Is FAFSA a Loan?

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Mark Kantrowitz

By Mark Kantrowitz

September 25, 2020

The FAFSA is not a loan. It is an application form. However, you can use the FAFSA to apply for financial aid and federal student loans.

The FAFSA, or Free Application for Federal Student Aid, is used to apply for several types of financial aid, including grants, student employment and federal student loans.

Grants are a form of gift aid, which does not need to be repaid.

The FAFSA is what determines whether or not you can participate in work-study. The money awarded for work-study needs to be earned by working a part-time job, and does not need to be repaid. Read our Complete Guide to Work-Study.

Student loans, on the other hand, must be repaid, usually with interest.

Filing a FAFSA is a prerequisite for receiving several types of student loans, including:

  • Federal Direct Stafford Loan
  • Federal Direct PLUS Loan, including Parent PLUS and Grad PLUS loans

The federal government requires you to file a FAFSA before you can receive a Direct Loan to ensure that you get all of the other aid for which you are eligible. 

Private student loans and private parent loans do not require the FAFSA.

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