Importance of FAFSA - Free Application for Federal Student Aid

FAFSA is a government student aid program that stands for Free Application for Federal Student Aid. It is the main application that colleges and universities across the United States use to determine a student's financial aid package. Institutions use data provided on this form to determine how much aid a student is eligible for, and also which kinds of aid a student can receive.

Each year, more than eight million students receive some form of federal financial aid. The FAFSA application determines eligibility for all federal aid programs, from Pell Grants to student loans. It determines eligibility for most state and collegiate-based aid programs. And, it even indirectly determines eligibility for some merit-based aid, since many schools reserve their own (limited) scholarships for students who don’t qualify for need-based funds.

For example, many FAFSA deadlines are February or March, some even as late as April. However, applying this late will not give students the upper hand when trying to obtain the best financial aid possible. Even if the FAFSA deadline is February 1, and the applicants have electronically submitted their FAFSA by February 1st on the dot, that is not good enough.

The best way to complete the FAFSA is early, and online. January 1st is the soonest you can apply; remember that there are sometimes early deadlines for awards and that awards often consist of limited funding. Complete your taxes early because you’ll need that information, otherwise you can estimate the amounts from previous years and correct the amounts on the form later at the corrections page on the FAFSA website.