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Filling out FAFSA forms can be difficult, not to mention, really confusing. But, if you’re hoping to get financial aid for college, it’s a necessary step you must take.
Understanding how financial aid works is half the battle. You probably have questions like what kind of financial aid can you get from FAFSA? And do you have to pay back FAFSA? We’ll answer all these questions and more below.
What Is FAFSA?
FAFSA stands for the Free Application For Federal Student Aid. The application determines how much financial aid you can receive. The government, as well as most colleges and universities, require you to fill out this form when you apply for financial aid.
In the application, you need to provide information about your income and assets as well as your parents’ information. There are different types of financial aid you can receive, including grants, scholarships, and loans.
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Grants like the Federal Pell Grant and need-based scholarships award students who have a big financial need. There are also scholarships that award students for merit and leadership. Both grants and scholarships provide students with a worry-free way to pay for college.
Like grants and scholarships, students in work-study programs do not need to pay back their financial aid. They work part-time jobs in exchange for financial aid.
There are a few instances where students might need to pay back grants and scholarships. If they withdraw from school or go from being full-time to a part-time student, they may have to pay back their financial aid.
FAFSA Aid That You Need To Pay Back
Not all forms of financial aid are created equally. Whereas grants and scholarships award you with free money that you don’t need to pay back, there is some financial aid that you do need to pay back.
Understand what you are getting into before you commit to a financial aid package. Student debt can pile up, and you must be mindful and knowledgeable when you accept financial aid to pay for your degree.
So what type of financial aid needs to be paid back? You need to pay back any federal loan that you receive.
How Outside Scholarships Affect Financial Aid?
While winning scholarship money is of course a positive thing, it might reduce the amount of financial aid you receive from your school. The federal government requires your college to reduce your need-based aid if your outside scholarships are $300 more than your calculated need.
If you win an outside scholarship, the first thing you need to do is report this to your school’s financial aid office. You can find out from them how the scholarship will impact your financial aid. Then you’ll be able to make an informed decision about whether to accept the scholarship or not.
When applying for outside scholarships, apply for both big and small scholarships. The big award scholarships may seem more appealing. But, the small award scholarships often receive fewer applicants and may be easier to win.
If You Fail a Class, Do You Need To Pay Back Your FAFSA Financial Aid?
Free money sounds great, but what’s the catch? As long as you make Satisfactory Academic Progress (SAP), there is none. On the other hand, if you fail a class, it can impact your financial aid package. You won’t be forced to pay back your financial aid, but you may be at risk of losing your aid in the following semester. Failing a class that is a requirement of your major puts you at a greater risk of losing your financial aid. Requirements may vary, so find out exactly how many credit hours you need to take, and what GPA you need to meet to keep your financial aid.
If You Have Leftover Credits After Financial Aid Is Applied, Do You Have To Pay It Back at the End of the Semester?
There is no need to worry about any leftover credits at the end of the semester. You won’t lose out on the money. You will either get a refund or use it towards your bill for next semester. You won’t need to pay back your FAFSA aid if you overpaid tuition.
Final Thoughts
Remember, you don’t need to accept all the financial aid offers you receive. It’s your choice whether you take it. Especially with loans, make your decision after weighing out the costs and benefits.
