How does the FAFSA Work?

How does the FAFSA work and how can it save you money?

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If you’re going to college, you should become familiar with the FAFSA–or Free Application for Federal Student Aid. The FAFSA is a service provided by the US Department of Education for the purpose of determining the amount–and type–of aid you’ll get to help pay for college. But how does the FAFSA work?

Aside from determining your eligibility for federal aid, states and most colleges also use the form. Filing the FAFSA could pay off, even if you think you’re not eligible for aid.

What information is collected on the FAFSA to determine a student’s eligibility for aid?

  • The FAFSA looks at your family’s income and assets to calculate your expected family contribution (EFC)
  • The number of people in your family and the number who are attending college also influences how much aid you’ll receive

To approximate how much money your family earns annually, the FAFSA looks at your family members’ most recent tax returns. It also takes your family’s assets into account.

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How does the FAFSA work?

The government and colleges analyze this data to determine a student’s estimated family contribution, or EFC. Colleges sometimes calculate this a little differently than the government, but essentially, it is the amount of money they think your family can reasonably afford to pay for college every year. The EFC is subtracted from the college’s sticker price, and the difference is what you can hope to receive in financial aid.

Curious what your EFC will look like? Online calculators can give you an estimate.

Some types of aid are disbursed on a first-come, first-served basis, so it’s beneficial to file the FAFSA as early as possible. The FAFSA opens on January 1st every year.

Financial need is equal to Total Csot minus Estimated Family Contribution (EFC). How does the FAFSA work?

Financial need is calculated with a simple equation.

How is the FAFSA filed?

  • The FAFSA is usually filed online
  • Re-filing is required annually

You can file the FAFSA by mail or online. Most students submit online.

Before you file the FAFSA, you and your parents should find your most recent tax returns. You may also need paystubs and bank statements to finish the form. Some colleges also request copies of parent and student W2s as a supplement to the FAFSA.

If you’re filing online, you’ll start out by making an account on the FAFSA website (note: this is, not The form is broken up into sections. You can save and come back at any time.

When you’re finished, you will have the option to sign the form electronically. To do this, you will need to create a personal identification number (PIN). Make sure you write your PIN down and keep it in a safe place–it will make re-filing easier in the future.

The FAFSA is filed annually to account for any financial changes in the previous year.

What is the PROFILE? Is it still required if I filled out the FAFSA?

Some colleges need even more detailed financial information before they decide how much aid they can offer you. In this case, you may be asked to submit the CSS/PROFILE. The PROFILE is a fee-based service offered by the College Board. The cost is $25 to submit to the first college and then $16 for every college after that. Very low income families may qualify for a fee waiver.

Interested in seeing the financial aid you could get from colleges around the country? Use College Raptor’s free tool to see for yourself!