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How Do I Pay for College?

The FAFSA has a funny sounding name, but it’s seriously important when it comes to paying for college.

The FAFSA, which stands for Free Application for Federal Student Aid, is a form that students must file every year they attend college to qualify for any sort of federal financial aid, including grants (which you don’t have to pay back) and loans (which you do).

You may have already heard about the FAFSA because more states are making high school seniors complete it in order to graduate. The reason? Research shows that students who do so are much more likely to immediately enroll in college.

The form gathers financial details about you and your family (assuming you’re a dependent who relies on adults for housing and living expenses), including income and assets, like savings accounts and investments. Federal aid experts say most people can fill out the form in less than an hour, including the time it takes to gather bank statements and other documents, but give yourself extra time when you’re doing it for the first time. Most people file the form online because you can transfer income tax information electronically from the Internal Revenue Service.

Next, the form runs all your information through a complex formula and spits out a number that, the government says, reflects your family’s “financial strength,” or an estimate of what you and your family might be able to pay for college. Right now the number is called an E.F.C., for expected family contribution, but in future years it will be called the S.A.I., for student aid index. (Somehow, that’s supposed to be less confusing.) The lower the number, the more aid you are likely to qualify for.

Colleges and universities that receive your FAFSA (you choose where it is sent) subtract the E.F.C. from the cost of attending the school for a year, including tuition, housing, meals, books and supplies, to see how much financial aid you might need to attend. Then, they send you an aid “package” that shows how much financial help you qualify for, and what the cost would be if you enrolled.

If the cost of attendance is $16,000 and your E.F.C. is $12,000, you would be eligible for $4,000 in need-based aid. — Ann Carrns