Financial Aid 101
Finding the perfect college for you blends the academic fit, social and cultural fit, and affordability factors all in one. However, affordability seems to be the trickiest factor of all.
College financial aid can feel overwhelming, but it's an essential tool for making higher education affordable. Here's a quick breakdown to help you get started:
Types of Financial Aid
Grants: These are need-based funds that you don’t have to repay, like the federal Pell Grant.
Scholarships: Typically awarded for merit, talents, or other criteria, scholarships are also free money for school.
Loans: These need to be repaid, often with interest. Federal loans, like Direct Subsidized Loans, have lower interest rates and flexible repayment options compared to private loans.
Work-Study: A federal program that allows students to work part-time while in school to help cover expenses.
How to Apply for Financial Aid
Financial aid doesn’t just appear for you during the college application process. You must apply and submit documentation each year.
FAFSA: The Free Application for Federal Student Aid (FAFSA) is the first step in applying for financial aid. It determines your eligibility for federal grants, loans, and work-study opportunities. Many colleges and states also use the FAFSA to award their own financial aid.
The FAFSA recently underwent some major changes by the Department of Education. You might have noticed the clunky rollout last year which impacted colleges, universities, and families across the United States. This year, the FAFSA is slated to open up on December 1. However, you don’t have to wait until then to set up a FAFSA account!
Visit https://studentaid.gov/h/apply-for-aid/fafsa to learn more about how to set up an FSA ID (Federal Student Aid ID), which is your username and password.
Pull together some documents, like parent (contributor) social security numbers, income and asset information, birthdates, and email addresses. You’ll need this info to get an account set up.
Check and make note of financial aid deadlines for your state and/or the schools you’re applying to. Do not wait to fill out the FAFSA as funds may be on a first-come, first-serve basis! Finally, do not wait until after financial deadlines have passed in order to apply.
Once you’ve filled out the FAFSA, you’ll received your Student Aid Index (SAI, formerly known as your EFC), which will determine how much financial aid you’re eligible for. Each school’s financial aid office will use this information to create a financial aid package for you. A lower SAI means you’ll be eligible for more financial aid.
CSS Profile: Some private schools require this additional form to assess your financial need more comprehensively. Expect more detailed questions than the FAFSA, so have your tax returns and other financial information handy.
Financial Aid Packages
Once you’re accepted into a college, you’ll receive a financial aid package that breaks down the types of aid you qualify for. This package often includes a mix of grants, loans, and work-study. Keep an eye out on the loan options that the college may offer you. Federal loans are definitely a better way to go as they often have lower interest rates, and subsidized loans have the interest taken care of by the government while you’re in school. After you graduate, federal loans also have lots of flexible payment options to help make your payments more affordable as you’re finding your first job or navigating your next educational steps. Private loans tend to have much higher interest rates, less flexible payment plans, and steep penalties for missing payments.
Once you’ve received financial aid packages from the schools you’ve been accepted to, be sure you understand EXACTLY what they are offering you, and how much you would be expected to pay out of pocket after financial aid. If you have any questions or concerns, always reach out to the financial aid office for clarification or to potentially ask for more aid in certain circumstances.
Deadlines matter: Missing the FAFSA or scholarship deadlines can significantly reduce your aid. Make sure to stay on top of important dates for both the FAFSA and any school-specific applications.
Other Tips for Funding Your College Education
If you’re looking for scholarships outside what a college offers you, there are a ton of resources to check out. However, watch out for scams! You should NEVER have to pay money to access scholarship information.
Finally, be sure to have that financial aid talk with family. Parents, make it clear what you will pay for and not pay for. Students, you should know that you have skin in this game too! Understand what the financial commitment will be for the whole family and make a plan together.
Check out these places and websites to start your scholarship search:
Local Resources
Scholarships offered more locally will have fewer people applying for them, so that means better odds for you! Definitely start here before you move on to national scholarships.
Check with your school counselor to see if there are any scholarships available for your school or community.
Check with local businesses if they offer any scholarships. Additionally, perhaps the company mom or dad works at may offer scholarships to children of employees.
Kiwanis Clubs, Rotary Clubs, Community Foundations, and other local non-profits usually have a large array of scholarships to check out.
Government Resources Pages
Studentaid.gov : Everything you need to know about the FAFSA and how to fill it out.
Cssprofile.collegeboard.org : Some schools also ask you to fill out the CSS profile, which is similar to the FAFSA but is used just for institutional financial aid (not government aid).
National Scholarship Databases and Searches:
Raise.me : Create a profile and earn micro-scholarships throughout high school for your grades, activities, and achievements.
Scholarships.com : Create a profile and get matched with scholarships that you’re eligible for.
Fastweb.com : Create a profile and get matched with scholarships that you’re eligible for.
Appily.com : Formerly known as Cappex, this is another scholarship database that can also help to match you to colleges all around the country.
Bigfuture.collegeboard.org : A fantastic resource for learning more about careers, colleges, search for scholarships, and financial aid.
By understanding these financial aid basics, you’ll be better prepared to navigate the financial aid process and make informed decisions about paying for college. This is absolutely a worthwhile investment into your future, but it’s important also to understand what your family can and cannot afford.
Stressed about your college search? Not working with me yet? Let’s chat. Your initial consultation is always free!