College  |  September 13, 2023  |  Arianna Blakely

What is the FAFSA® and how does it work?

What you'll learn
  • Who should submit the FAFSA®
  • When to submit the FAFSA®
  • How financial aid gets distributed

Pro tip? Fill out the FAFSA® no matter what. Why? The FAFSA®, or the Free Application for Federal Student Aid, is the key to getting all kinds of financial aid for school. We’re talking federal, state, and school aid. Even if you think you won’t get any aid, it’s still worth applying (for free!) and seeing what happens. Here’s what you need to know.

How the FAFSA® calculates your financial need

In order to find out how much aid you need for school, the FAFSA® uses your and your parents’ financial information (if you’re a dependent). This information is then sent to all the schools you’ve applied to.

Once you’ve been accepted to a school, that school then uses this info to determine what your Student Aid Index (SAI) is. Remember the Estimated Family Contribution (EFC)? It’s been renamed to the Student Aid Index. The SAI is an index number that schools, states, and the U.S. Department of Education use to figure out what types of aid you’re eligible for and how much.

Then, the school will compare your SAI to the Cost of Attendance (COA). The COA varies from school to school, but it usually covers things like tuition, room and board, books and supplies, and other school-related fees.

The difference between your SAI and COA will determine your financial aid for each school you get accepted into.

Who should submit the FAFSA®?

Everyone in college (or planning on going to college) should submit the FAFSA®. This includes students who are also enrolled or planning on enrolling in:

  • Two- or four-year colleges
  • Graduate schools
  • Professional schools
  • Any program that rewards a degree, certificate, or credit
  • Post-secondary vocational and technical schools

You can submit the FAFSA® if you have a high school diploma, General Equivalency Diploma (GED), or have completed high school in a home school setting approved under state law, and meet any of the following eligibility requirements:

  • U.S. citizen with a Social Security number
  • Born in the Federated States of Micronesia, American Samoa and the Marshall Islands
  • A legal permanent resident or eligible noncitizen like a U.S. national
  • Person with a refugee status or victim of human trafficking who has been granted asylum

When should you apply?

Try to apply for the FAFSA® every school year as close to the open date as possible. For the 2024-25 academic year, the FAFSA® opens in December 2023. For every subsequent year, it will open October 1st. A lot of state and school grants and loans are limited and distributed on a first-come, first-served basis, so make sure you complete yours ASAP.

You also should submit the FAFSA® for every year you’ll be in school. After your first FAFSA®, you can file a Renewal FAFSA® for the following years. It will have some of your information pre-filled, so it’s easier—and faster—to complete. Always make sure that none of your info has changed before you submit it.

How do you get your FAFSA® aid?

You apply for the FAFSA® through the U.S. Department of Education, but you’ll get your financial aid offer through the schools that accepted you.

Any grants, loans, or work-study programs you’re eligible for will be disbursed directly to the school you decide to go to. Typically, your school will apply your financial aid to your tuition, fees, and room and board if you live on campus. You’ll likely have your financial aid disbursed twice a year, and your school will let you know when they get it. You’ll get any money that’s left over to use for other school-related expenses. You may be able to decide how you get that money: through direct deposit, a physical check, or a prepaid debit or ATM card.

We’re here to help you file the FAFSA®

If there’s anything you should take away from this, it’s that submitting the FAFSA® is never a waste of time. For details on the application and steps on how to submit yours, check out our FAFSA® Guide.


footnote Sallie Mae does not provide, and these materials are not meant to convey, financial, tax, or legal advice. Consult your own financial advisor, tax advisor, or attorney about your specific circumstances.

footnote External links and third-party references are provided for informational purposes only. Sallie Mae cannot guarantee the accuracy of the information provided by any third parties and assumes no responsibility for any errors or omissions contained therein. Any copyrights, trademarks, and/or service marks used in these materials are the property of their respective owners.

footnote FAFSA® is a registered service mark of U.S. Department of Education, Federal Student Aid.