Do you have to pay back FAFSA money?
Financial aid can be a complex process for students and parents. Typically, many questions come up: Will I get enough money to pay for college? What forms do I need to fill out? Do you have to pay back FAFSA money?
This last question about paying back financial aid that you receive through the FAFSA is a very important one. As student loan debt continues to grow students are being careful about how much money they take out to pay for college.
The short answer to the question: do you have to pay back FAFSA money? is it depends. Keep on reading to learn about the types of financial aid that you do and don’t need to pay back!
Financial aid that doesn’t need to be paid back
The good news for many students is that much of the money you are awarded through the FAFSA does not need to be paid back. This includes need-based financial aid grants that are awarded by individual colleges, as well as federal and state grants like the Pell Grant or Federal SEOG Grants.
All of this grant money is free money for you to use on your education. Usually, the only stipulation is that you may need to maintain a specific number of credit hours and GPA to remain eligible for your need-based grants.

Financial aid that needs to be paid back
All federal student loans fall into the category of financial aid that needs to be repaid. Federal student loans fit into the following categories:
- Stafford Direct student loans (both subsidized and unsubsidized)
- PLUS loans or Parent Loans
- Federal Perkins Loans
With the exception of the Perkins Loans which were phased out in 2017, these are all types of student loans that you might see in you financial aid award letter.
Student loan repayment can vary according to your loan terms and repayment plan. You can learn more about the various repayment options to decide which repayment option will make the most sense for you and your situation.
It is also worth mentioning that some students may be eligible for student loan forgiveness. Loan forgiveness, or “cancellation,” may be granted in certain situations including if you are disabled and are unable to work or if you teach or go into public service and make 120 payments.
Remember, you don’t have to take out all financial aid offered to you
One of the big misconceptions is that students need to take out all of the financial aid that is offered to them. This is not true and ultimately you can decide to take advantage of specific financial aid options (or not).
Obviously, you will want to accept all of the grant money awarded to you. However, it may not always make sense to take out all of the student loans offered to you. You should always do the math and calculate the amount of money in student loans that you absolutely need to take out. When evaluating this, you should be looking at the student loan interest rate, as well as the specific terms of the student loans.
Remember, winning outside scholarships and merit scholarships will allow you to take out less money in student loans, which is always a good thing!
Key Next Steps for Students
- Complete the FAFSA by the appropriate FAFSA Deadline to ensure that you are considered for need-based financial aid.
- Some colleges may also require the CSS Profile to qualify for financial aid, so you will want to make sure that you complete the CSS Profile by the school-specific deadline.
- Carefully review your financial aid award letter so that you have a thorough understanding of what your financial aid package includes, as well as the net cost of the degree (taking into account the total cost of attendance).