Is financial aid considered a loan?
The FAFSA application is not a loan. … There are three main types of financial aid that a student may be deemed eligible for after completing a FAFSA application. Some of this money is free money, some must be earned through work, and some must be repaid.
Can you spend your FAFSA money?
Even though college financial aid may seem like free money, you can’t spend it on anything you want. You can only spend your federal financial aid money on purchases that are necessary for you to continue your studies. These necessary purchases may be defined under your school’s itemized cost of attendance.
Do you have to pay back FAFSA money?
FAFSA is not the financial aid itself, so you do not have to pay it back. However, students may use the term FAFSA to refer to the financial aid awarded after the student files the FAFSA. … Student loans, on the other hand, must be repaid, usually with interest. Federal student loans may be subsidized or unsubsidized.
Do student loans count as financial aid?
Student loans may make it possible for some families to pay the college bills. But, student loans do not cut college costs or make college more affordable. Student loans are education financing, not financial aid.
What is Student Loan vs FAFSA?
The main difference between student loans and financial aid is whether or not you need to pay back the money you are given. Student loans generally require that you pay back the loan with interest, while financial aid packages like scholarships and grants typically do not need to be paid back.
Can I buy a car with fafsa money?
You cannot use student loans to buy a car. … You also can’t pay for the purchase of a car with financial aid funds. In particular, a qualified education loan is used solely to pay for qualified higher education expenses, which are limited to the cost of attendance as determined by the college or university.
What can fafsa loans be used for?
According to the Department of Education’s Office of Federal Student Aid, “All loan funds must be used for your education expenses.” Education expenses include tuition and fees; books and supplies; and general living costs. … Tuition and fees are paid directly to the school before the student receives their loan refund.
What will fafsa pay for?
Federal student aid from ED covers such expenses as tuition and fees, room and board, books and supplies, and transportation. … Apply for federal student aid—grants, work-study, and loans—using the Free Application for Federal Student Aid (FAFSA®) form.
What happens if you don’t use FAFSA money?
If you get your loan money, but then you realize that you don’t need the money after all, you may cancel all or part of your loan within 120 days of receiving it and no interest or fees will be charged.
How long do you have to pay back FAFSA loans?
For most federal student loan types, after you graduate, leave school, or drop below half-time enrollment, you have a six-month grace period (sometimes nine months for Perkins Loans) before you must begin making payments. This grace period gives you time to get financially settled and to select your repayment plan.
What is the average FAFSA amount?
Average and maximum financial aid
|Type of Aid||Average Amount|
|Federal Direct Stafford Loan||$5,800 (dependent) $7,630 (independent)|
|Federal Supplemental Educational Opportunity Grant||$670|
|Total Federal Student Aid||$13,120 (dependent) $14,950 (independent)|