What Is Involved in the Financial Aid Application Process?

Explore the five parts of the financial aid process, including planning, completing the FAFSA, reviewing aid offers, receiving aid, and repaying loans.

Grades 9-12 15 min Resource by:
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It can be stressful going off to college or another postsecondary school experience. There are so many things to figure out. What career do I want to pursue? What school is best for me? What can I afford? What about financial aid? What money is available, and how do I apply? To help prospective students navigate this journey, the U.S. federal government has created a website dedicated to this topic at https://studentaid.gov.

It’s especially helpful to explore an overview of the five steps included in the financial aid process that are outlined on this page. The steps take students through the entire process from the early stages of planning for college through the completion of a degree and repayment of loans. While every step is important, one key (and time-sensitive) step in this process is completion of the FAFSA® application. This application triggers eligibility for a wide variety of financial aid, including federal grants and loans as well as many state and local scholarships and awards. The FAFSA application for 2022 is due by 11:59 pm CT on Thursday, June 30. The application window opens each year on October 1. It’s a good idea to apply as soon as possible after this opening date, since some states and schools have earlier deadlines for their local awards, and funds are often available on a first-come, first-served basis. Submitting your FAFSA early will maximize your opportunity for the most financial aid.

FAFSA applications are due June 30.

The following outline provides an overview of the resources published on the Federal Student Aid website. Use this list to gain a general overview of the financial aid process. Click any heading to jump to the official government site for more complete details.

FAFSA step-by-step process

1. Make a Plan

  • Prepare for College: Consider your career options and decide if college is the right choice for you. Explore funding options as well as postsecondary schools you may wish to attend (college, university, technical, vocational, or trade schools).
  • Understand Grants: Grants are funds provided by the state or federal government and generally do not need to be repaid. Grants are nearly always awarded based on financial need.
  • Understand Scholarships: Scholarships are gifts that do not need to be repaid. They are offered by schools, employers, organizations, and more. Scholarships are awarded based on criteria ranging from financial need to merit-based achievements. The process and criteria for each scholarship is unique.

2. Complete the FAFSA

3. Review Aid Offers

  • Compare School Aid Offers: Each school that you listed on your FAFSA will send you an aid package offer. Offers will vary by school.
  • Accept Financial Aid: Review each financial aid offer and compare it with your anticipated expenses to choose the package that is best for you. Consider which funds will need to be repaid (loans) and which will not (grants, scholarships). You may also be offered opportunities to earn money through programs like a work-study. Each school will provide you with steps and processes for accepting their financial aid offer, and you can generally accept a portion of the offer if you will not need it all. For instance, you might accept a scholarship but decline a loan. Contact the school if you have any questions.
  • Understand College Costs: College costs include much more than tuition. You will also need to consider room and board, books and supplies, fees, transportation, and more. The Federal Student Aid website provides considerations and tips for estimating and minimizing the cost of college.

4. Get Your Aid

  • Receive Your Aid: You will receive funds differently depending on the type of aid. Generally, grants and loans are applied directly to your fixed expenses, such as tuition, room and board, and school fees. Excess funds are then returned to you to use as needed. If you are receiving a loan for the first time, you will need to complete entrance counseling before you will receive the funds. See the Federal Student Aid website for more details or contact your school for specific disbursement dates and processes.
  • Stay Eligible: Explore the Federal Student Aid website for continued eligibility criteria, including maintaining satisfactory academic progress and completing the FAFSA each year.
  • Renew Your FAFSA Each Year: The FAFSA process must be updated and submitted each year to be eligible for a new year of aid distribution. To renew, log back in to your FAFSA form with your FSA ID username and password. Update your information and submit as you previously did.

5. Repay Your Loans

  • Manage Your Loans: Keep track of the loans you’ve received and make plans for repayment. Federal student loan repayment begins 6 months after you finish your last day of school. See the Federal Student Aid website for more details and unique circumstances.
  • Explore Repayment Plans: There are a number of repayment plans available. Review the Federal Student Aid website for an overview of these options or contact your loan servicer for more details. The standard repayment plan ensures that your loans are paid off within 10 years. You must meet repayment expectations to avoid a default on your loan.
  • Seek Temporary Relief: If you face a short-term financial hardship, you may qualify for a deferment, forbearance, or income-driven repayment plan. These options are intended to help you through difficult financial periods while maintaining your good standing with the lending institutions. You should talk to your loan servicer about specific details and options if you need relief from the standard repayment plan.
  • Get Back on Track: If you need to seek temporary relief, be sure to reach out to your school or loan servicer and then resume payments as soon as possible. Above all, make a plan to pay your loans on time to avoid loan delinquency and default, which can result in negative financial consequences. Review the Federal Student Aid website for tips and suggestions.