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You won’t have to repay any grants or scholarships you receive through the FAFSA.
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The type of aid you receive after filling out the FAFSA determines if you need to pay it back.
Grants, scholarships, and work-study money don’t need to be repaid but have finite funding limits.
You will need to repay subsidized, unsubsidized, and Direct Plus Loans.
To qualify for most forms of financial aid, including aid from your school, you need to fill out the Free Application for Federal Student Aid, or FAFSA. The FAFSA for the 2022-23 school year is available until June 30, 2023, and the FAFSA for the 2023-24 school year opens on October 1, 2022.
You can get various types of aid from the FAFSA, and you’ll know what you qualify for once your school gives you your complete financial aid package. You’ll need to repay some, while you won’t have to pay back others.
Types of financial aid you don’t need to pay back
Grants, scholarships, and work-study money are types of aid you don’t need to repay. The earlier you submit your FAFSA, the more likely aid will still be available — the pool of money is finite.
Grants: Often given based on exceptional financial need or if you belong to a designated group. There are a couple of federal grants for students with exceptional financial need: one for students who commit to teaching for four years at a low-income school, and another for students whose parent or guardian died serving as a member of the military in Iraq or Afghanistan. Learn more about types of federal grants here. Scholarships: Often given based on academic merit, athletic talent, or other achievements. Scholarships are offered through your school itself, and the amount of money available depends on the school. Work-study: Often given based on when you apply, your level of financial need, and the amount of money your school has available. Work-study is a type of financial aid that provides part-time positions, such as library receptionists and research assistants, for students with financial need to earn money for academic expenses.
If you still want “free money” to pay for college, private scholarships and grants could help bridge the gap — and you won’t have to repay any of this financial assistance. However, keep in mind that private scholarships and grants are highly competitive, and your school may reduce the aid it gives you by the amount of the private scholarship or grant.
Types of financial aid you need to pay back
When you complete the FAFSA, your school may offer you any one of three types of federal loans: subsidized loans, unsubsidized loans, and Direct PLUS Loans. The interest rate on federal loans is fixed. Each of these loans needs to be repaid.
Subsidized loans: Made based on financial need. The government covers the interest on your loan while you’re in school, so it doesn’t accrue while you’re in school or during your six-month grace period. A grace period is a length of time after you graduate before you have to start repaying your loan in full. Unsubsidized loans: Doesn’t take financial need into account. Interest begins to accrue immediately and continues to accrue during your six-month grace period. This is a more expensive option than a subsidized loan. Direct PLUS loans: Doesn’t consider financial need and requires a credit check. Graduate and professional students, as well as parents of undergraduate students, can take out Direct Plus Loans. Interest accrues during school and during a six-month grace period.
If your college costs aren’t covered completely by the aid offered through the FAFSA, you may have to take out private loans as well. You will have to pay those back, and these should be your last option as private loans often come with worse terms and protections than federal loans.
You need to complete the FAFSA to determine what type of assistance you qualify for, though you don’t have to accept all the financial aid offered to you.