When students apply for financial aid to cover the cost of their tuition, books and housing while attending college, they are actually applying for grants or student loans. Grants are usually provided by the federal government, and they are considered 'free money' since students aren't required to pay them back. However student loans must be paid back after a student graduates or ceases to be enrolled as a student at a college or university in the United States. To find out what you qualify for as a college student, you need to apply for financial aid.

Things You Will Need

FAFSA application
Tax forms from previous year

Step 1

Gather your financial information. The Free Application for Student Federal Aid (FAFSA) is the application that determines your eligibility for financial aid. To complete it you need tax and financial information for the previous year. For example, if you complete the application for the 2009-2010 school year, you use your tax and financial information from 2008.

Step 2

Meet with a financial aid counselor if needed. You aren't required to meet with a financial aid counselor before applying for financial aid, but it can be very beneficial if you are a first-time applicant. They not only can walk you through the application step-by-step, but they also can answer any questions you have that pertain exclusively to your particular family or financial situation. In addition having been responsible for processing financial aid applications, they can often give you a ballpark figure of how much financial aid you will qualify for.

Step 3

Obtain the financial aid worksheet. The FAFSA is completed online, but you can actually fill out a paper worksheet in advance to speed up the process once you're in front of a computer. The worksheet is available from the FAFSA website, and it walks you through the different questions that the FAFSA asks. Each question contains a space to write the answer to the question, which you'll refer to when applying online.

Step 4

Enter your personal information. The first section of the FAFSA covers personal information including your birth date, your social security number and your state of residence. In addition it has a series of questions that you must answer to determine if you are considered an independent or dependent student. Even if your parents don't contribute towards your school or living expenses you are considered a dependent unless you meet one of the criteria for independence such as age 23 or older, married, have children or have earned a bachelor's degree.

Step 5

Report your tax and financial information. Much of the information for this section is taken from the taxes you filed during the previous year. You do need to include information about your assets as well as any benefits you receive from the government such as food stamps or housing assistance. If you are a dependent student you are required to enter your parent's tax and financial information in addition to your own.

Step 6

List where you want the FAFSA sent. At the end of the FAFSA you are given the opportunity to enter your school information. You need to list any college or university you want to attend and receive financial aid from. If you decide to attend a different school after submitting your FAFSA, you can add it to the list by submitting a corrected FAFSA with the school name and information entered.

Step 7

File your FAFSA online. After completing the worksheet, you can file your FAFSA application online. You want to file it with the federal government and not a private organization. There is no cost to file your FAFSA, so if you are being charged to submit your FAFSA you are not on the federal government's website.

Step 8

Review your student aid report. After submitting your FAFSA, you will receive in the mail your Student Aid Report (SAR). This report confirms the information you submitted on your FAFSA and lists your Expected Family Contribution (EFC), which determines your need and eligibility for financial aid. If you notice any information is incorrect on your Student Aid Report, you need to submit a corrected FAFSA online with the right information.

Step 9

Check with your financial aid department about your FAFSA. Once you submit your application online, it goes to the federal government before being sent to the colleges and universities you identified in your application. This process takes seven to 14 days, but you want to check with your financial aid department towards the end of the 14 days to determine if they have received it. They may need additional documentation to process your FAFSA such as a copy of your taxes or W-2s especially if you have been selected for verification.

Step 10

Provide the information needed for verification. Just as you can have your taxes audited by the IRS to ensure they are correct, you can be chosen to have your FAFSA information verified. This process requires you to submit financial documents such as tax reports, W-2s and information about your assets, which are then used to verify that the information on your FAFSA was true. Although this process takes more work and can be scary, it simply delays you in finding out what financial aid you qualify for assuming you've been honest in filling out the FAFSA.

Step 11

Accept the financial aid awards you want. After processing your financial aid application, your college or university will sent you an award letter which details the financial aid you qualified for. You can accept all of it, none of it or only certain parts of it. For example, some students don't want to take out student loans while in college, which is why they will only accept the grants they are awarded.

With the cost of attending college on the rise, it's more important now than ever that students apply for financial aid. This is true for even those students that think they won't qualify as a result of how much they earn or their parents' income. With no fee to apply for financial aid though, it's a great way to see if you qualify for any money that can help you out and keep you on the road to your chosen career.

Tips & Warnings

Financial aid can take awhile to process, so it is highly advised you apply as early as possible.

Each state has a priority deadline for applying for financial aid, and these are listed on the federal government's financial aid website. Having your application in by the priority deadline ensures you are considered for all available financial aid and not just what is left and has been awarded to other students.

Most colleges and universities host College Goal Sunday which is a special Sunday when financial aid counselors make themselves available to any students needing assistance in completing their FAFSA. If you need assistance, find out when your school is hosting this event.

After submitting a FAFSA, you can follow it up each year you are in college by completing the renewal process. This saves time since you must only enter the financial and tax information from the previous year and not your personal information unless it has changed.

The amount of financial aid you can qualify for depends upon the cost of attendance at the school and your student classification (freshman, junior, etc.).