Do You Have to Pay Back FAFSA?

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Mark Kantrowitz

By Mark Kantrowitz

April 14, 2021

Students who are new to financial aid sometimes ask whether they will have to pay back FAFSA. 

The FAFSA is the Free Application for Federal Student Aid. This free application form is used to apply for federal student aid, as well as financial aid from state governments and most colleges and universities.

FAFSA is not the financial aid itself, so you do not have to pay it back.

However, students may use the term FAFSA to refer to the financial aid awarded after the student files the FAFSA.

Federal student aid that is awarded based on the FAFSA includes the Federal Pell Grant, Federal Work-Study and federal student loans. The FAFSA is also used to award state grants and institutional grants from colleges and universities.

Grants and scholarships do not need to be repaid unless you do not meet specified requirements, if present. Student employment is earned and does not need to be repaid. 

Student loans, on the other hand, must be repaid, usually with interest. Federal student loans may be subsidized or unsubsidized. If your loan is subsidized, the federal government pays the interest while you are in school and during grace periods. Interest on unsubsidized student loans begins to accrue right away, and it is not covered by the federal government. Subsidized loans are awarded based on a student’s financial need, unsubsidized loans are not.

So, you do have to pay back some types of FAFSA, but not all types of FAFSA.

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