Do We Have to Pay Back Money from the FAFSA?
Q - I was just wondering… does the money we get from FAFSA have to be paid back?
A - The three main forms of financial aid (outside of scholarships) are grants, work-study, and loans. Only the portion of the money you get as a result of having filled out the FAFSA that is called loans will have to be paid back. Work study is paid to you (the student) for work you actually do while you are enrolled in college (and doesn't have to be paid back). Any grants or scholarships you get/earn don't have to be paid back either.
Different types of loans have different terms. Depending on the type of loan and who borrows the money (student or parent), the loan may not have to be paid back until after the student completes school. It’s also possible payments may be due starting right away. Student loans, however, have the most favorable terms. Parent Loans start repayment only a few months after the final disbursement of the loan. As of July 2008, parents can request deferment of repayment. The parent just needs to contact their lender to make this request.
The best and most important thing about what you receive “from the FAFSA”, is that you have the option of accepting or declining each part. So if you receive work-study as part of your award letter for your freshman year, but you and your parents decide it would be better for you not to work at first, you could simply decline that portion of what you’re awarded (then if you were awarded work-study again in subsequent years, you could accept it then). Once you’ve submitted the FAFSA and been accepted for admission to the schools you are considering, (pending any requested verification documents) each school will start the process of determining your eligibility based on their costs (eligibility is different at each school, depending on their costs).
Here’s how it works.
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FAFSA (Free Application for Federal Student Aid)
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