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Key takeaways
- The FAFSA typically opens for annual submissions in early October
- Financial aid is available in the form of student loans, grants and work-study.
- The amount you’re eligible for depends on your enrollment status and year of study, how much your family is expected to contribute and the overall cost of attendance.
If you need to borrow money to pay for college, you have a few options. Depending on your year in school, your status and your financial need, it’s possible that you can get enough financial aid to cover the entire cost of your attendance. However, in many cases, there are limits.
You can complete the Free Application for Federal Student Aid (FAFSA), which opened in December 2023 instead of October, to determine how much federal aid you potentially qualify for in the upcoming 2024-2025 school year.
How much can you get from FAFSA?
Federal financial aid includes federal grants, student loans and work-study programs. The financial aid limit for each program varies by school, year and more.
For instance, the Pell Grant and TEACH Grant maximum awards are subject to change yearly. The maximum amount you can get through Direct Loans also increases for each year you’re in school.
Keep in mind that you may not qualify for the published maximum for some grants; schools have limited funding available, and most financial aid is calculated based on your financial need. With that said, here are the published maximums for all the major federal financial aid programs:
| Maximum amount (2024-25) | Who is eligible? | |
|---|---|---|
| Pell Grant | $7,395 per year | Undergraduate students with financial need, some postbaccalaureate teacher certification students |
| Federal Supplemental Educational Opportunity Grant (FSEOG) | $4,000 per year | Undergraduate students with financial need |
| Teacher Education Assistance for College and Higher Education (TEACH) Grant | $4,000 per year | Undergraduate, postbaccalaureate and graduate students who agree to complete a teaching service obligation |
| Direct Subsidized Loan | $3,500 to $5,500 per year, depending on year in school | Undergraduate students with financial need |
| Direct Unsubsidized Loan | $5,500 to $20,500 per year, depending on year in school and dependency status | Undergraduate and graduate students |
| Direct PLUS Loan | Total cost of attendance (net of other financial assistance received) | Graduate and professional students |
| Federal work-study | Varies by school | Undergraduates, graduates and professionals with financial need |
How is my financial aid calculated?
Once you complete your FAFSA, your financial aid award amount is calculated using a few metrics:
- Expected family contribution (EFC): This is how much your family is expected to pay for your education on your behalf.
- Your year in school: First-year dependent students will have lower student loan maximums than second- and third-year students.
- Enrollment status: You’ll get less financial aid as a part-time student than a full-time one.
- Cost of attendance: Each school has its own cost of attendance, which comes from tuition, fees, room and board, books, supplies and more.
Your school’s financial aid office determines how much need-based aid you’re eligible for by subtracting your expected family contribution from your cost of attendance. Need-based aid includes federal grants and Direct Subsidized Loans.
For non-need-based aid, like Direct Unsubsidized Loans, your school takes your cost of attendance and subtracts any financial aid you’ve already been awarded.
How to estimate your financial aid package
Every student’s financial aid offer will look a little different. Tools like the Federal Student Aid Estimator help you figure out how much you’re on the hook for when it comes to paying for college, as well as estimate your financial aid package.
You can also use the Get2College Expected Family Contribution Calculator to get an idea of your family’s responsibility before submitting the FAFSA. Lastly, you may want to use a student budget calculator to make sure you’re not coming up short month to month.
How can you maximize your financial aid eligibility?
Configuring income, assets, savings and other financial college preparations in the right places is important to maximize how much you receive in federal financial aid. You can do this by:
- Moving your assets to nonreportable asset accounts. If you have any reportable assets, you may want to move them into nonreportable asset accounts. For instance, if you have a 529 college savings plan, you could move those funds into a Roth IRA.
- Completing the FAFSA as soon as possible. The FAFSA starts normally starts accepting applications on Oct. 1 every year for the following year. Since some need-based aid goes out on a first-come, first-served basis, you could get more aid the sooner you apply.
The bottom line
As you plan your college future, funding will play a big role. Your financial aid package may cover many of your education costs, but you may have to look beyond the FAFSA for help. Do your best to exhaust all your free money resources through grants and scholarships first since the more free money you get now, the less you’ll have to rely on student loans.
If you still need cash, student loans are a useful tool to fill in the gaps. Depending on your needs, you may even be able to find one that doesn’t require a co-signer.
