After you submit the FAFSA, you have the OPTION to take out loans. The FAFSA is also used to determine PELL eligibility. Some schools may require you to fill out the FAFSA for any institutional scholarship/merit aid.
If you actually want a loan, you have to complete additional steps, like entrance counseling and a signing a Master Promissory Note. If you don’t want to take out a loan, you don’t have to. Simply submitting a FAFSA does not mean you are taking out a loan.