How Does FAFSA Funding Work?
Free application for student aid (FAFSA) operates under the U.S. Department of Education and is a method of paying for higher education through loans, grants or work-study programs. Federal student aid governance is under Title IV of the Higher Education Act of 1965, as amended. Eligibility determination under FAFSA begins with completing an online application.
Other People Are Reading
-
Grants
-
There are several grants available under the FAFSA program. The most sought after is the Federal Pell Grant, which is based strictly on income need. The amount disbursed under Pell will vary according to the financial situation of the student and family along with the cost of school attendance. There are other grants available similar to Pell based on the degree pursued, such as teaching, or math and science. Grants pay directly to the school for educational expense disbursement.
Loans
-
Completing a FAFSA application also applies for subsidized and unsubsidized student loans. Subsidized loans do not accrue interest while enrolled in school at least half time. Loans that are not subsidized begin to accrue interest as soon as the loan disburses. Funds lent are from the U.S. Treasury and usually have reasonable interest rates. Student loans do not repay until completion of school or if the student drops out or is attending less than part time. Loans disburse directly to the student for educational expenses.
-
Work-Study
-
Part-time employment is available under FAFSA work-study programs so students can work while enrolled in school. Pay is directly to the student, and the amount paid is determined by the school that administers the work-study program.
Application
-
The starting point for any student looking for financial aid is to complete the online FAFSA application. To qualify under FAFSA the student must not be in default on prior student loans and be working toward a degree or enrolled in an eligible certificate program.
-
