The Ultimate Financial Aid Handbook

Freelance Writer

College: you’re ready to make it happen. You’re working hard to keep your GPA up. You know what your application essay is going to be about. Maybe you even picked out posters for your dorm. Then, it hits you . . . there’s the not-so-slight issue of figuring out how you’re going to pay for it all.

Financial aid can be very complicated and overwhelming for students and their families, but with a little help, you will be well on your way to finding the money you need to pay for school. Where should you start? Right here.

The FAFSA demystified

The money you get through financial aid typically falls into one of two categories: loans, which are monies you have to pay back, or “gift aid,” which you don’t have to pay back. But in order to be considered for that precious gift aid—to be considered for most aid, really—you need to complete the FAFSA. The FAFSA, or Free Application for Federal Student Aid, is the form used by the federal government and most colleges to determine your aid eligibility.

Filling out the FAFSA should be your #1 financial aid priority. Even if you and your family don’t think you’ll qualify for aid, you have nothing to lose by trying. You never know what you might be eligible for: federal grants or loans, state aid, or college-specific grants or scholarships.

As for what to expect when you and your family fill it out, the FAFSA will ask you questions about your income, your parents’ income and assets, and your family’s demographics. (Historically, the FAFSA has been a very long, tedious form, but, luckily, in recent years, it has been simplified.) However, in many cases, funds are allocated on a first come, first serve basis, and the financial aid pot can run out, so you want to be at the front of the line! Also, many schools have internal deadlines for submitting the FAFSA in order to qualify for aid—so make sure you know what those deadlines are for your schools.

It’s generally better to complete the FAFSA online too:—accept no imitations! Even though the paper application is available, applying online is advantageous because the program will automatically remove questions that don’t apply to you. For example, if you indicate that you don’t have any assets, you will not see any questions about assets. This intelligent skip logic helps cut down on the amount of confusion families may face.

Also helpful is the IRS retrieval tool. Once your taxes are filed, you can use this relatively new service to transfer your income information directly from your tax return. This will prevent you from entering numbers incorrectly or misreading the instructions.

If you have questions along the way that a simple Google search won’t answer, you have options. You can call 800-4FED-AID to ask specific questions, or you can call the schools to which you’re applying. According to Alyssa McCloud, the Vice President of Enrollment Management at Seton Hall University, financial aid officers are always willing to answer questions from prospective students—just keep in mind that, for all their knowledge, they don’t know everything. “One thing that’s important for families to understand,” says McCloud, “is that often they want a financial aid office to provide answers to questions that they can’t answer.” Questions like, How much money will I get? What will my loan package look like? “They may be able to tell you about merit aid, but [with] need-based aid and federal aid they really can’t tell you much about it until the FAFSA is processed.”

Finally, be forewarned that you’ll need to complete the FAFSA every year. Even if you didn’t receive aid in the previous year, apply again! Your eligibility can change from year to year.

Smart scholarship searches

The FAFSA will determine which loans and grants you can receive from the federal government and colleges, but scholarships are a great way to get additional funds. Mark Kantrowitz has made a career out of giving advice to college applicants on and, and offers some of his top tips for making the most out of your scholarship search:

  • First and foremost: apply to every scholarship for which you are eligible. The worst mistake you can make in this process is not doing so, Kantrowitz says. And it’s not as time consuming as you might think. After the first six applications or so, you can start reusing essays and you’ll most likely find a rhythm, making each application less time consuming.
  • Answer all the questions. This applies to scholarship applications and scholarship search engines. Whether you’re completing scholarship applications online or on paper, always double check to make sure you’ve answered every question.
  • Keep track of deadlines. Use a calendar app on your phone or write them on a calendar you can post on your bedroom wall. You don’t want to miss opportunities for funding by simply missing a deadline.
  • Be yourself and tell the truth. “Anything you say in your essay can be fair game,” Kantrowitz says. He strongly cautions applicants to not exaggerate their skills or interests. For example, if you say you are a singer but the only time you sing is in your shower, scholarship committees may not look favorably on that kind of exaggeration.
  • Write about things that interest you. Just as with application essays, be yourself in your scholarship applications and write about something that excites or interests you instead of telling the committee what you think they want to hear.
  • Record your first draft of your essay. Essay competitions may seem like too much work, but Kantrowitz offers a way to make essay writing easier. “Instead of writing it or typing the essay, answer the question out loud while recording your response,” he advises. “Then, transcribe your response afterwards.” This technique can be faster and will allow you to get all your thoughts out. After you transcribe your words, make sure you go back and add some structure or fill in any gaps to make sure it’s well written.
  • Proofread. Don’t rely on spellcheck to catch all your mistakes. Double-check everything before you submit your application.
  • Create a résumé. Or at the very least, make a list of everything you did in high school, including community service, part-time jobs, honors and awards, extracurricular activities, and leadership positions. Keeping a list like this close by while you fill out applications will ensure you don’t forget anything.

A word of caution as you scour the Internet looking for scholarship opportunities: you should never have to pay to get information about a scholarship. If a company or organization is requiring you to pay money for an application or information, it’s probably a scam.

Saving for college before senior year

“Your greatest asset is time,” says Kantrowitz. The earlier you start saving for college, the less you’ll have to borrow in loans. You also don’t have to wait until senior year to start applying for scholarships. Several scholarships are available for students under the age of 13, and you can find scholarships at any point between 9th and 12th grade. “The sooner you start searching, the more chances you will have to win a scholarship. It’s not just a matter of skill; it’s a matter of luck,” Kantrowitz advises. The scholarship game is all about volume. If you submit dozens of applications over a few years, you will have a much better chance of getting money than if you wait until senior year and only submit a few applications.

Seton Hall’s McCloud encourages young students to focus on achieving academically throughout those years as well. If you have a high GPA, you may be eligible for more merit-based aid from colleges. Remember, colleges are typically making decisions about scholarships based on your grades from 9th through 11th grade—that’s when it’s really time to shine academically.

Deciphering your award letter

You got into college! After you and your family cheer and do a happy dance, you may notice an award letter in your big packet of papers. “One of the most confusing aspects of the financial aid process can be reading and differentiating award letters,” says Kristina Tirloni, a spokesperson for the Texas Guaranteed Student Loan Corp. Your best sources of information are the financial aid officers at specific schools. But what should you ask them?

There may be a lot of terminology you don’t understand. In that case, talk to a financial aid officer, your high school college counselor, or an organization like the Texas Financial Aid Information Center to have them walk you through your award letter and help everything make more sense.

Kantrowitz says every student should ask schools about front loading. Front loading is when a school will provide more grant money freshman year than in other years. This could mean the cost of college will go up after your freshman year. Ask how your financial aid package might change over the next four years.

Furthermore, different colleges have different ways of dealing with scholarship money. At some schools, the scholarship money you win will go to decrease the grant that the school gives you. This kind of set up doesn’t help you much. But at other schools, the scholarship money will decrease the amount of money they offer you in loans. This is the best op-tion and could potentially save you a significant amount of money, especially if you are diligent about applying to scholarships. Double-check each school’s website or call and ask how they handle scholarship money.

Of course, life can be unpredictable, and if something happens between the time you complete the FAFSA, like a parent loses a job, and the time you get your award letter, let colleges know. In some cases, they will be able to adjust your award.

The student loan situation

Your financial aid package will likely include some loans, and you may see words like “subsidized” and “unsubsidized” surrounding them. Subsidized loans don’t accrue interest while you are in school while unsubsidized loans do. In the long run, you will most likely end up paying less with subsidized loans.

In many cases, families will borrow more money than they actually need. The amount you see on your award letter is typically the maximum amount of subsidized loans you can get, but that doesn’t mean you have to take all of it.
McCloud suggests that you and your parents sit down and figure out what you can contribute to tuition, living expenses, books, and supplies. If you can use a part-time job to pay for books and supplies, that’s less money you have to borrow.

Remember, taking out loans is a big decision; you’ll have the responsibility of paying back the money with interest. McCloud advises families to consider other options before borrowing money for school, particularly if you are considering private loans, which should be viewed as a last resort. Try to get scholarships and work with the college of your choice to figure out a payment plan.

If you have questions about loans, feel free to call the financial aid offices at the schools from which you received award letters. McCloud also suggests that you ask multiple schools the same questions. “It will help you get a better picture,” she says. One financial aid officer may give you information that another officer doesn’t.

True, the whole financial aid process can be overwhelming and stressful. And though McCloud doesn’t downplay the stress, she also advises that you cope by asking for help and starting the process as early as possible. The more you know about the financial aid process and money management, the easier all of it will be.

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