Does the FAFSA cover higher education and how does it work?

  • The FAFSA is used to offer financial aid for graduate studies as well as undergraduate studies.
  • Interest rates on loans for graduate students are higher than those for undergraduate students.
  • Graduate students can take out unsubsidized loans and Direct PLUS loans, but not subsidized loans.

If you have applied for financial aid as an undergraduate student, you may already be familiar with the Free Federal Student Aid Application. This form, commonly referred to as a FAFSA, is used to determine your eligibility for financial aid, including scholarships, work-study programs, and loans. The FAFSA covers financial aid for graduate school as well as undergraduate study.

Filing the FAFSA as a graduate student is similar to completing it as an undergraduate student. You will need tax returns, bank account information and details of any investments. It will take you about 30 minutes and you can select up to 10 schools to send your FAFSA to.

You can find a more in-depth look at how to apply for the FAFSA here.

How is graduate financial aid different from undergraduate aid?

Graduate students are considered independent, compared to most undergraduate students who are considered dependents of their parents. Even if you still live with your parents, you are considered an independent student if you are preparing for higher or vocational studies. This means that you will file the FAFSA using only your financial information, not your parents’ information.

Interest rates on graduate loans are higher than undergraduate loans. Unsubsidized loans for graduate students have an interest rate of 6.54%, for the 2022-2023 academic year, while undergraduate students enjoy a rate of 4.99% on unsubsidized loans. subsidized and subsidized.

Graduate students are also not eligible for Pell Grants, which are gift aid given to undergraduate students who demonstrate significant financial need. Students who obtain their post-baccalaureate teacher certification are an exception to this rule and may sometimes be eligible for a Pell grant.

Graduate students may be eligible for Federal Fulbright Grants, Iraq and Afghanistan Service Grants, and the Teacher Education Assistance for College and Higher Education (TEACH) grant. Graduate students are also eligible for federal work-study, which is a program that provides part-time positions for students with financial need to earn money for academic expenses.

You may want to pay off loan interest while in school to prevent it from accumulating at the end of your grace period. Interest is capitalized when

your unpaid interest is added to the principal of your loan at the end of a period of non-payment.

What types of loans can graduate students take out?

Graduate students cannot take out subsidized loans like undergraduate students, only unsubsidized loans and Direct PLUS loans. Interest begins to accrue on these loans as soon as they are disbursed. Here is a quick breakdown of the two types of loans:

  • Direct unsubsidized loans: Eligibility is not contingent on financial need. Interest will accrue on direct unsubsidized loans while you are in school, during your grace period, or during a deferment period, but you will not be required to pay this interest until your repayment period begins. Graduate and professional students can borrow up to $20,500 in direct unsubsidized loans per year.
  • Direct Loans PLUS: You can obtain a Direct PLUS loan to pay for expenses not covered by other financial aid offered by your school. These loans require a credit check. The interest rate for the 2022-23 school year is set at 7.54% and the maximum loan amount is based on the cost of attendance minus any other financial assistance you receive.

You can take out more loans as a graduate student than as an undergraduate student, which can make it easier to attend a more expensive school. That said, be careful how much you borrow and make sure you have a plan in place to pay off your loans.

The financial aid process is very similar for graduate and undergraduate students. Both types of students are required to complete the FAFSA to qualify for financial aid, although undergraduates are eligible for loan options at lower rates.

About Raymond A. Bentley

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