The Free Application for Federal Student Aid (FAFSA) is an application that you and/or your parents or guardians fill out and submit to the federal government, so the DOE can determine which types of financial aid you qualify for. Your FAFSA number is based on a mathematical equation from two sources:
Graduate students are considered independent, so everyone can take out up to $20,500 in unsubsidized loans, without any subsidized loans, per year
- Expected family contribution (EFC): This is the income and assets you or your family can spend on your education. If you are a dependent student, this information predominantly comes from your family. If you are an independent student, this is your own information.
- Cost of attendance (COA): This is the cost of attending a college, university, trade school, or professional school that you listed on your FAFSA.
The DOE subtracts your EFC from the COA to create your FAFSA number. This information is sent to each school you list on your FAFSA (up to 10 schools at a time). Each school then creates financial aid award packages for you to go along with your acceptance letter, if they accept your application.
As an independent student, you may have fewer assets and income than the combined financial power of your parents. You may be younger but working at a full-time job. You may have debts of your own, and you may have a spouse and dependent children of your own.
All this information affects your EFC as an independent student, so you probably qualify for more financial aid than some dependent students. Still, this is not guaranteed. You should fill out the FAFSA no matter what, so you can get financial aid information.
Pell Grants. After you fill out the FAFSA, your financial information indicates whether you qualify for the federal Pell Grant program. Pell Grants are most often awarded to undergraduate students based on financial need, but some professional or postbaccalaureate students also receive this money.
As of the 201920 school year, you can receive up to $6,195 per year for your education. This is not calculated directly on your dependency status, though being independent can affect your personal finances. Almost 90% of Pell Grant recipients do not live with their parents, and 66% reportedly have dependents of their own. Direct student loans. Both subsidized and unsubsidized loans through the direct loans program offer financial assistance to students attending postsecondary school. Subsidized loans go to students with significant financial need, while a wider range of students qualify for unsubsidized loans.
Unlike the Pell Grant, both types of loans in the federal direct loan program vary in amount based on whether you are a dependent or independent student. For example:
Graduate students are considered independent, so everyone can take out up to $20,500 in unsubsidized loans, without any subsidized loans, per year
- First-year undergraduate students: Dependent students can take out as much as $5,500 ($3,500 of which can be subsidized loans), while independent students can take out $9,500, with the same amount in subsidized loans.
- Second-year undergraduate students: Dependent students can borrow up to $6,500, while independent students can borrow $10,500.
- Third-year undergrads and beyond: Dependent students qualify for $7,500 in loans, while independent students qualify for up to $12,500 in loans.
Research shows that about half of students attending undergraduate programs are independent, and many have dependents of their own, such as children and spouses. Among independent students, most are the first in their families to attend this level of higher education. Many took years off from school after getting their high school diploma so they could work and support a larger family unit, including parents and younger siblings.