Fed Financial

Is financial aid (FAFSA) free money? or do you have to pay it back?

I applied for FAFSA and since my parents no longer support me it said I was eligiable to recieve money. I'm in the middle of doing paperwork with my school so I haven't gotten anything yet...but I was wondering if the money I get is free or if I have to pay it back? Also, if anyone's recieved financial aid...do they give you one lump sum? and can you spend it on whatever you want or do you have to show them proof? Thanks!

Public Comments

1. Grants/on-campus jobs you don't have to pay back. Loans you do have to pay back. It depends on what your financial aid package consists of.
2. It depends on what kind of financial aid you are awarded. Grants don't have to be paid back, but loans do. You can apply for both on the FAFSA. People are eligible for financial aid even when their parents support them... just so you know. They usually give your school the money and after all your tuition, books, fees, housing and other expenses come out the rest (if you have any) is given to you at least once a semester. The one exception to that is work study where you earn it just like a regular job. Here is a good publication.
3. You can receive grants and loans. The grants are free, like scholarships, but are awarded based on financial need. Loans must be paid back, but you don't have to take the loans.
4. For the most part this is free money, yes. The amount that they give you depends on how much is earned within the household or address that you gave when you gave that application, whether or not you're dependent or independent and whether or not you work. They usually only give this money to those who could use a little push financially, hence the "aid" part. The only things you have to pay back are loans, so stay away from those if you can. If you need loans, I would recommend subsidized loans because those don't accumulate interest while you're in school (unsubsidized do). Also, the money usually comes in the form of a check every fall and spring semester. Your classes are usually paid automatically and you get a check with the remaining sum. You also have to re-apply every single year after (preferably right after turning tax forms) because a lot of things can happen in a year...new job, new house...etc, and they have to reconfigure how much you get. Another thing, the money is not tracked, it's yours to use as you wish. My personal advice though...if you do have extra cash after paying for your courses, don't spend it all because you will be needing money to pay for books. Oh and one last thing, be sure to check with your financial aid office at school and at your school website to make sure that everything is in order (sometimes there are delays). If you have very specific questions regarding your FA, their website is www.fafsa.ed.gov. Good luck! ^ ^
5. it depends on what kind you get, if you get a pell grant you dont have to return any money and whats left you can use it on whatever you want, if you get a work/study it means that you do have to pay it trough work, if you get loans well, you have to pay them back i think you can get up to 4700 per year
6. Pell Grant - free money that is awarded to you for tuition, books, and room/board. Any excess will be given to you in the form of a check. State Grant & other grants - Goes directly to your school to cover tuition costs Loans - your school works directly with loan companies, so often times you have to go with what your school chooses. A popular one is the Stafford loan. The loans are most often given directly to you, and used for whatever (although the intended purpose is to pay for school expenses). These must be paid back, but while you're in school there is no interest on them (so work during the summer and pay them off, if possible!). Once you're out of school, they started accruing interest, but the interest is tax-deductible. Best of luck!
7. Everything depends on if you are an independent or dependent student AND if you are an undergraduate or graduate student. FAFSA is the Free Application for Federal Student Aid. When you fill out the FAFSA, it automatically determines whether or not you qualify for any grants (ie: the Pell grant which is most common). If you want a Stafford loan then you need to fill out your FAFSA and the financial aid application at your school or with a lender. Grants you do not need to pay back, but the Stafford loan you do. Dispursement depends on your school, but usually the funds go to the school and they send only for so many credits at a time to ensure that you are actually completing classes. If you receive any excess funds, that will go to you, but you are supposed to use them for educational purposes and/or living expenses. There is no clear definition of that and it is not regulated.
8. Federal Financial aid consists of both loans and grants. If you receive a grant, it is free money that does not have to be paid back. If you receive a loan, you will have to pay it back; though the repayment does not begin until 6 months after you graduate or drop below half time enrollment. Federal financial aid is first paid to the school, typically in at least two payments. If you are eligible to receive more aid than you need for your tuition and fees, you can ask the school to refund you the money to be used for living expenses. When you sign the FAFSA, you are attesting to the fact that you will only use financial aid for educational purposes (which can include living expenses). Schools are not required to request proof of what you spend your excess financial aid on, but that doesn't mean they won't. Good luck!