Your Essential Guide to the FAFSA for Graduate School

Filling out the Free Application for Federal Student Aid (FAFSA) is still necessary for graduate school. Federal Student Aid (FSA) is the largest provider of student financial aid in the nation, and graduate students should complete the FAFSA to be eligible for federal aid and grants. But there are a few changes for graduate students filing their FAFSA application, compared to undergraduate students.

How is the FAFSA for graduate school different from undergrad?

The basic eligibility requirements actually stay the same for receiving any kind of federal aid. Here are the basic requirements:

• Be a U.S. Citizen
• Demonstrate financial need
• Be enrolled in an eligible program
• Maintain satisfactory academic progress
• Not be in default on any federal student loan

You can find the full list with details on basic eligibility on the Federal Student Aid website, the official site of the federal government.

You’ll file the FAFSA just as you did with your bachelor's degree. The difference is the award you can qualify for and the information you provide.

Filling out the FAFSA: The big difference for grad students

One major difference as a graduate student is that you’ll file the FAFSA as an independent student. An independent student is at least one of the following:

• At least 24 years old
• Married
• A graduate or professional student
• A veteran
• A member of the armed forces
• An orphan
• A ward of the court
• Someone with legal dependents other than a spouse or your own children
• An emancipated minor
• Someone who is homeless or at risk of becoming homeless

As an independent student, you won’t be required to provide your parent's information as you did when you were a dependent (undergraduate) student. This is a general rule, so there are a few exceptions. Your program will notify you if you need to provide parental information.

When you complete the FAFSA as an independent student in graduate school, Federal Student Aid will use the financial information provided to determine the types of financial aid — such as loans and grants — you’re eligible for.

What loans are available to grad students after filing the FAFSA?

Graduate and professional students have two options for federal student loans. You can receive both Direct Unsubsidized student loans and Direct PLUS Loans to fund your degree program.

Direct Unsubsidized student loans

Direct Unsubsidized student loans were available during your undergraduate program as well, so you may have already seen these — or taken out a few. The interest rate is higher on Direct Unsubsidized student loans for graduate students.

Direct Unsubsidized student loans collect interest during deferment and grace periods. The interest, if unpaid, is added to the principal balance of your loan once you enter repayment. It’s called capitalized interest, which you’ll want to avoid if at all possible as it will increase the total loan amount.

You have an annual limit to how much you can borrow with Direct Unsubsidized Loans. The total you can borrow annually is $20,500.

However, there’s also an aggregate (total overall) limit to how much you can borrow, which is $138,500 for graduate and professional students. This total includes any Direct Unsubsidized and Subsidized Loans you took out during your undergrad. No more than $65,500 of this can be subsidized student loans from your undergrad.

Because of this limit, student loan borrowers may need to take out Direct PLUS Loans to cover costs during the academic year and complete their program.

Direct PLUS Loans

Direct PLUS Loans, also called Grad PLUS Loans, are available to help fill the gap after you’ve taken out the Direct Unsubsidized Loans. Given the name, this is financial aid for graduate school specifically. This type of loan carries a high interest rate and requires an additional application.

Grad PLUS Loans have a fixed interest rate. You can use a Grad PLUS Loan to fund the rest of your educational needs during the school year as there’s no limit. Instead, there’s a formula. A Grad PLUS Loan will cover the cost of attendance minus any other federal financial aid you received. The cost of attendance, which is determined by the school, can include things like housing and materials.

Again, you must complete an additional application for a Direct PLUS Loan after you file the FAFSA and receive your award letter. This is typically filled out on StudentLoans.gov, but sometimes your school will have its own application. Check with your school's financial aid office before applying.

Each of these student loans can be important to help fund your education. But keep in mind that your school will also use the information provided on the FAFSA to check for grant eligibility or award scholarships within the school, so it’s important to file the FAFSA on time.

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5 steps to submit a FAFSA as a graduate student

The FAFSA typically opens on October 1 the year prior to the start of your graduate school program. For example, if you plan to begin graduate school in the fall of 2022, you’ll file your FAFSA as early as October 1, 2021. The FAFSA typically closes on June 30 (in this example, it would be June 30, 2022). However, most schools have an earlier deadline for FAFSA completion.

To file the FAFSA, you’ll need to complete the following steps:

1. Create or find your FSA ID. You probably created one of these during your undergrad. If so, you can use the same ID.

2. Log in to the FAFSA website and complete the online application. You’ll need to have your:

• Drivers license number
• Social Security number
• Federal income tax returns, W-2s, and any records of money earned
• Bank statements and records of investments (if applicable)
• Records of untaxed income (if applicable)

Be sure to choose the correct year when completing the FAFSA.

3. Input your graduate program schools. At the end of the FAFSA form, you’ll put the name of the school you plan on attending. If you applied to multiple schools, then you should list all of the ones you’re considering.

4. Input your income. You can use the IRS data retrieval tool offered in the form.

5. Sign and submit your FAFSA.

After submitting, you’ll first receive a Student Aid Report (SAR). This has a summary of all information provided on the FAFSA and the estimated number you’re expected to contribute to your education.

From here, you’ll wait to get an award letter outlining your aid package from your graduate program, which may include loans and federal work-study. Don’t forget that you must file the FAFSA every year of your graduate program to stay eligible for funding.

If federal aid doesn’t cover it all, what are your options?

Not all is lost if your award letter is a lower number than you expected. Ideally, you can supplement with scholarships, but this isn’t always enough. If that’s the case, you can first try to negotiate your financial aid, and second, you can look into private student loans.

Negotiate your financial aid

Negotiating your financial aid might not sound like a possibility, but it totally is. You can appeal for additional financial aid.

Begin by contacting your financial aid office. Have a good attitude and be honest about the situation you’re in. Ask how you can make this work and then file an appeal. You can also see if you can apply for any other scholarships or if work-study is available to add on. More often than not, the financial aid office will want to help make it possible for you to attend.

Shop around for a private student loan

As a grad student, if your two loan options from the U.S. Department of Education don’t cover everything and negotiating didn’t work, you can look into private student loans. Even when considering taking out a Direct PLUS Loan, you’ll want to compare it to private student loans since the interest rate is so high and you may score lower interest rates.

Private student loans are available through banks, credit unions and various financial institutions. One popular lender is Sallie Mae.

Private loans have nothing to do with your FAFSA and will require a new promissory note. You’ll complete a separate application with whatever lender you choose.

Be sure to shop around for the best grad school loans. In this case, you get to pick your lender and look at loan terms, so you should be picky. If you have good credit, you’ll probably get a lower rate, too.

Start your search with Credible to look at multiple lenders at once. You can also go individually to each site and get a quote. A “preapproval” doesn’t affect your credit score, as it’s a soft credit pull.

Be innovative and keep track of your loans

As you progress through graduate school, you may need to get creative to find funding. This could mean applying for scholarships every week, seeing if there is a stipend available, or picking up another job.

Whatever you need to do, be sure to keep track of all the student loans you take on. This will be helpful in calculating payoff and avoiding missed payments.

To make sure you’re thinking about every angle with your student loans, schedule a pre-grad school consultation with the team here at Student Loan Planner® today and be aware of all your repayment options.