How does the FAFSA work?

To come up with your financial need, the FAFSA essentially does a calculation, taking the cost of attendance (COA) at the educational institution and subtracting your expected family contribution (EFC). Colleges and universities provide an estimate of your COA. read more

For this reason, the FAFSA is more than just a federal application. State governments use the EFC generated by the FAFSA to hand out state-funded grants and scholarships. And many individual schools use the FAFSA's EFC to decide who will receive institutional grants, scholarships and loans. read more

The information you report on your FAFSA is used to calculate your EFC. The EFC is calculated according to a formula established by law. Your family's taxed and untaxed income, assets, and benefits (such as unemployment or Social Security) all could be considered in the formula. read more

After subtracting the EFC from COA, the FAFSA shows you how much financial aid you qualify to get. This aid can be need-based or non-need-based grants and loans. Need-Based Aid. These options include: Federal Pell Grant. These grants do not need to be repaid. read more