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How Qualifying For Financial Aid Works

Qualifying For Federal Financial Aid
Workers staff the front desk of the University of Michigan's Undergraduate Admissions office.
Workers staff the front desk of the University of Michigan's Undergraduate Admissions office.
Bill Pugliano/Getty Images

In order to qualify for federal financial aid, you need to meet several standardized eligibility requirements.

  • Prove You Have Financial Need -- To prove you have financial need, you'll first need to know your expected family contribution (EFC) score. To get this, fill out the Free Application for Student Aid (FAFSA). Subtract your EFC from the cost of attendance (COA) at your school of choice. The result ranks your financial need [source: Department of Education]. Many people worry that their EFC doesn't take into account all of the variables that can affect individual situations. For instance, what if medical expense offsets a high salary? What if you're considered a dependent, even though you aren't living with your parents? In specialized situations, the financial aid administrator (FAA) at your school has the flexibility to adjust your COA or the information used to calculate your EFC [source: Department of Education].
  • Meet Educational Requirements -- You must have a high school diploma or a General Education Development (GED) test certification, or prove eligibility by passing an ATB (ability-to-benefit) test or by meeting other guidelines your state has imposed. You also need to be enrolled (or accepted) at an eligible school, and you must be working toward an eligible degree program. Finally, you'll need to meet academic progress standards set by your school [Source: Department of Education].
  • Meet Legal and Other Requirements -- You must be a U.S. citizen or an eligible non-citizen, you must have a valid Social Security Number (exceptions include citizens of the Republic of the Marshall Islands, Federated States of Micronesia and the Republic of Palau), and you can't be in default on a federal student loan or owe a refund on a federal grant. Males aged 18 to 25 must also comply with Selective Service registration [Source: Department of Education].

For more information, grab a copy of the Department of Education's annual publication, "Funding Education Beyond High School." It provides more detail on the items summarized here and answers many frequently asked questions [source: Department of Education].

Now that we've discussed general eligibility, let's tackle how to qualify for free money -- grants and scholarships.