Financial Aid 101
Everything starts with the FAFSA. What is it?
FAFSA stands for Free Application for Student Aid. The FAFSA is an application form used to determine if you’re eligible for federal loans, grants, and work-study, as well as some state financial aid and IU scholarships.
The FAFSA was developed by the U.S. government and includes financial questions for you and your parents (unless you are no longer classified as a dependent). It also asks about your citizenship status and marital status.
If you are an international student, you do not need to fill out the FAFSA. Check with your IU campus’s international student services or Admissions office for more information on cost and financial aid.
Follow the steps in the financial aid process
Fill out the FAFSA and apply for college.
When you submit your application to IU, the university will also review your FAFSA to determine your eligibility for financial aid.
IU will send you a financial aid statement once you’ve been admitted.
This statement will include the federal loans, grants, and work-study you qualify for, as well as some state financial aid and IU scholarships.
Work with IU Admissions to understand your options.
An admissions counselor can help you assess the aid you qualify for, as well as opportunities to apply for private student loans and additional scholarships.
Accept, reduce, or decline your loans.
You may choose to reduce or decline an offered loan if it’s more than you need to cover your costs. An admissions counselor can help you make your best decision.
Manage your financial aid throughout college.
You’ll need to fill out the FAFSA each year you want to receive financial aid, as well as keep an eye on your financial aid eligibility requirements.
Prepare to pay your loans back.
IU MoneySmarts can help you begin planning for managing your finances after graduation, including student loan payments.
Financial aid terms you need to know
As you begin learning about financial aid, you’ll probably encounter some words and terms you’ve never heard before. Don’t worry—we’re here to help.
- Cost of attendance
- All the direct and indirect costs of your education, including tuition and fees, room and board, books and supplies, personal expenses, and transportation.
- You are considered a dependent if you are under 24 years old and you are not any of the following:
- A graduate or professional student
- A veteran or member of the armed forces
- An orphan or ward of the court
- Homeless or at risk for becoming homeless
- An emancipated minor
- Expected Family Contribution
- The Expected Family Contribution (EFC) in index number that colleges use to determine how much financial aid you’re eligible to receive. Your financial need is calculated by subtracting your EFC from your estimated cost of attendance. Your EFC is calculated based on your family’s taxed and untaxed income, assets, and benefits, as well as family size and the number of family members attending college during the year. It is not the amount of money your family will have to pay for college.
- The Free Application for Federal Student Aid (FAFSA) is a form you need to complete before each year of college to determine your eligibility for federal loans, work-study, and grants, as well as some scholarships.
- Federal student aid
- Aid from the government in the form of grants, loans, and/or work-study. You’ll find out about federal student aid eligibility on your IU financial aid statement or notification letter.
- Federal work-study
- Part-time jobs for undergraduate and graduate students with financial need. Work-study programs encourage community service work or work related to your chosen area of study.
- A monetary gift for people pursuing higher education. Grants do not have to be repaid (unless you withdraw from school).
- Student loans include federal loans (awarded by the federal government) and private loans (awarded by an external lender, such a bank, credit union, state agency, or school).
Federal loans are based on the FAFSA and are the most common type of federal aid available to students who demonstrate financial need. Government loans can be “subsidized” (where the interest is paid for you until six months after you graduate) or “unsubsidized” (where the interest begins accruing right away).
Private loans require separate applications, carry varying terms and conditions set by the lender, and are often more expensive than federal loans.
- Pell Grant
- The Pell Grant is the most common grant given by the federal government. The current maximum Pell Grant award is $5,775, for students who are attending school full-time and demonstrate financial need.
- Merit-based scholarship
- Money awarded to help pay for your education based on good grades, high test scores, athletic performance, or aptitude in a certain area (does not have to be repaid).
- Need-based scholarship
- Money awarded to help pay for your education based on financial need (does not have to be repaid).
- State aid
- Financial assistance for eligible in-state residents to help reduce educational costs.
Financial aid across IU
Find financial aid information and deadlines for each IU campus and IU Online.