Before we enter into this brief look at FAFSA loans, we should point out that FAFSA itself is not a loan application. It is the Free Application for Federal Student Aid. It is something that is not the basis for individual loans, but is actually the basis upon which your college’s financial aid office is going to develop your particular package for aid. From this package, it may be determined that you do indeed need to request a student loan in order to underwrite your studies for that year.

FAFSA Loans: A Clear definition

This means that there really are no such things as FAFSA loans, but that there are instead loans that are the result of the FAFSA application process. Let’s take a few moments to understand how this would work. Let’s say that you have selected the school you want to attend. During the application process, you will see that you are encouraged to do the FAFSA form and submit it with all of the other documentation.

This is not going to be used to determine whether or not you can attend, but it will help to establish if you need aid for the tuition required. There will not be offers for FAFSA loans that result from this application process. Instead, you will get a Student Aid Report (SAR) that is sent to the school’s financial aid office and which contains all of the data supplied in the actual FAFSA application. Any school’s financial office will then use their particular formula to determine what your EFC (estimated family contribution) will be, and how much aid you need to afford tuition for the year.

When Are FAFSA Loans Discussed

This is not a time when FAFSA loans are discussed because the financial aid office will still have to develop a package of aid based on your needs. Some schools use federal grants and work study programs to develop their packages, and some have funds administrated privately by the school. Only after the student’s complete package has been developed will the need to discuss FAFSA loans arise.

The FAFSA Loans Application Process

The application itself is not going to result in FAFSA loans, because as already said, there are really no such things as FAFSA loans. What will happen is that the student will be directed to the appropriate federal or state office through which loans are provided. Usually when someone says they have to explore options for FAFSA loans, they are actually investigating the different federal loans that can supply them with the monies needed to complete their year of college studies.

You should not worry if you find that your form for FAFSA has loans that are part of the package. Millions of people take federally backed low interest loans in order to pay their tuition. These are secure loans with fixed rates and flexible repayment periods, they are called FAFSA loans simply because they are something that results from a financial officer taking a look at an SAR and finding that the student needs to acquire the loan to complete the college year.