FAFSA Loan application

FAFSA is very important for American tertiary students who are considering applying for financial aid. 

While many associate the FAFSA with grants and scholarships, it’s also the first step to securing federal student loans.

FAFSA Loan Application

The FAFSA itself isn’t a loan application, but rather a general financial aid form.

However, the information you provide determines your eligibility for federal student loans.

There are several types of federal student loans available, each with its own terms and interest rates. Common loan options include:

  1. Direct Subsidized Loans: Needs-based loans with interest payments covered by the government while you’re enrolled at least half-time in school.
  2. Direct Unsubsidized Loans: Not need-based, meaning anyone who qualifies can borrow. Interest accrues from the disbursement date.
  3. Direct PLUS Loans: Loans for parents of undergraduate students to help cover educational expenses.

When you submit your FAFSA, the Department of Education calculates your Expected Family Contribution (EFC).

This number represents how much your family is expected to contribute towards your education.

The lower your EFC, the more federal student loan aid you may be eligible for.

How to apply for Federal Student Loan Aid

Completing the FAFSA form is the first step to securing federal student loans. Here’s a breakdown of the application process:

  1. Create an FSA ID: An FSA ID is your electronic signature for federal student aid applications. You can create one at https://studentaid.gov/h/apply-for-aid/fafsa.
  2. Fill out the FAFSA form: The FAFSA form is available online. You’ll need to provide information about your income, assets, and household size. If you’re a dependent student, you’ll also need information from your parents.
  3. Submit your FAFSA: After you’ve completed the form, submit it electronically. You can also request a paper form by calling the Federal Student Aid Information Center at 1-800-433-3243.
  4. Review your Student Aid Report (SAR): After submitting your FAFSA, you’ll receive a SAR that summarizes the information you provided. Review it carefully and make any necessary corrections.
  5. Accept your financial aid offer: Your school will send you a financial aid offer letter detailing the types and amounts of aid you’re eligible for, including federal student loans. Carefully review the terms and conditions before accepting.
  6. Complete loan entrance counseling: Before receiving your federal student loans, you’ll need to complete loan entrance counseling. This online program educates you about your loan responsibilities and repayment options.
  7. Sign your Master Promissory Note (MPN): The MPN is a legal document that outlines the terms of your loan repayment. You’ll need to sign an MPN before your loan funds are disbursed.

Federal Student Loan Aid Eligibility requirements

To be eligible for federal student loans, you must meet the following criteria:

  1. Be a U.S. citizen or eligible non-citizen.
  2. Have a valid Social Security number.
  3. Be enrolled in an eligible degree program at least half-time.
  4. Demonstrate financial need (except for unsubsidized loans).
  5. Maintain satisfactory academic progress according to your school’s standards.
  6. Not be in default on any federal student loans.

Even if you meet the general eligibility criteria, the specific loan amounts you qualify for will depend on your financial situation, cost of attendance at your school, and other factors.