Eligibility for Federal Financial Aid

To be eligible for federal financial aid, you must:

  • Be a citizen or eligible non-citizen
  • Have a high school diploma or a General Education Development (GED) certificate
  • Be enrolled at least half-time in an institution that participates in the financial aid program
  • Be registered for Selective Service (applies only to males 18-25)


The Free Application for Federal Student Aid (FAFSA) is an application that all students must submit in order to be eligible for most types of aid.

The FAFSA asks you questions about your finances and your family’s finances from the previous year. Schools use this information to determine what type of financial aid you’re eligible for, for example, grants, work-study, and federal student loans. Because the FAFSA requires information from your parents (if you are under the age of 24 with no dependents), you should enlist help in completing it.

You will need to complete a FASFA every year you need financial aid. You can complete it online at www.fafsa.ed.gov. If you can, it’s a good idea to complete it online because you can easily reuse information from previous years, making the renewal process simple.

You need to complete the FAFSA as soon as possible after January 1 of the year in which you think you’ll need financial aid. And even if you don’t think you’ll need or qualify for financial aid, you should apply anyway. You never know.

Private loans are offered by lenders directly to students and their parents. Private loans are useful for bridging the gap between the cost of college and the amount of other financial aid available. In general, it’s a good idea to max out all other types of financial aid before taking out a private loan.

Determining Aid and Eligibility

Based on the information you provide in the FAFSA, the federal government calculates your Estimated Family Contribution (EFC). The federal government then creates a Student Aid Report (SAR) and sends it to you to review for errors. Once you sign and return it, your SAR is sent to all the colleges you listed on the FAFSA as schools you are interested in attending.

Each college that receives your information will use it to create a financial aid package based on your family’s financial need. However, some of the colleges on your list will not have enough money to meet 100% of your financial need. Be sure to apply to a variety of colleges so that you can compare the financial aid packages you receive from each one.

All of the colleges to which you apply will use the SAR to determine your eligibility for the various types of federal financial aid, such as PELL grants, Federal Supplemental Education Opportunity Grants (FSEOG), Federal Work-Study (FWS), Stafford Loans, Perkins, and Plus Parent Loans.

Federal Tax Benefits

In addition to the traditional forms of financial aid, there are a number of tax benefits available to offset the cost of education. Parents and some students who pay for college and pay taxes in the same year may qualify for generous federal and state education tax benefits. These include:

  • Federal Tax Credits. Tax credits directly reduce the federal taxes you owe. For example, if you owe taxes at tax time, a credit is a dollar-for-dollar reduction of the amount you owe.
  • Federal and State Tax Deductions. These benefits reduce your taxable income. By reducing your taxable income, a deduction may also reduce the taxes you owe.