Do You Have to Pay Back FAFSA?
If you're a college student or planning on attending college, you know just how expensive tuition is. Sometimes, it feels like there aren't enough work hours in the day to cover all of your costs, but where there's a will, there's a way, and that's where FAFSA comes into play.
The Free Application for Federal Student Aid, or FAFSA, is a form that determines your eligibility for financial aid to help cover the costs of your education. This kind of aid can be through scholarships, private student loans, private loans, or federal student loans. The majority of universities also provide their own financial aid for prospective and current students. And while FAFSA funds can be a lifeline for many students, one pressing question lingers: do you have to repay FAFSA funds?
What Are FAFSA Funds?
FAFSA funds refer to the financial aid provided to students based on their application and demonstrated financial need. The federal government, state governments, and colleges and universities loan these funds to students. Unlike scholarships or private grants, the FAFSA financial aid funds often come in the form of loans that must be repaid. Although grants are available, not requiring repayment, understanding the different types of FAFSA funds is essential to grasp any repayment obligations.
When it comes to FAFSA, there are various financial aid options available to students. The Federal Pell Grant (the most common federal award) is a need-based grant the federal government provides. The loan amount is determined by factors such as the student's EFC, cost of attendance, and enrollment status. Another type of FAFSA fund is the Federal Work-Study program, which provides part-time employment opportunities to eligible students to help them earn money for educational expenses. Think of work-study as a job you don't have to pay back.
There are also federal student loans available through FAFSA. These federal loans can include Direct Subsidized Loans, Direct Unsubsidized Loans, and Direct PLUS Loans. Direct Subsidized Loans are available to undergraduate students with demonstrated financial need, while Direct Unsubsidized Loans are available to both undergraduate and graduate students, regardless of financial need. On the other hand, Direct PLUS Loans are available to graduate or professional students and parents of dependent undergraduate students.