How to Collect Your FAFSA Money

The Free Application for Federal Student Aid (FAFSA) serves as a gateway to various forms of financial assistance for higher education. This application collects essential financial data to determine eligibility for federal, state, and institutional aid programs. This article outlines the steps involved in securing and managing financial aid, from reviewing initial reports to maintaining eligibility.

Understanding Your Student Aid Report (SAR)

After submitting the FAFSA, students receive a document known as the FAFSA Submission Summary, which replaced the Student Aid Report (SAR) for the 2024-25 academic year. This summary provides an overview of the information submitted on the FAFSA, including the Student Aid Index (SAI). The SAI is an index number that colleges use to determine a student’s eligibility for financial aid, replacing the former Expected Family Contribution (EFC). A negative SAI indicates a higher financial need, while a positive SAI suggests less need.

Students can access their FAFSA Submission Summary online within one to three business days of submitting their application. This document details the application processing date, the SAI, and an estimate of federal aid eligibility, such as for Pell Grants or federal work-study programs. If errors are found, corrections can be made by logging into the StudentAid.gov account and selecting the “Make a Correction” option. Timely corrections help prevent delays in aid processing and ensure accurate eligibility determinations.

Receiving Your Financial Aid Offer

Following the FAFSA submission and the review of the FAFSA Submission Summary, colleges to which a student has been accepted will issue a financial aid offer letter. This letter details the specific types and amounts of aid a student can receive from federal, state, and institutional sources for a given academic year. These offers arrive around the same time as, or shortly after, admission letters, often between late March and early April for regular decision applicants.

A financial aid offer outlines the estimated Cost of Attendance (COA), which includes direct costs like tuition and fees, as well as indirect costs such as books, supplies, transportation, and living expenses. The aid package itself comprises a combination of “gift aid” and “self-help aid.” Gift aid, including grants and scholarships, does not need to be repaid.

Self-help aid, such as federal student loans and work-study programs, either requires repayment or involves earning funds through employment. Students should compare offers from different institutions, understanding the distinction between aid that must be repaid and aid that does not, before formally accepting or declining any components of the aid package, usually through an online portal or a return form.

Disbursement of Aid Funds

Once a student accepts their financial aid offer, the funds are disbursed directly to the college or university. The school then applies these funds to cover the student’s direct educational expenses, which include tuition, fees, and on-campus room and board if applicable. Federal student aid, including grants and loans, is disbursed in at least two payments per academic year, at the beginning of each semester or term. This means a student might receive one disbursement at the start of the fall semester and another at the beginning of the spring semester.

Disbursement dates vary by institution, but funds are released between 10 days before the start of classes and 30 days after the term begins. For first-year undergraduate students who are first-time federal loan borrowers, there might be a 30-day delay from the first day of the enrollment period before their initial loan disbursement.

If the disbursed financial aid exceeds the direct costs owed to the school, the remaining balance is issued as a refund to the student. These refunds can be sent via direct deposit to a bank account, a physical check, or through a school-issued debit card. Students should contact their school’s financial aid office for specific disbursement schedules and refund methods.

Maintaining Aid Eligibility

Continued receipt of financial aid in subsequent academic periods requires students to meet certain ongoing responsibilities. A primary requirement is maintaining Satisfactory Academic Progress (SAP), which is monitored by the institution in accordance with federal regulations.

SAP involves three components: a minimum cumulative Grade Point Average (GPA), a satisfactory completion rate of attempted coursework, and completing the degree within a maximum timeframe. Institutions require a minimum cumulative GPA of at least a 2.0 on a 4.0 scale for undergraduates. Students must also successfully complete a minimum percentage of credits attempted, often around 67%.

Additionally, federal regulations stipulate a maximum timeframe, 150% of the published length of the academic program, measured in credit hours. For example, a bachelor’s degree requiring 120 credits must be completed within 180 attempted credits to maintain aid eligibility.

Enrollment status also impacts aid; federal aid programs require at least half-time enrollment, and full-time enrollment often maximizes grant eligibility. Students must reapply for FAFSA annually to determine ongoing eligibility, as financial circumstances can change from year to year. If financial situations change significantly, such as due to job loss or medical expenses, students should contact their school’s financial aid office to discuss potential adjustments to their aid package.