Submitting your FAFSA will qualify you for federal grants, loans, and work-study programs, in which the government invests roughly $95 billion every year. Regardless of your income level, the FAFSA gives every applicant access to federal loans that offer lower interest rates and better repayment plans than many private lenders. As of 2011, if you do come from a family with an income below $50,000, you may qualify for the Pell Grant, an annual allotment that can total up to $5,500.
Many states offer aid to students who choose to study within their home states. State aid packages generally include grants and scholarships, money that does not require repayment and helps you reduce your school's price tag effectively. While every state offers different financial aid opportunities, they all require that you file your FAFSA in order to qualify. Check with your state's higher education agency to find out what opportunities are available to you.
Nearly all colleges and universities require students to submit the FAFSA to determine their eligibility for aid. Since many schools offer scholarships or grants for students who may not have qualified for federal aid, filing your FAFSA is essential. Some schools have more funding than others, making opportunities for financial aid vary by institution. If you choose to attend a school with more funding, you may receive more grants and scholarships than loans.
Students from divorced families may receive additional funding. The federal government only evaluates the custodial parent's salary and does not include the noncustodial parent's salary in their assessment review. If your parents are divorced, your award package may increase significantly, as long as one parent is the sole caretaker, has full custody and earns a modest income. Since your family's income is lower, your EFC, or Expected Family Contribution, will also be lower.
Filing your FAFSA gives you access to federal grants, loans, work-study programs, institutional aid, state aid and fair financial expectations. The FAFSA recognizes the economic hardship endured by families who have two or more students in college and lowers their family's EFC. Additionally, the FAFSA does not consider home equity wealth when calculating the EFC and will increase financial aid packages for families with high home equity, but limited cash.