In case you weren’t already painfully aware: financial aid can be one of the most important pieces of the college puzzle. The yearly tuition at private colleges currently goes as high as $55,000, and even state school tuition is rising at a staggering pace. Understandably, the average family doesn’t cover this entire cost on their own. There are some colleges that will offer aid to 100% of students, and there are some that certainly won't. It’s important to remember that financial aid isn’t all “free” money like scholarships and grants. Federal student loans and work-study count as college financial aid too. Financial aid is a big deal, to say the least. But how do you get it and where do you start? That’s where this guide comes in. It covers everything you need to know about college financial aid and digs into the FAFSA, grants, scholarships, loans, and work-study.
What is the FAFSA?
Before you can dive into the types of financial aid below, you need to familiarize yourself with the mother of financial aid applications, the FAFSA, aka Free Application for Federal Student Aid. The FAFSA is arguably your most important ally in your quest to get financial aid for college. The government uses the information you provide on this form to assess your eligibility for grants and scholarships, federal loans, and work-study. In addition, colleges, universities, and even scholarship organizations might use the FAFSA to determine your eligibility for other aid. In short, it’s one of the best, easiest, and fastest ways to get money for college.
How do I fill out the FAFSA?
Filling out the FAFSA has the reputation of being a drag, but in recent years the government has streamlined the process. To begin, visit the US Department of Education’s FAFSA page. Although online submission is encouraged, there is also a paper form. (If you’re doing it online, be sure to fill out the form directly through the federal website—fafsa.gov— and not through a third-party site!) Ask your parents to help you with the FAFSA, as you’ll need information about your family’s income, taxes, and assets as well as your own.
When should I file?
Students can send in their FAFSA as early as October 1 the year before they intend to enroll in college, using tax info from the previous year. For example, if you were planning to start college in the fall of 2022, you would file the FAFSA on or after October 1, 2021, with tax info from 2020. Just keep in mind that state financial aid deadlines may differ and that certain types of aid are first come, first served. So it’s in your best interest to file ASAP after October 1. Sure, the schedule is a little confusing, but you’ll get used to it—especially since you need to file the FAFSA every year you plan to attend college.
Apply no matter your situation
Many people assume that if they aren’t in a very low-income situation, they won’t qualify for financial aid, but that’s typically not the case. At any rate, the FAFSA is free to apply and fairly easy to do! So what have you got to lose? Even if you don’t currently qualify for aid, if your circumstances change—for example, if a parent loses a job and the amount your family is able to contribute to your education drops drastically—you want to be sure you have all recent FAFSAs on file so you will be eligible for the highest possible amount of aid in the future.
Free money: grants and scholarships
The ideal financial aid scenario, of course, is to find a way to get people to give you money for college that you don’t have to pay back. Each year almost $50 billion in grant and scholarship money is awarded by the US Department of Education, private donors, and schools across the country. Colleges and universities award grants and scholarships based on need, talent, extracurricular background, or myriad other reasons.
Grants are a type of aid usually awarded by the federal government, often based on student/family financial need, that do not need to be repaid. The Department of Education sends the money to colleges, which credit students’ accounts. The most common type of federal grant is the Pell Grant, which is available to all undergraduate students who demonstrate financial need. To qualify, students must complete and submit the FAFSA. The maximum amount you can receive through the Pell Grant changes yearly. However, the amount you receive is based on a number of factors, including your financial need, the cost of attendance at your college, and how long and in what status you plan to attend (i.e., part time or full time).
One of the benefits of the Pell Grant is that it’s not affected by other aid, so the amount you receive won’t drop if you get any other scholarships. Additionally, each college or university receives enough money from the federal government to cover all the students who qualify, so there’s no danger of the money running out if you’re not the first to apply. The federal Supplemental Educational Opportunity Grant (SEOG) is another type of grant awarded to students with an “exceptional” level of need. The program is administered through the financial aid offices of all participating colleges, so you should get in touch with your school to determine whether they participate and see how to apply. Awards can range from $100–$4,000 based on your need, and schools must pay out at least once per term. Any SEOG funds you are awarded may be credited toward your tuition or paid to you directly, depending on the college. Just like with the Pell Grant, students should fill out the FAFSA to determine their SEOG eligibility. Unlike the Pell Grant, however, each participating college only has a certain amount of SEOG funding to work with, so this option is essentially first come, first served.
Other federal aid
There are a number of other financial aid options available through the federal government aside from the Pell Grant and SEOG. For example, if you plan to become a teacher in a high-need, low-income area of the country, you may be eligible for the Teacher Education Assistance for College and Higher Education (TEACH) Grant. Additional government money is available for students who have completed community service with organizations like AmeriCorps, those with specific cultural backgrounds, children of service members, and more. A range of scholarships are also available for students with specific interests, such as scholarships from the National Institutes of Health for students interested in studying science and medicine.
Related: Financial Aid Terms You Need to Know
Institutional scholarships awarded by your college
Most colleges and universities offer a range of scholarships for incoming students. Many institutional scholarships are based either on financial need or merit (like grades or honors status), but schools can also offer them as an award for different reasons, such as being an active member of the school community or having a particular major. The availability of scholarship money varies—a lot—from school to school. Although private colleges generally have higher tuition, they also often have more award money available than state schools do. Colleges will differ in how you win scholarships too; some have additional financial aid applications, while others award scholarships based on your general application for admission. In any case, it’s important to ask your college financial aid office for scholarship information before you begin.
Private/external scholarships awarded by organizations
Every year thousands of students apply for and receive scholarships from a variety of private funders and agencies. External scholarships can be the most surprising and rewarding sources of money to pay for your education. While many are based on academic merit, you can also earn scholarships for a variety of reasons, including your athletic abilities, cultural or religious background, family military history, hobbies, musical or artistic talents, professional interests or job, and more.
Think creatively and search diligently for scholarships that fit you. First of all, you can search for scholarships online on lots of different websites! But you should also check with cultural or recreational organizations you and your parents are part of, or ask your parents to see whether their employer might have a scholarship program available to you. Both your high school counselor and college financial aid counselors can be invaluable resources in your search for scholarships too; ask them if they can direct you to a listing of scholarships for students with grades and interests similar to yours.Finally, keep an eye out for scholarship scams. If an award seems sketchy, avoid it or ask your counselor if it’s a scam. Remember, there’s no such thing as a “guaranteed” scholarship or a scholarship you need to pay to apply for. At the end of the day, if it sounds too good to be true, it probably is.
Borrowed money: federal and private student loans
Once you’ve exhausted your grant and scholarship opportunities, loans can help cover the difference—but you need to consider the risks before you commit.
Federal loans tend to have lower interest rates and more flexible repayment plans than private loans. So before you look into private loans, exhaust all your federal loan options. There are several types of federal loans available, and as with grants, you can apply for all of them using the FAFSA. The Stafford Loan is the most common type of loan for undergraduates. There are two types: subsidized and unsubsidized. Subsidized loans, which are awarded based on financial need, don’t accrue interest while you’re in school. Unsubsidized loans are not need-based and accrue interest while you’re in college. Many students are offered a combination of the two by the government. Through the Stafford program, students who are financially dependent on their parents—and most undergraduates are—can borrow up to $31,000 over the course of their college education; financially independent students can borrow up to $57,500. It’s also important to be aware that the federal government may change these loans terms during your time in school. Your college or university may give you a heads up, but you should still pay attention!
Parent PLUS Loans are another federal option. They have a low interest rate, and significant amounts of money are available, so they are a great source of money to cover what you can’t get from the Stafford Loan. However, there are a few caveats: unlike other federal loans, they are available only to creditworthy borrowers and require a credit check. Additionally, if the student defaults on loan payment, parents will also be subject to collections. However, if you and your parents have a good credit history, they are still a great alternative to private loans.
Private loans can help fill the gaps when grants and federal loans won’t cut it. You’ve probably heard the names of private lenders before—companies like Sallie Mae and Student Loan Network are some of the most well known. If you’re considering private loans, contact your college’s financial aid office to get more information. Many schools work with a preferred lender to get special interest rates. In addition, loan limits, fees, and interest rates can be incredibly difficult to understand. College financial aid officers deal with these loans all the time, so they can tell you what the terms mean in plain English. And if you are able to pay some of your private loans while you’re in college, do it! This can save you lots of money in interest down the road.
Earned money: work-study
Another way to help pay for college is federal work-study. Work-study is only available to those who qualify (determined by the FAFSA), but if you do, it can be a great way to pay for smaller expenses like books and food while at college. Part-time work-study positions are offered through your college and pay at least federal minimum wage. The total award and hours available are based on your level of financial need, your school’s total funding, and when you apply. Many work-study jobs focus on civic education or your field of interest, so they can provide excellent work experience too. Other more general jobs can include things like working at the sign-in desk in your dorm, assisting RAs with administrative tasks, or helping out in the school’s computer lab or library. Some work-study jobs even allow students to do their homework during down time—and what could be better than getting paid to study? See the Work-Study Jobs page on the US Department of Education’s Federal Student Aid site for more information.
Now that you have all the financial aid info you need, it’s your turn to uncover which opportunities are right for you. Investigate and understand your options thoroughly, fill out the FAFSA to qualify for government grants and loans, and then talk to your school counselor about other funding options. With a combination of free, saved, and earned money, you can minimize your college debt and focus on the more important (and fun) parts of college!
Want money for college you don’t have to pay back? Check out our Featured Scholarships page for awards you could apply for.