loan. It is an application form. However, you can use the FAFSA to apply for financial aid and federal student loans. The FAFSA, or Free Application for Federal Student Aid, is used to apply for several types of financial aid, including grants, student employment and federal student loans.

It is not the financial aid itself. However, the FAFSA enables the student to qualify for many types of financial aid from several sources. Some of this money is free money, some must be earned through work, and some must be repaid. There are three main types of financial aid.

The FAFSA is your application for federal financial aid. Some types of aid you receive through the FAFSA, like grants or scholarships, do not need to be repaid. However, federal student loans received through your FAFSA do have to be repaid with interest after you graduate or leave school.

Financial aid is either money that doesn't need to be paid back, known as gift aid, or earned through a federal work-study program. Student loans must be repaid within a given loan term. Not only are students expected to pay back student loans, but there's typically interest that accrues over the life of the loan.

This depends on whether the refund comes from a loan or a source of free money, like a grant or scholarship. Loan refunds are extra debt, and you don't want extra debt. Work with your school's financial aid office to return the excess to minimize your student loan debt later.

Federal financial aid regulation states that if you withdraw from all of your classes or cease enrollment prior to the 60 percent point of instruction in any term, you will be required to repay all unearned financial aid funds received. A calculation will be performed to determine the repayment amount.

Typically, issuers send your financial aid funds directly to the school, and the school then applies the money to your tuition, fees and other expenses. If there is money left over, the school will send the remainder to you, and you can use it to cover your other expenses, such as your textbooks or transportation.

Remember: any unused student loan money is still part of your loan and must be repaid. You are responsible for paying interest on the unused funds, even if you don't use them at the original disbursem*nt date.

If you fail a class, you may be responsible for paying back any aid you've received, or you might have further federal aid suspended until you meet Satisfactory Academic Progress (SAP).

If you have a student with excellent grades, a very high GPA or impressive scores on standardized tests like the SAT, skipping the FAFSA could mean your family is missing out on some merit aid that might otherwise be possible through your child's school.

How do I know if FAFSA gave me a loan? ›

To check the status of your PLUS loan application, contact the Federal Student Aid Information Center at 1-800-433-3243, or initiate a chat on StudentAid.gov. Was this page helpful? Tell us why not. Thanks for your feedback!

Pros. More flexible repayment options for struggling borrowers than other lenders. Subsidized loans do not collect interest while in school or during deferment. Lower interest rates than many private lenders.

You can remain eligible for a Federal Pell Grant until you receive your bachelor's degree or for up to 12 full-time terms or the equivalent (roughly six academic years). Federal Student Aid (FSA) provides additional information about Federal Pell Grant lifetime eligibility.

This includes need-based financial aid grants that are awarded by individual colleges, as well as federal and state grants like the Pell Grant or Federal SEOG Grants. All of this grant money is free money for you to use on your education.

If you're researching how to return FAFSA money (meaning aid you received from the government to pay for college), you should know that it is possible to return unused federal student loans. When you borrow too much money, the remaining amount will appear as a credit in your student loan account.

The FAFSA^® form allows students to request federal grants, work-study funds, and loans, all in one application. The FAFSA^® form allows students to request federal grants, work-study funds, and loans, all in one application.

The most vital step in applying for federal grants, work-study, and loans for college is the Free Application for Federal Student Aid (FAFSA^®) form.

Anything pertaining to your schooling is an appropriate use of financial aid. School supplies, a computer, travel costs to and from campus, books, tuition, childcare expenses (if applicable), and tutoring are all reasonable purchases for a serious student.

Grants are gift aid from federal, state, or university sources. They are awarded to students based on need, and they DO NOT NEED TO BE REPAID. You must complete the FAFSA or DREAM ACT application to be considered for grant awards.

Federal student loans are based on financial need and don't require a credit check. To apply, fill out the Free Application for Federal Student Aid (FAFSA®). Private student loans depend on your credit score, and you might need a cosigner if your credit isn't strong.