The college planning process is an exciting time in a high school student's life — but between touring campuses, choosing a major and completing senior coursework, it's necessary to take the time to apply for financial aid.
While the 2022-23 academic year seems like it's in the distant future, now is the time to decide how to pay for college. Rising college students can begin filling out the Free Application for Federal Student Aid (FAFSA) form for next year beginning on October 1.
Keep reading to learn how you can start preparing for the FAFSA now and what to expect after you've applied. If you'll need additional student loans beyond what's offered after filling out the FAFSA form, consider your options like federal direct PLUS loans and private student loans.
Visit Credible to learn more about the different types of student loans and to compare private student loan rates without impacting your credit score.
4 things to do now to prepare for the FAFSA
The U.S Department of Education gives out more than $120 billion worth of financial aid each year, including loans, grants and federal work-study programs. To determine your federal financial aid eligibility, you'll need to submit your financial information using the online FAFSA form.
Most students fill out the FAFSA in under 30 minutes, according to the Federal Student Aid (FSA) website. Here are tips to prepare for the FAFSA application, so you can make swift and smart decisions about paying for college:
- Create an account on the FSA website. First-time FAFSA applicants will need to create an FSA account. Save your FSA ID or username and password in a safe place.
- Research your FAFSA deadlines. Each state and university has its own set of deadlines for when you need to turn in the FAFSA form. You can find state FAFSA deadlines on the FSA website, and get in touch with your school's financial aid department to find theirs.
- Determine your dependency status. The FSA has different award limits for independent and dependent students. If your parents claim you as a dependent on their federal income tax return, you're a dependent student. You can see the other criteria for dependency status on the FSA website.
- Gather all your relevant documents. You'll need your Social Security number (or Alien registration number for non-citizens), tax return information, records of untaxed income and bank account balances, as well as a list of the schools you are interested in attending. Dependent students will also need to gather their parents' income information.
The FSA website also offers detailed step-by-step instructions outlining what to expect during the application process and frequently asked FAFSA questions.
You can also visit Credible to learn more about paying for college, including information about private student loans. Compare estimated student loan interest rates from real private lenders in the table below.
What to expect after you fill out the FAFSA application
Within a few days of filling out the FAFSA, you'll get an email confirmation that your application has been received. It can take up to two weeks to process your FAFSA application, depending on the circumstances.
Once your FAFSA application is fully processed, you'll receive a Student Aid Report (SAR) with a summary of your financial aid package. The schools to which you apply will use this information to determine your federal and state aid, as well as scholarships, based on the cost of attendance. To learn more about each offer, contact the school's financial aid office.
Compare your options for additional student loans
It's common to need additional student aid when federal grants and direct loans come up short. Many families bridge the financing gap with federal PLUS loans and private student loans. Here are a few things you should know:
- PLUS loans are reserved for graduate students and parents of undergraduate students. Private student loans can be taken out by students, but they may come with better terms if you use a cosigner like a parent.
- Grad PLUS loans and parent PLUS loans have the highest interest rate of any federal student loan at 6.28%.
- Private student loan interest rates vary based on a number of factors, including the loan amount and length as well as the borrower's creditworthiness. Interest rates on private student loans are still hovering near historic lows, according to data from Credible.
- Private student loans do not qualify for federal protections like administrative forbearance, and they can't be discharged through student loan forgiveness programs.
If you decide private loans are right for you, compare rates across multiple lenders at once on Credible's online student loan marketplace.
Have a finance-related question, but don't know who to ask? Email The Credible Money Expert at email@example.com and your question might be answered by Credible in our Money Expert column.