What Is FAFSA and How Does It Work?

Did you know there’s a good chance you can get free money for college—the kind you don’t have to pay back? It’s true! One of the first steps to getting that money is to fill out the Free Application for Federal Student Aid (FAFSA). After you submit the FAFSA, you’ll get to see how much federal, state or school funding you’ll be offered.

You should take advantage of as much financial aid as possible if you’re planning to go to college, but let me be clear: I definitely don’t mean student loans. Nope, I’m talking about free money that you won’t owe back. Back in the day, my husband and I racked up nearly $300,000 in student debt, and let me tell you—taking out debt for education is not the move.

That’s why we’re going to talk about what the FAFSA is, how it works, and how filling it out can help you avoid student loans.

 

What Is the FAFSA?

The FAFSA is a form that collects information about your financial situation—things like income, savings and investments. If you’re a dependent, they’ll collect info about your family too. Colleges then use that information to decide how much money to offer you for school and what kinds of financial aid you qualify for.

How Does the FAFSA Work?

Filling out the FAFSA gives you the opportunity to receive federal, state and school need-based financial aid. It also paves the way for receiving merit scholarships, which colleges will only offer you after submitting the FAFSA. (That’s a big deal, folks.)

You don’t want to miss out on any money, which is why everyone planning to attend college should fill out the FAFSA—even if you feel like your family makes too much money to get any financial help. After all, colleges look at all kinds of factors to decide how much money to give you, like the size of your family and your year in school.

Bottom line? This FAFSA business is not optional. Set a reminder on your phone and make it a priority to fill out the form—you don’t have anything to lose by trying. And who knows? You could end up getting a nice little chunk of change. 

I also want you to understand that the FAFSA itself isn’t a loan or scholarship—it’s only paperwork. Colleges use the information you give on the FAFSA to figure out the amount of financial aid you’re eligible for. You with me?

Types of College Financial Aid

Once you submit your FAFSA, you'll start getting award letters from the colleges you get into that explain, in detail, how much financial aid the school will offer you—and which types of aid you’re eligible for.

To make sure you understand the differences between the most common types of financial aid and don’t get them confused (which is easier than you may think), let’s break them down.

Scholarships and Grants

Scholarships and grants are free money. And if it’s free, it’s for me (and you!). You want these types of financial aid the most because they’re basically a gift—either from Uncle Sam, your state or your chosen university. That’s why scholarships and grants are sometimes called “gift aid.”

Ready to get rid of your student loans once and for all? Get our guide.

Most grants are awarded based on financial need, which is determined by your FAFSA application. Scholarships, on the other hand, are usually merit-based. That means they’re awarded based on things you earn and achieve—things like good grades, test scores, extracurricular activities, community service and other achievements. Finally, all that hard work is (literally) paying off!

Just know that a lot of the best merit scholarships will make you jump through some extra hoops like submitting additional applications, writing essays or even being interviewed. That may sound like a lot, but trust me: It’s pretty easy. Just stay organized and remember that each school’s financial aid office can help you make sure you check all the right boxes.

 

Work-Study

The Federal Work-Study Program gives you a part-time job where you can earn a fixed amount of money (up to how much is stated in your award letter). Here are some common work-study jobs:

• Serving as a campus tour guide
• Tutoring other students at your college’s writing center
• Managing the front desk at the student gym
• Working as a library assistant

Now I know what you’re probably thinking . . . That isn’t financial aid, it’s just a job! But hear me out: Work-study is a big deal. Unlike off-campus jobs, work-study roles offer super flexible hours, pause during school breaks, and sometimes even let you do homework while you’re on the clock. I don’t know about you, but that sounds way better to me than clocking in at McDonald’s.

Because you get these jobs through your school, you’re working with people who know you’re a student and want you to be successful in the classroom. Not to mention it’s an opportunity to make friends and establish helpful relationships on campus. Win-win.

Student Loans 

Like I said before, most colleges will try and call student loan debt “financial aid.” Truthfully, that’s a lie—and I get big mad about it. You know what the word aid means? It means help. Well, let me be the first to tell you that student loans don’t help you do anything but get into debt.

And guys, I get it. In the moment, student loans can seem worth it. But take it from someone who’s been there: It’s a trap. Don’t believe me? Go ahead and ask some of the adults you know if they’ve paid off their student loans yet.

You’ve got to watch out because your financial aid award letter from the schools you apply to will lump student loans in with the rest of the options like grants and scholarships. That’s super sneaky and confusing to a lot of people.

True story: My first two years of college, I went to the financial aid office each semester to make sure I took advantage of all the “aid” I was eligible for. It wasn’t until halfway through school that I realized I’d been racking up debt the whole time—and that I’d have to pay it back.

So take it from me: It pays to be clear and always ask questions if you are unsure. And you can accept part of your financial aid package without accepting everything, so make sure you say no to student loans.

What Are the FAFSA Requirements?

Alrighty, now that we’ve settled all that awful student loan business, let’s get into the nitty-gritty. There are a few requirements you have to meet before the FAFSA form actually does anything for you.

To meet the FAFSA’s eligibility requirements, you must:

• Be a U.S. citizen or U.S. national
• Have a green card, an Arrival-Departure Record, or a T-visa (if you’re not a U.S. citizen)
• Have a high school diploma or GED certificate, be dual-enrolled in college classes, or if you were homeschooled, have completed a state law-approved high school education program
• Be enrolled as a student (or at least accepted) in an approved degree or certificate program
• Have a valid Social Security number
• Sign statements on the FAFSA form saying you’re not in default on a federal student loan, you don’t owe any money on a federal grant, and you’ll use federal student aid for your education only¹

How to Fill Out the FAFSA

Look, I’ve kept it absolutely real with you this whole time, so I won’t even try to play you—the FAFSA can be super confusing. And even though the Department of Education made some big improvements in 2024, lots of folks have had major problems filling out the updated form online.

But don’t let that stop you from completing the FAFSA! After all, if you’ve made it through algebra, you may think this is a piece of cake. To make it even easier, let’s go over the step-by-step process:

1. Gather important documents.

The FAFSA will ask for very specific information that I doubt you’ll know off the top of your head. So before you start filling it out, you’ll need to make sure you have easy access to some important documents like:

• Your Social Security number
• Your parents’ Social Security numbers
• Your driver’s license number (if you don’t have a driver’s license, skip this part)
• Records of your parents’ untaxed income
• Info on your parents’ cash, savings and checking accounts, investments, real estate, and any business or farm assets (if you’re not dependent on your parents, all this info will need to be your own)

And even though the IRS now automatically puts your family’s tax information into the form, it’s still a good idea to have a copy of your parents’ tax return handy. (I don’t recommend counting on the IRS for very many things.)

If you’re filling out the form for the 2024–25 school year, you’ll need tax information from 2022. And if you’re filling it out as a dependent, having one or both of your parents with you wouldn’t hurt.

Don’t worry if all these details make you feel like your head is spinning. You can check out a PDF copy of the FAFSA to get an overview of the kinds of questions you can expect to answer on the official form.

2. Create an FSA ID.

An FSA ID is the username and password you’ll need to access, save and electronically sign your FAFSA documents. You can create one here. If you’re a dependent, your parents will need their own FSA ID as well in order to sign your FAFSA form.

3. Start filling out the form on fafsa.gov.

Don’t let this intimidate you—the prompts will walk you through the form. If you don’t know what something means, click on the small blue “Help” circle or use the search bar on the FAFSA website.

There will be sections for you to fill out your personal information and which schools you want the FAFSA to be sent to. (You don’t have to decide on a school or even be accepted yet for the FAFSA information to be sent there.) If you’re a dependent, your parents will also have to fill out a section about their demographics and financial information.

And don’t you even think about lying on there. If you intentionally put false information on your FAFSA, they can fine you up to $20,000 and even haul you to jail. (You will not pass Go or collect $200.)²

 

4. Sign the form. 

Next, digitally sign that puppy! If you’re a dependent, you and your parent need to sign the FAFSA form online using your FSA IDs.

5. Submit the FAFSA. 

The final step is to hit submit and send that baby on! Once you submit the FAFSA, take a deep breath—the hardest part is over. You don’t need to print out the form because it’ll be sent to colleges electronically.

When Is the FAFSA Deadline?

The FAFSA form for the 2024–25 award year will be open until June 30, 2025.³ That means the application is open now. So if you meet the requirements, go ahead and apply ASAP. Don’t wait—a lot of financial aid is gifted on a first-come, first-served basis.

Keep in mind that state financial aid deadlines vary, so head to the FAFSA website to find out each state’s exact requirements. You should also check for financial aid deadlines on your potential college’s website.

Take the Next Step to Go to College Debt-Free

Here’s what I want you to know as we wrap up: You can pay for college without student loans. And filling out the FAFSA is just one of the ways you can make that happen. Like we talked about earlier, there are tons of outside scholarships and grants available. You can also save a ton of money by avoiding super expensive private or out-of-state schools that are outside of your price range.

You have plenty of ways to get ahead of college costs so debt is no longer an option. Choose differently! You don’t have to make the same mistakes I did. And it’s best to get on this sooner rather than later.

 

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