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Is FAFSA Money Free?

money in an envelope against a teal background

Most students and families need some financial aid to pay for college, and completing the FAFSA is an essential first step in getting that money. But many wonder if FAFSA money is free or if it is a loan. Unfortunately, the answer isn’t simple. 

In this article, we’ll break down the different kinds of aid available through the FAFSA and clarify which types do and don’t need to be repaid. That way, you can make informed decisions as you plan for college.

What is the FAFSA?

The FAFSA, or Free Application for Federal Student Aid, is the form you complete to apply for federal financial aid for college. States and colleges also use the data from your FAFSA to determine eligibility for the financial aid they award. In short, filling out the FAFSA is the first step in accessing financial aid. 

Is money from the FAFSA free?

FAFSA itself isn't "money," but it’s the form students and families complete to apply for federal financial aid. Completing the FAFSA is free and can lead to you being awarded several types of financial aid, some of which are free, while others are not. 

Each type has different rules on repayment, making it essential that you understand what you’re eligible for and what it might mean for your finances in the future. Let's look at the different air options now.

Grants

Grants are money that doesn’t need to be repaid. The most well-known is the Federal Pell Grant, which is typically awarded based on financial need. Other grants might be available depending on eligibility.

Work study

Work study is a program that provides part-time jobs for students with financial need. These jobs allow students to earn money to help cover educational expenses, but the earnings must be worked for and aren’t automatically free funds.

Loans

Federal student loans are another type of money students may access by completing the FAFSA. These loans must be repaid with interest, so they’re not “free money.” Federal loans often have lower interest rates and more flexible repayment terms than private loans.

Scholarships

Scholarships don’t need to be repaid, so they’re similar to grants. However, many scholarships are available to students independent of those awarded through the FAFSA. 

So, while FAFSA itself is free and can lead to financial aid, not all the aid types are free money—only grants and some scholarships are truly free.

Completing the CSS Profile after the FAFSA

The CSS Profile (College Scholarship Service Profile) is an online application you can use to apply for non-federal financial aid from colleges and scholarship programs. Developed and maintained by the College Board, many schools require students complete it for financial aid consideration. 

Compared to the Free Application for Federal Student Aid (FAFSA), the CSS Profile is more in-depth, allowing institutions to ask for additional financial details. For instance, while FAFSA doesn't account for home equity when determining federal aid, the CSS Profile does include it in its assessment. 

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