Financial Aid Guide: Eligibility Requirements and Application Process

Before applying for federal aid, it’s crucial to understand the eligibility criteria and application process. Without the right knowledge, students could potentially harm their chances of getting financial support. To do things right, here’s a guide to federal financial aid eligibility - approved by our team of education financing experts!

A Guide to Federal Financial Aid Eligibility

To qualify for federal student aid, applicants need to demonstrate financial need, hold U.S. citizenship, possess a Social Security number, and meet a few other requirements. Students must be enrolled or accepted into an eligible degree or certificate program, maintain satisfactory academic progress, provide a certified statement, and present evidence of a high school diploma or GED certificate.

What kind of financial assistance do you qualify for? Are you eligible for aid awards if you don’t demonstrate financial need? Do you qualify for free money or do you have to repay your federal or private loans?

Financial aid is for everybody. Make sure you find out what your options are. We’re going to walk you through different types of financial support, how to get it, and what to do with it.

What Is Federal Aid for College or Career School?

Federal aid refers to the array of programs funded through the Department of Education and designed to help students pay for college, graduate school, or career school. It is available only to students attending schools that have earned accreditation from a regional or national accreditor that is recognized by the U.S. Department of Education.

Note that students attending schools that are not accredited will not be eligible for loans or federal need-based grants. It takes three primary forms:

• Student debt, which must be repaid, typically upon graduation.
• Need-based grants, which do not require repayment and are given to those with demonstrated financial needs.
• Work-study programs, where students can take on part-time jobs to help offset some education expenses.

The U.S. Department of Education provides more than $120 billion in financial aid every year to help students pay for college or career school. This aid is distributed through the Department’s Office of Federal Student Aid (FSA) in the form of loans and need-based grants, as well as work-study programs.

Most U.S. citizens planning to attend an accredited college, university, or vocational school are eligible for some form of aid. Even if you don’t believe that your family income qualifies you for need-based aid, you should apply for aid to learn more about your eligibility for state-based college loans and other financial aid options.

What Are the Basic Eligibility Criteria for Federal Funding?

To qualify for federal student support, you need to prove:

• Demonstrated financial needs
• U.S. citizenship (with the exception of eligible noncitizens)
• Social Security number (SSN)
• Registration with Selective Service (for male applicants)
• Enrollment or acceptance as a regular student in an eligible degree or certificate program
• Satisfactory academic progress (SAP) in college or career school
• A certified statement denoting the student is not in default on a federal student loan, and that the pending loan will be used for the purposes of education only
• Evidence of high-school diploma or General Educational Development (GED) certificate

Note that additional requirements may apply in certain situations:

Students With Financial Needs

Federal student aid eligibility is not determined by a strict income threshold. It considers various factors including family size and the student’s academic year. Financial needs are assessed through the Expected Family Contribution (EFC) or Student Aid Index (SAI).

These calculate the family’s expected contribution and determine the amount of aid a student can receive. This comprehensive evaluation eliminates income cut-off aspects. EFC and SAI make sure that the aid comes from a holistic view of each student’s financial situation.

Non-U.S. Citizens

Provided you meet other basic eligibility criteria, lawful permanent residents (green card holders) are generally considered eligible noncitizens for federal student aid. Certain other immigration statuses may also qualify individuals as an eligible noncitizen for funding purposes.

It’s important to verify your specific immigration status to determine your eligibility for federal student aid. To qualify, you must be enrolled or accepted into a Comprehensive Transition and Postsecondary Program (CTP) at an institution participating in federal student aid programs.

International Study Students

Do you plan to take a semester abroad or intend to pursue and complete an entire degree course at an international university? You may be able to access the same federal student aid program to fund your studies.

• Begin the process of applying for financial aid the same way you would if you were studying on an American campus: Fill out your FAFSA. As noted above, your FAFSA will determine your eligibility for certain loans and grants.
• Be sure that the college or university you hope to attend is on the following list, the Federal Student Aid office’s index of international schools that participate in the federal student loan programs.
• Give yourself plenty of time to respond to requests for additional information and paperwork. Take this additional time to research other international study requirements such as student visas, specialized housing forms, and medical insurance.

Here are more tips for international students in the U.S.

Students With Criminal Convictions

As of July 1, 2023, incarcerated students in federal or state facilities have limited eligibility for federal student aid. They may qualify for Federal Pell Grants if enrolled in approved prison education programs.

When you’re in this situation, you can potentially receive Federal Supplemental Educational Opportunity Grants (FSEOG) and participate in Federal Work-Study (FWS) programs. However, incarcerated students are not eligible for federal student loans.

Students With Intellectual Disabilities

Students with intellectual disabilities enrolled in Comprehensive Transition and Postsecondary (CTP) programs may be eligible for Federal Pell Grants, Federal Supplemental Educational Opportunity Grants, and Federal Work-Study programs.

Unaccompanied Homeless Students

There’s no specific financial aid program for homeless students. When this is your case, you can still receive college funding by meeting general eligibility requirements and completing the FAFSA.

Unaccompanied homeless youth may have special considerations regarding FAFSA dependency status. This can potentially exempt you from reporting parent information.

Students in Foster Care

Although no specific program exists for current or former foster care students, they can access college funding by meeting general eligibility requirements and completing the FAFSA.

Some foster care students may be exempt from reporting parent information on the FAFSA. Additional resources like Educational and Training Vouchers (ETV) are available to support their educational pursuits.

What Situations Can Make You Lose FAFSA Eligibility?

Some situations can potentially cause you to temporarily lose eligibility. By being aware of these factors, you can take proactive steps to avoid losing your eligibility and make sure you receive the financial aid you need to pursue your academic goals.

Grades Slipped or No Enough College Credits

Failing to have satisfactory academic progress, as defined by your school’s policy, can result in the loss of FAFSA eligibility. You have the option to appeal the school’s decision if they disagree or have valid reasons for your poor academic performance.

Failure to Renew

FAFSA renewal is a yearly requirement for students seeking continued monetary assistance. Failure to submit a new application each year will result in the loss of funding for the upcoming academic year. Applying every year can potentially increase the amount of aid you receive based on your EFC or SAI.

Parents Didn’t File Taxes

When parents fail to file taxes, it affects the family’s financial situation and limits a student’s access to need-based aid. While unsubsidized federal student loans may still be available, the Department of Education cannot accurately calculate the EFC or SAI and how much aid you qualify for. This may potentially reduce your financial support.

Defaulted Student Debt

Defaulting on previous loans or owing money on a federal student grant can result in the loss of FAFSA eligibility. This mainly affects graduate, professional, and returning students.

Eligible Noncitizens With an Expired or Revoked Status

To regain eligibility after an eligible noncitizen status has expired or been revoked, you must either reinstate that status, become a U.S. citizen, or obtain permanent residency. For guidance on reinstating your status or pursuing U.S. citizenship, it’s advisable to contact U.S. Citizenship and Immigration Services for the most up-to-date information and assistance.

How Can I Apply for the Free Application for Federal Student Aid?

Every student attending an accredited college, university, or professional college should fill out a Free Application for Federal Student Aid (FAFSA). You’ll need to complete the FAFSA form annually to determine your eligibility for each year that you attend college, grad school, or professional school.

You’ll need to do the following in order to complete your application:

1. Create an FSA ID

Sign on to the Student Aid website and create your FSA ID. You can do this even if you aren’t ready to begin filling out your form. Have your parents set up their own ID if you’re a dependent student.

Setting up your ID in advance should give you time to manage any unforeseen challenges accessing your application. It can give you a clear idea of the materials and information you’ll need to gather in order to complete your FAFSA.

2. Gather the Required Documents

Your FAFSA will typically require you to locate a number of documents. You will use these documents as references, although you may be asked to send copies of certain materials. You will likely require the following for reference:

• Valid Social Security number
• Parents’ Social Security numbers (if you are a dependent)
• Driver’s License number (if applicable)
• Alien Registration number (for a non-U.S. citizen)
• Federal Tax information/tax returns for you (and parents if dependent; or spouse if married)
• Records of untaxed income including child support, interest, etc
• Information on assets including account balances, investments, and non-residential real estate

3. Start Form

The FAFSA for each upcoming school year becomes available for completion on October 1st. Do your best to get started on the application process as early as possible. There are four ways to fill out your FAFSA:

• Apply online at fafsa.gov or using the myStudentAid mobile app.
• Complete, print, and mail a FAFSA PDF.
• To receive a print form in the mail, call 1-800-4-FED-AID (1-800-433-3243) or 334-523-2691 (TTY for the deaf or hard of hearing 1-800-730-8913).
• Complete and mail the FAFSA form.

4. Select Schools

You must designate at least one accredited college or university to receive your FAFSA information. This information will allow your intended school(s) to make determinations about the financial support package to which you are entitled.

Send your FAFSA to up to 10 schools if you are using the website or mobile app to complete your application. When you’re using the PDF or print version, you can choose up to four schools, although you can add more schools at a later point in the process. Once you’ve completed your FAFSA, your information will be shared with the colleges on your list.

The financial aid office from each of these schools will use this information to make a determination about the state- and school-based aid for which you might be eligible. Use the Federal School Code Search to find the schools on your list.

5. Determine Your Dependency Status and Enter Your Financial Information

You’ll answer a series of questions to determine whether you are of independent status, or are dependent on your parents. When you qualify as the latter, you’ll need to provide both your financial information and that of your parents.

While there are no income cut-off requirements, you will need to provide information about your recent tax history, earnings, and assets. Depending on your filing status, you will also need to provide the same information about your parents or spouse.

6. Sign and Submit

You may sign and submit your FAFSA using your FSA ID or by printing and mailing your completed application. Forms submitted online are processed much faster than those completed and submitted by mail.

You should see a confirmation page following online submission and an emailed confirmation outlining the next steps.

7. Review Your Aid Offer

You should receive a Student Aid Report (SAR) within three weeks of completing your FAFSA. Your SAR will not indicate the size or form of your aid package. The SAR is a summary of the data you’ve submitted on your FAFSA, as well as an indication of your eligibility for need-based grants.

Provide corrections through the FAFSA application website if anything is incorrect on the SAR. Once you’ve been accepted to a college or school on your FAFSA list, you will receive an aid award letter directly from that school indicating what kind of aid you’re eligible for, and in what amount.

The timing and form of your award letter (electronic or mailed) will vary depending on the school to which you’ve applied and the timing of your application.

What Are the Important FAFSA Deadlines?

Once you get started with your application process, you may want to mark important deadlines in your calendar or planner.

1. Federal Deadlines for the 2024-25 Academic Year

Online FAFSA Form submission: by 11:59 p.m. Central time (CT), June 30, 2025.

FAFSA corrections or updates: by 11:59 p.m. (CT), September 14, 2025.

2. College-Specific Deadlines

Every college has its own deadline for FAFSA submissions. Be sure you have the deadlines for your prospective schools marked in your calendar.

These deadlines may impact your eligibility for certain institutional aid programs. Any earlier deadlines from your prospective colleges will supersede a later federal FAFSA deadline.

4. State-Specific Deadlines

Every state has its own submission deadlines as well. You must adhere to these deadlines in order to be eligible for aid from the states in which your prospective schools are located. Visit your state’s higher education agency website for dates relevant to your college search.

What Are Ways to Finance My College Education?

Many students finance their education by combining different types of financial aid. While student loans must be repaid, need-based grants typically do not need to be repaid.

Students who may owe money or not qualify for federal student aid through traditional means can still find alternatives to FAFSA. Exploring these options can open up new avenues for financial support and help you pursue your educational goals without relying solely on federal programs.

1. Federal Direct Loans

Loans which are funded by the federal government fall into four categories:

Direct Subsidized Loan

Also known as Subsidized Stafford Loans or Federal Family Education Loans (FFEL), the subsidized student loan is made available to undergraduate students who demonstrate financial needs. The need is determined by evaluating each applicant’s available financial resources (and for dependents, parental resources; or for married applicants, spousal resources).

Students with direct subsidized loans will not accrue interest either while in school or during any deferment period prior to beginning repayment. For future applicants, this fixed interest rate is subject to change based on various policy decisions and economic conditions.

Direct Unsubsidized Loan

Also known as an Unsubsidized Stafford Loan, this loan is available to most undergraduate and graduate students attending an accredited college or career school. The direct unsubsidized loan is not based on financial needs, and no credit check is required for its approval. This means that most students do not require a cosigner to receive this loan.

However, students receiving the unsubsidized loan will immediately begin accruing interest from the day the loan is granted. Students who are financially independent will be eligible for the larger of the maximum available loan amounts.

Direct Consolidation Loan

A Direct Consolidation Loan allows the recent graduate to consolidate these loans into a single monthly payment. This can help streamline repayment interest rates and due dates. Be warned that your federal interest rate will in fact go up by a marginal amount.

However, if you’re also consolidating private loans, there is a chance that consolidation could lower these higher interest rates, and provide long-term savings.

PLUS Loans

There are two types of PLUS Loans - the Parent PLUS Loan and the Graduate PLUS Loan. The Parent PLUS Loan is available to qualifying parents with dependents who are college students, while the Graduate PLUS Loan is available to independent students attending graduate schools.

PLUS loans are designed to cover any additional expenses beyond what is covered by traditional Stafford Loans. There is no ceiling to how much eligible borrowers may take out in PLUS loans.

2. Private Student Loans

For students and parents who require additional funding after federal loans have been exhausted private education loans are an option. There is no nationwide fixed interest rate. Variable interest rates will depend on factors like your personal credit history and the private lender who ultimately signs over your loan.

Typically, these interest rates are higher. Likewise, repayment terms are not typically favorable. While federal loans generally defer payment until graduation, some private lenders may not defer payments.

Borrowers may be expected to begin repaying loans while still in college or graduate school. Given these considerations, it’s important to shop wisely for a private loan if this is a necessary component of your aid outlook. Look for lower interest rates, more flexible repayment options, and lenders with a positive track record.

3. State-Based Loans

You may also be eligible for state financial aid. Available loan, grant, and scholarship programs will vary from state to state, as will eligibility requirements.

After completing your FAFSA, find the online portal for aid in any state where you are considering attending college. Your eligibility from one state to the next may help shape your ultimate enrollment decision.

Visit the National Association of Student Financial Aid Administrators (NASFAA) portal to find out about aid in the states that matter to you. You can also take advantage of State & Regional College Tuition Discounts to earn in-state rates by attending college in either your home state or a neighboring state.

4. College-Based Financial Aid

A number of colleges provide both need-based and merit-based aid to eligible students. In particular, private and elite colleges will use a supplemental form to determine additional eligibility as funded directly through the college.

The College Scholarship Service Profile (CSS Profile) form helps participating colleges and universities determine which students qualify for need-based aid based on their family’s ability to pay for colleges, and which students qualify for merit-based aid based on academic or athletic achievements.

Be warned that the CSS Profile is generally considered a challenging and time-consuming application process.

5. Federal Pell Grants

Federal Pell Grants are awarded to low-income students based on need. Unlike loans, Pell Grants do not need to be repaid. Eligibility for Pell Grants is determined based on EFC, though the amount may vary depending on financial needs, the cost of the school, and full- or part-time student status.

Some graduate students may also qualify for the Pell Grant in specialized circumstances. For instance, students whose parent or guardian died while serving on active duty in the U.S. armed forces after September 11, 2001, or while actively serving as a public safety officer, may be eligible for Federal Pell Grant funding.

This provision recognizes the sacrifice of these families and aims to support the educational pursuits of their children.

6. Federal Supplemental Educational Opportunity Grants (FSEOG)

The Federal Supplemental Education Opportunity Grant (FSEOG) is also provided to students based on demonstrated funding needs and does not require repayment. This grant is available to undergraduate students who have already qualified for a Federal Pell Grant, and who, both require and are eligible, for further financial support.

The annual FSEOG grant amount will vary based on the extent of each student’s financial needs. To qualify for the FSEOG program, you must have completed a FAFSA, claim full-time status, and have qualified for a Pell Grant.

7. Iraq and Afghanistan Service Grants

Iraq and Afghanistan Service Grants are awarded to college applicants who lost a parent or guardian who served as a member of the armed forces and gave their life in Iraq or Afghanistan following the events of September 11th.

Eligible applicants must have been under 24 years of age, or already enrolled at least part-time in college at the time of the parent or guardian’s death. Additionally, eligibility is reserved only for those who qualify for conditions of a Federal Pell Grant except for the EFC condition.

The sum for the grant will typically match the amount awarded for Federal Pell Grants in a given year.

8. Teacher Education Assistance for College and Higher Education

TEACH Grants are distinct from other federal grants in that students must take certain courses, and commit to certain post-graduate jobs in order to be eligible. Failure to meet these conditions can result in the grant becoming a loan that must be repaid. To earn a TEACH grant, an applicant must:

• Complete a FAFSA
• Qualify for federal student aid
• Enroll in a TEACH-participating undergraduate or graduate school
• Enroll in a TEACH-Grant-eligible program
• Meet basic academic performance thresholds
• Receive TEACH Grant counseling
• Sign a TEACH Grant Agreement to serve

This agreement commits the applicant, upon program completion, to serve in a high-need field, usually in a school or service agency serving low-income families, and for at least four complete academic years within eight years of graduation.

9. Work-Study Programs

Work-study is a program through which qualifying students can supplement other forms of scholarship and aid with part-time work. Payment for this work is typically provided through federal work-study programs, and sometimes through state-based programs. In many cases, once you’ve qualified for work-study participation, it will be up to you to secure an actual job.

Work-study will typically only offset a modest portion of your college cost. However, there’s also tremendous value in gaining real work experience, especially for work that is concentrated in your area of study.

The size of your pre-approved work-study sum will vary based on financial needs as well as enrollment status. The sum that you are awarded will dictate how many hours you can work within the program.

10. Scholarships

Scholarships are also a critical dimension of paying for college and can come from an extremely wide range of potential sources. Like federal grants, scholarships do not need to be repaid, though some may require you to meet certain conditions - often academic-performance-based - in order to keep your scholarship or carry it over to a new school year.

Unlike federal grants, your eligibility for scholarships is as varied as the number of scholarships out there. A wide range of universities, professional associations, extra-curricular organizations, athletic programs, religious institutions, non-profits, charitable organizations, government agencies, corporations, and private benefactors make scholarships available to college and graduate students.

Determine the areas where you most stand out as a student, a person, and a developing professional. The qualifying conditions, award sizes, and deadlines for these scholarships are extremely varied. Awards are given for:

• Athletic, academic, artistic, or extracurricular performance
• Special affiliations, community organization, or charitable action
• Noteworthy personal achievements
• Excellence in a specialized skill area
• Commitment to a future occupational path
• Combination of financial needs and merit-based achievement

Here is a comprehensive overview of scholarships, where we highlight some of the top scholarship directories for your search.

What Are the Ways to Repay Student Loans?

Many individuals struggle to pay their loans upon leaving school or graduating, even those who are working full-time. Take the appropriate steps by reaching out to your lender if you struggle to meet your monthly repayment commitments.

You’ll have a number of repayment plan options for your debt. You’ll choose your repayment option after you’ve taken out your loan. The repayment plan options available to you will depend on your financial profile.

Before making any concrete decisions, you will likely want to consult an advisor or a representative from your private lender’s office. Be sure that you make an informed decision about your repayment plan because you will be responsible for honoring that commitment upon graduation.

Repayment Plans

Regardless of the repayment plan you choose, once payments begin, you will most likely pay monthly installments on your principal amount along with an additional fixed interest charge based on the nature of your loan. The following are the most common repayment plans.

• Standard Repayment Plan: Borrowers have up to 10 years to repay the full loan amount at a fixed monthly amount.
• Graduated Repayment Plan: Borrowers have up to 10 years to repay the full loan amount, starting with low monthly payments which increase every two years. It may not exceed three times the amount of any prior monthly payment.
• Extended Repayment Plan: Borrowers with more than $30,000 in Direct or FFEL Program loans will have up to 25 years to repay the full amount, with a choice of either fixed or graduated monthly payments.
• Revised Pay as You Earn Repayment (REPAYE) Plan: Only for Direct Loan borrowers, the monthly payment amount is based on 10% of the borrower’s discretionary income.
• Pay As You Earn Repayment (PAYE) Plan: Only for Direct Loan Borrowers whose loan originated after 10/1/07; who received a disbursement on or after 10/1/11; whose fixed monthly payment is derived from a 10-year Standard Repayment Plan; and whose student loan debt is high relative to income.
• Income-Based Repayment (IBR) Plan: For Direct Loan and FFEL Program borrowers with a monthly payment amount determined under the 10-year Standard Repayment Plan, monthly payments are either 10 or 15% of the borrower’s discretionary income.
• Income-Contingent Repayment (ICR) Plan: For Direct Loan borrowers, monthly payments are the lesser sum between 20% of the borrower’s discretionary income or the fixed amount that would be paid on a 12-year repayment period, adjusted for income.

Want more information on repaying your student debt? Check out our strategies for how to Focus on Repaying Student Loans!

Forbearance

Forbearance denotes a temporary halt on your repayment plan, usually granted by a lender for financial hardship. While the borrower is not responsible for repayment during a temporarily approved forbearance, interest will continue to accrue on the principal loan amount.

Most federal loan repayment plans include options for forbearance, typically in the event that the borrower is facing financial hardship. You could be relieved of monthly payments for a predetermined amount of time (usually a few months) if you qualify.

Though you will still accrue interest during such periods of forbearance, you will not incur any late fees or damage to your credit rating. Take advantage of these leniencies if you need to.

Refinancing Student Loan Debt

For many students, loan repayment can be a complicated and costly undertaking that includes multiple lenders, multiple monthly repayment commitments, and multiple monthly deadlines. Loan refinancing can help simplify this process and control your costs.

Major lenders like Lending Tree, LendKey, and SoFi offer student loan refinancing programs that allow you to consolidate your existing loans under a single, new private loan. By refinancing, you will typically be able to lower your monthly interest rate and reduce your collection of loan installment plans to a single, manageable monthly payment plan.

In order to be eligible for loan refinancing, you must have at least a “good” credit rating and a reliable source of income. You may need a parent or spouse to cosign if you don’t meet these conditions. Failure to make timely payments will negatively impact your credit rating if you do require a cosigner.

Loan Forgiveness Programs

There are a number of federal loan forgiveness programs aimed at relieving the burden and improving the financial outlook for borrowers who fall into an array of categories. Some loan forgiveness programs are subject to change, expansion, or elimination based on current policy orientation.

Public Service Loan Forgiveness Program

The Public Service Loan Forgiveness (PSLF) Program is reserved for Direct Loan borrowers who become public service employees (including government, not-for-profit, and AmeriCorps/Peace Corps employees). Loans may be forgiven only after the borrower has made 120 qualifying payments without defaulting.

State Loan Repayment Program

Many states also offer their own student loan forgiveness programs for state aid. Terms and eligibility will vary. Check State Loan Repayment Program requirements to learn more about possible forgiveness programs in your state of residence or the state where your college or university is located.

Professional Loan Repayment Programs

There are also numerous specialized loan forgiveness plans related to specific professional pathways. For instance, the healthcare profession offers an array of programs such as the Nurse Corps Loan Repayment Program and the National Health Service Corps Loan Repayment Program (NHSC LRP).

Attorneys can apply for the Attorney Student Loan Repayment Program (ASLRP) or the John R. Justice Student Loan Repayment Plan. Many of these programs are geared toward graduate students with higher debt burdens.

Be sure to learn more about potential loan forgiveness programs specific to your profession, especially if you anticipate carrying a high student loan debt burden into your career.

Related Questions

Why Should I Consider the FAFSA?

You should consider the FAFSA because the FAFSA application is the gateway to various forms of federal, state, and institutional aid, including grants, loans, and work-study programs. By completing the FAFSA, you can secure financial support that can significantly reduce the cost of your education.

How Can I Regain Eligibility If I No Longer Qualify for Federal Student Aid?

To regain eligibility to qualify for federal student aid, you can address the specific issues that led to your disqualification, like repaying defaulted loans, completing drug rehabilitation programs, or regaining SAP. Once you’ve resolved the issue, you can contact your school to discuss reinstating your eligibility and potentially resubmit your FAFSA.

How Can I Maximize My Chances of Getting Federal Monetary Funding?

To maximize your chances of receiving federal monetary funding, make sure to meet the eligibility requirements and submit your FAFSA as early as possible, ideally right after it becomes available on October 1st of each year. Additionally, carefully review and accurately report your financial information and maintain good academic standing.

Conclusion

Reviewing the eligibility requirements for federal student aid can be extremely helpful for aspiring college students looking for options to finance their education. As you familiarize yourself with the financial, academic, and other requirements, you’ll be better equipped to go through the application process and potentially qualify for financial assistance.