I think you're asking about student loan repayment. The FAFSA is the Free Application for Federal Student Aid and is the online application submitted each year to determine eligibility for financial aid, both from the federal government as well as the state and the universities.
Federal student loan repayment begins when you graduate, quit, or drop below half time units. Some loans have a 6 month grace period. You and your son should be notified when the first payment is due. To answer your question, he has to be enrolled in at least half time units to avoid going into repayment.
To respond to the rest of the situation, you need to communicate limits and expectations. I'll write about how we're handing this with out college age students.
Child #1 is finishing is A.S. transfer degree this spring, with plans to transfer to a private university if the financial offer is good enough. Even though this is his first choice school, if the financial aid package isn't good, he'll go to a state school. Either way he will live at home.
Child #2 is also finishing community college with an A.S. transfer degree. Because he wishes to move out, he will be going to the local state school. We won't pay private university tuition in this situation because he'll have to work more hours to support himself, which will likely cause his academic performance to suffer. We will pay the state school tuition as long as he meets our expectations, which include not failing classes and not having his GPA drop below 3.0 -- if either of these things happens he is a) required to pay us back for any failed classes, and b) will have to take over paying for his own education if he drops below a 3.0 GPA.
Both children have part time jobs. They are currently responsible for paying for their own clothing, any junk food they want, their own entertainment and hobbies, incidental expenses, etc. When child #2 moves out he will have to get his own cell phone plan and car insurance (once he gets his license). He can stay on the medical and dental insurance but will be responsible for his copays. The way we see it, wanting the independence of living on his own requires taking on the responsibilities and expenses of living on his own. Our agreement had always been that they would live at home through university. He wants to change that, so he has to take on the cost.
We haven't bought a car for either child. We have one car shared by all of us, although child #2 doesn't have his license and if he doesn't take the initiative, he never will. We've offered to pay for driver training once he gets a permit, which we also did for his brother. It's possible we will provide him with a used car (in the $5K range) when he starts state school. We don't want him to fail at attaining his degree -- we just want him to take financial responsibility for himself if he chooses to move out.
In general, we've been slowly turning off the tap for a few years now, with the goal to have them capable of financial independence once they attain their degrees and find jobs in their chosen fields. For example, neither of them will move out and still be on our cell phone plan. I don't care if it would save them a few dollars. I see staying on cell phone plans as a larger problem of parents providing economic outpatient care to adult children. My dad kept my sister (and her husband) on his plan until she was 43 years old because she whined and pleaded, and of course that wasn't he only way he helped. He subsidized my brother for years as well, only stopping when my dad lost his business and couldn't find a job for awhile. My FIL was subsidizing DH's siblings all the way up until his death (when he died BIL was 39 and SIL was 48), giving rent money, giving them his used cars, etc. My experience has been that adult children who aren't required to support themselves don't learn necessary financial skills and likely never will. My sister still expects handouts. My BIL and SIL still rely on MIL to bail them out (SIL is living with MIL because she can't afford to live on her own).
If your son isn't going to school and is making that kind of money, stop undercharging him for food. Start charging him rent. Tell him to buy a car. Do what you can to make him financially independent.
