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The FAFSA, or Free Application for Federal Student Aid, is your ticket to financial aid from the federal and state governments and most colleges and universities.

As the name implies, the FAFSA is completely free and gives you access to federal aid to make paying for college easier. Three reasons to fill out the FAFSA:

1. Free Money, Also Known as Grants and Scholarships 

Grants and scholarships are free money used to help pay for college that, in most cases, you do not need to pay back. These can come from the federal or state government or your college. Grants are primarily need-based and include the Federal Pell Grant, Federal Supplemental Educational Opportunity Grants (FSEOG), Iraq and Afghanistan Service Grants, and Teacher Education Assistance for College and Higher Education Grant (TEACH Grant).

There are a few circumstances in which you would need to pay a grant or scholarship back. If you do not fulfill the requirements that go along with the grant, you will have to repay the grant. For example, the TEACH Grant requires graduates to teach in national need areas for four of the eight years after graduation. You may also need to repay a grant if you are over awarded, which can occur if you’ve received outside grants and scholarships that reduce your financial need or if your enrollment status changes.

2. Opportunity for Federal Work-Study

Federal Work-Study is a program that allows college students to earn money while working part-time through school. The only way to qualify for a Federal Work-Study job is to fill out the FAFSA and demonstrate financial need. You’re awarded an amount on your financial aid award letter, but that money needs to be earned in a job.

Federal Work-Study allows you to earn extra money to help pay for everyday costs and education expenses. Jobs pay at least minimum wage and are generally between 10 and 20 hours per week. It’s usually not enough to pay your full tuition bill, but it can help pay for books or other expenses and can give you work experience to add to a resume.

3. Federal Student Loans 

Federal student loans are student loans that need to be repaid, plus interest. Why are federal student loans considered financial aid? Because if you do need to borrow student loans, federal student loans are generally cheaper than private student loans and come with benefits. You should exhaust all other options before borrowing any student loans, including federal loans.

Federal student loans offer more generous deferment options than private student loans. So, if you lose your job or are having an economic hardship, you can temporarily postpone payments. Keep in mind that even in deferment, unsubsidized federal loans are still incurring interest that is added to the principal balance at the end of the deferment period. Some federal student loans may be subsidized, which means that the government pays the interest that accrues on the loan while you are in school or during a deferment.

When repaying federal student loans, you have the option of enrolling in an income-driven repayment plan. There are four different income-driven repayment plans, which base your monthly student loan payment on your income and family size.

Federal student loans also come with the potential for student loan forgiveness. You can get some federal loans forgiven if you qualify for Public Service Loan Forgiveness, which allows borrowers that pursue specific public service jobs that meet the requirements to get loans canceled after making 120 qualifying payments. Federal student loan forgiveness is also available on the remaining balance of loans enrolled in an income-driven repayment plan, which is usually 20 or 25 years. However, unlike Public Service Loan Forgiveness, the forgiven remaining balance is taxed as income.


ScholarShare 529, California’s college savings plan, publishes the College Countdown website and articles to provide resources and to ease the minds of parents preparing to send their kids to college. Visit ScholarShare 529.