FAFSA grants and loans


Families having an annual income of $180,000 or less are eligible to avail some form of financial assistance to help their child to pursue college studies. According to a recent statement by the U.S. Education Department, all dependent undergraduates, irrespective of their family income can qualify for minimum of $27,000 through unsubsidized Stafford loans for a period of 4 years.

To qualify for both grants and loans, you are to fill up FAFSA (Free Application for Federal Student Aid), an official form to seek financial assistance from the federal and state government and colleges.


Its main objective is to identify the need based amount that you qualify for to get financial assistance including the non-need based assistance that you can get. Although your parents, personal loans and private scholarships may help you to get maximum money, still it will be worth to fill up this form. Few schools may require it to take financial aid decisions, including grant money and private scholarship. Prior to checking out private loan options, it is necessary to understand that federal loans do come with extreme flexible payment options and hence, is worth the try!

How to calculate need?

To identify the financial requirements, FAFSA performs a calculation by taking COA (cost of attendance) at the institution. Then it subtracts EFC (expected family contribution).Universities and colleges do provide COA estimation. The calculation tends to include fees, tuition, board and room, supplies, books, loan fees, transportation along with other associated school expenses. Dependent and child care costs are also taken into consideration along with costs associated with eligible study abroad and disability programs.

Next, EFC (expected family contribution) is calculated. According to the system, 5.64% of parents’ assets and 20% of students’ assets is to be available to spend in any college year. Hence, the key here will be to place most of the college savings in parents’ name.

Moreover, paying credit card outstanding or spending money on the college needs before filing for the FAFSA can help lower down the assets. Bills like mortgage and other debts can be paid prepaid to reduce assets prior to completing the FAFSA. The FAFSA formula protects family assets of $50,000, the exact amount of which depends upon parents’ age.

Some assets not taken into consideration in this calculation tend to include family home value or value of annuities, insurance policies and retirement assets.