If you’re in the process of filling out a FAFSA, you’re likely wondering what the possible results could be, and what the worst case scenario is. You should know right away that not everyone qualifies for all types of aid that are available by completing a Free Application for Federal Student Aid. The federal forms of educational funding provided by the US Department of Education are offered on a need-basis. This means that the more financial need you have, the more likely you will be to qualify for all types of aid.
The FAFSA seeks to determine eligibility for the following programs: federal work study, federal grants, scholarships, subsidized loans, and unsubsidized loans. Obviously, the most desirable of these forms of aid are grants, as this is money for college that never has to be repaid. Following closely behind grants is scholarships, which also provides money for school that never has to be paid back, but comes with some restrictions and obligations.
Work study programs are often preferred over federal loans. Work study awards are provided once per year. A student is able to “work off” up to the full amount of the award by performing services in a field similar to the student’s field of study, or in a job that serves the public good if no degree-specific jobs are available. However, making the commitment to work is difficult for many students. Nevertheless, students that do take advantage of this program are able to get money for school and valuable training at the same time.
Subsidized loans are available to students with financial need. Interest on these loans is not accrued while the student is still enrolled in school or is in a grace or forbearance period. Once the student graduates or stops attending, loan payments will be due and interest will begin to accrue after a 6 month grace period. However, interest rates are very low on this type of federal loan.
The worst case scenario is that you’ll only qualify for unsubsidized loans. These loans also do not become payable until graduation or when the student stops attending, although interest does begin to accrue at the time the loan is first disbursed. Unsubsidized loans are still a valuable way to obtain money for college. These loans can help prevent a student from having to participate in work study or work a full time job while attending school. And being that the interest rate is extremely low, the cost of the money borrowed is very reasonable. So essentially, the worst case scenario when you fill out a FAFSA is that you will be provided with an excellent, low-cost loan that’s completely managed for you. It’s still a pretty good deal. Unless you’d like to pay for college out of your own pocket, that is.
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