This article describes the steps involved in getting a student loan for college. The majority of students will complete these steps, but some students may be required to complete additional steps depending on their school’s financial aid process. If you are having difficulty with any of these steps, please contact an Edfinancial Services customer service representative.
Step 1: Completing the FAFSA
The Free Application for Federal Student Aid, or FAFSA®, is the key to many types of financial aid. The FAFSA is required to obtain a federal student loan. A student will complete the FAFSA each year for the applicable school year.
The FAFSA asks the student for basic information such as name, date of birth, Social Security Number, and what school the student plans to attend. The student may also have to provide income tax information for himself and his parent(s). The FAFSA can be filled out on paper or online through the U.S. Department of Education’s FAFSA website. To complete the FAFSA online, the student and/or parent, as applicable, should first apply for an FSA ID from the Department of Education; the FSA ID allows you to sign the FAFSA electronically. When complete, the Department of Education reviews the FAFSA.
Step 2: Reviewing the FAFSA
The FAFSA Simplification Act created a redesign of the process to award federal student aid. Beginning in the 2024-2025 aid year, the Student Aid Index (SAI) replaced the Expected Family Contribution (EFC). The SAI is a formula-based number ranging from –1500 to 999999. The SAI is an evaluation of the financial resources that may be available to contribute to the expense of a student’s education. Household income and assets are used to calculate the SAI. The SAI calculation also implemented separate eligibility determination criteria for Federal Pell Grants. The lower the SAI, the higher the potential for need-based financial aid.
“Contributor” is a new term introduced on the 2024-205 FAFSA from. This refers to anyone that is required to provide their information and signature on the FAFSA. All contributors must also provide consent and approval to have their federal tax information transferred directly into the FAFSA via a direct data exchange with the IRS. A contributor may include the student, the student’s spouse, a biological or adoptive parent, and/or the parent’s spouse(stepparent).
A dependent student will be asked to provide information for both parents. If the parents are divorced and no longer living together the parent that provides the greater support to the student will need to complete the FAFSA. To be considered an independent student, you must be at least 24 years old, or are a veteran of the U.S. armed forces, or are active duty, or be married, or have dependents, or are homeless, orphan/former foster youth, emancipated minor or was in a legal guardianship.
Step 3: Results of the FAFSA
The Department of Education will electronically send a FAFSA Submission Summary (FSS), which replaces the Student Aid Report (SAR), to the student summarizing the information reported on the FAFSA form. The Institutional Student Information Report, or ISIR, is also generated by the Department of Education and sent to the school(s) listed by the student on the FAFSA. The ISIR contains information similar to that on the FSS and is used by school(s) to determine how much aid the student may receive. The results of the FAFSA will be available after the application is processed, and you may check the status of your form by logging in to your account and finding your application status in the Status Center under “My Activity”, which displays after you have already started or completed a FAFSA form. The status of your FAFSA form will be one of the following:
- Draft: Your section of the FAFSA form is incomplete.
- In Progress: You provided your consent, approval, and signature to your section of the FAFSA form, but the FAFSA form has not been submitted yet.
- In Review: Your FAFSA form was submitted but has not been processed yet.
- Action Required: You are missing your consent and approval or signature or the FAFSA form was processed, but a correction is required.
- Processed: Your application was processed successfully. No further action is needed.
- Closed: Your FAFSA form was never submitted and can no longer be submitted because the federal FAFSA deadline passed.
Step 4: The Award Letter
Schools take the information on the ISIR and the student’s admission application to create an award letter for the student. The award letter may be received electronically or through the mail and tells the student how much he can borrow in federal loans, as well as any scholarship or grant money he may elect to receive. The student must wait for this letter before he can move to the next step.
Step 5: Accepting the Money
With award letter in hand, the student can choose how much money he wants for school, up to the full amount offered in the award letter. Students can accept the full amount offered to them, or they can take a partial amount depending on their needs and expenses. The student must accept the money through the school’s preferred process, which usually involves paper or electronic forms. You should accept awards only from the school you plan to attend.
Step 6: Getting a Loan
Your school will provide you with information on how to apply for a student loan. If you are a first-time borrower, you will sign a master promissory note, or MPN, in order to receive loan funds. You may also be required to complete entrance counseling which will inform you of your rights and responsibilities as a borrower. Once your loan funds are disbursed, they will be sent to your school and will be applied toward your account. You should contact your school’s financial aid office if you have questions about your student loan.