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There are plenty of misunderstandings when it comes to financial aid for college, particularly when it involves the Free Application for Federal Student Aid, also known as the FAFSA. Here are just three you may have heard:
FAFSA Equals Free Money
Some parents and students apply for the FAFSA under the impression that any offers they’re given by the Department of Education will be free money. While grants, which don’t need to be repaid, can absolutely be offered, that’s not always the case. Often times, FAFSA will offer students loans, including direct subsidized loans and direct unsubsidized loans. Work-study options may also be included.
The grants that come from FAFSA are almost always need based but they can be from the federal government, your school, the state, or another organization. While a grant is money that doesn’t have to be repaid, you should also look into the details of any money, loan or otherwise, you’re offered by the Department of Education or anybody else so you understand the terms.
My Parents Make Too Much; I Don’t Have to Fill Out The FAFSA
There are quite a lot of students who completely skip completing the FAFSA, under the impression only low income families will receive loans or offers. This is simply not the case. FAFSA absolutely takes your parents’ income and assets into account, but it also factors in the college’s cost of attendance and if anyone else in your immediate family is attending college.
They will determine just how much your parents can contribute to your college education and the “gap” between your parents’ expected contribution and the cost of attendance will often be the amount of aid you’ll be offered.
The FAFSA also goes beyond the federal government, as stated before. Many colleges use the information to offer grants or loans to its students. Even if the government doesn’t give you all the money you need to attend, your school may. It’s always worth it to complete the FAFSA; You may be surprised by the response.
Bad Credit Equals No Loans
Credit doesn’t come into play for federal student aid (unless your parents are applying for Direct PLUS loans). Even if you or your parents have bad credit, you can definitely receive offers after completing the FAFSA. This number doesn’t have an effect on your application or the amount you will receive from the government.
However, bad credit does absolutely come into play for loans from banks or credit unions. In most cases, if you have no credit or bad credit, you will be asked to provide a co-signer. This can be your parents or another trusted family member.
Understanding the FAFSA and what you can be offered should be your first steps before ever filling out the application. You can go into it having an idea of what you may be offered. However, the results of the FAFSA goes beyond just student loans. There is no reason you shouldn’t fill it out, as it could also put you in the running for grants or work study programs. It only takes about an hour on average to complete and could definitely be worth your time.
Use College Raptor’s free Student Loan Finder to compare lenders and interest rates side by side!
| Lender | Rates (APR) | Eligibility | |
|---|---|---|---|
 |
5.50%-16.12%* Variable
3.99%-15.61%* Fixed
|
Undergraduate and Graduate
|
VISIT CITIZENS |
 |
5.54% - 15.70% Variable
3.99% - 15.49% Fixed
|
Undergraduate and Graduate
|
VISIT SALLIE MAE |
|
|
4.63% - 17.99% Variable
3.49% - 17.99% Fixed
|
Undergraduate and Graduate
|
VISIT CREDIBLE |
 |
6.00% - 13.75% Variable
3.99% - 13.75% Fixed
|
Undergraduate and Graduate
|
VISIT LENDKEY |
 |
5.66% - 14.72% Variable
3.69% - 14.56% Fixed
|
Undergraduate and Graduate
|
VISIT ASCENT |
 |
3.70% - 8.75% Fixed
|
Undergraduate and Graduate
|
VISIT ISL |
 |
5.62% - 16.85% Variable
3.69% - 16.49% Fixed
|
Undergraduate and Graduate
|
VISIT EARNEST |
 |
5.00% - 14.22% Variable
3.69% - 14.22% Fixed
|
Undergraduate and Graduate
|
VISIT ELFI |
