Financial Aid Help

College costs alone deter thousands of qualified students every year from applying to schools where they might flourish. This is a shame! With some advanced planning, a little patience, and a willingness to ask questions, you may find that there are more affordable options out there than you think.

When thinking about financial aid, you can get lost in what seems like a maze of regulations and rules, many of which are subject to change. Cost alone deters thousands of qualified students every year from applying to colleges and universities where they might be a great match and flourish. This is a shame! With some advanced planning, a little patience, and a willingness to ask questions along the way, you may find that there are more affordable options out there than you think.

Cost should not deter you from looking at and exploring your possibilities. Exploring your college options and making sure you are academically qualified for the institutions you’re considering is overwhelming enough—overwhelming in its excitement and possibility, but also sometimes in the amount of information you need to seek out and learn. When you throw finances and costs into the mix, the process can become even more daunting.

In these challenging economic times, more people than ever qualify for financial aid, which means there is more competition for certain types of aid. Luckily the federal government and many state governments have remained committed to helping middle/lower-income families afford the cost of a college education. And most universities have maintained—and in some cases even expanded—their funding for programs that assist their students financially. So rest assured, there is help out there.

Not everyone qualifies for every type of aid, and if your family has just won millions of dollars in the lottery, you are not going to find yourself eligible for much need-based aid. But even in that case, you may qualify for aid based on academic or curricular merit.

Of course, most people do not fall into the lottery-winner category! Many people worry about the cost of college, but there are also numerous options to help afford higher education.

So let’s get started! First of all, take a deep breath, and think of financial aid systematically. There are certain rules and procedures with which you should be familiar, and as you develop the list of universities to which you want to apply, you can see where those schools fit in the overall architecture of financial aid in the United States.


At one time, many U.S. universities were free, and even those that charged tuition sometimes gave out scholarships based upon nothing more than a personal appeal to a dean or other college official. Beginning with the New Deal in the 1930s, American society and societal expectations began to change. After World War II, formal financial aid programs accelerated under government auspices. Perhaps one of the most successful was the GI Bill that helped millions of former servicemen and their families move into the middle class because of the government’s financial help with college expenses. (Ask your parents or grandparents if your family benefited this way!) This commitment to veterans continues to this day, something for which we can all be very proud. The array of financial aid offerings flourished particularly during and after the 1960s, leaving students with many options today.

Need-based and merit-based aid

Sometimes these categories overlap, but generally need-based aid is determined by a government formula for what a family of a certain size and income should be able to pay each year. Merit-based aid may also take need into account, but it is primarily based on the student’s talent, ability, and interests.

Keep in mind, almost all universities in the United States offer need-based aid, and most offer at least some merit aid. People often think of merit aid as being limited to private universities and very talented athletes only—not true! Private universities offer more aid in many cases, but they typically cost quite a bit more than most public options.

Getting started with need-based aid

Need-based aid begins for each student with the Free Application for Federal Student Aid (FAFSA), which can be filed online at after January 1 of your senior year in high school, or after January 1 of the year in which you want to transfer (if already in college), and must be re-filed once you are in college for each subsequent year. For example, if you are graduating from high school in 2012 and want to apply for aid for the fall 2012 semester, you will file the FAFSA after January 1, 2012. If you are at a community college and want to transfer to a four-year university in fall 2013, then you would file after January 1, 2013.

All universities require the FAFSA for need-based aid determination. Many will also require a supplemental form such as the College Board’s CSS/Financial Aid PROFILE (, or other similar form. Some colleges will even ask you to fill out a supplemental form that they themselves have designed for their own use. Check with each university to which you are applying to see what they require—and do so early in the process, preferably by the fall of your senior year in high school.

Something to keep in mind: the FAFSA does not take into account the value of your parents’ place of residence (a relief for many homeowners in expensive areas like San Francisco, Manhattan, and Honolulu), but some supplemental forms do ask for and consider it. This may make a difference in the amount of aid you are awarded by different institutions, and there are other rules about what is excluded on the FAFSA and what is included in supplemental forms. Again, as with all else in financial aid, don’t be discouraged—explore your options academically and financially, and ask financial aid counselors whenever you’re unsure!

Calculating need

A federal formula is used to calculate need, with adjustments at some schools that use supplemental forms in addition to the FAFSA. Generally, the information you put down on the FAFSA (and supplemental forms where you have to file them) is used to determine an Expected Family Contribution (EFC). This is the amount your family can be reasonably expected to spend each year to help you pay for college. The FAFSA formula takes into consideration the number of people in your family, number attending college at the same time, the age of your parents, income, and other types of money or investments that may be available to your family. These figures result in the Expected Family Contribution number. Again, the EFC may be different at a school that also requires a supplemental form, as those forms may include additional assets. Need is then determined by taking the cost of attendance (COA, including tuition, fees, room and board, books, and estimated miscellaneous expenses), then subtracting the EFC (based on FAFSA or FAFSA plus supplements), to arrive at the amount of money the student “needs” in order to attend college.


Don’t be put off by sticker shock! Higher education has gotten more expensive in recent decades, and today there are widely divergent costs. Within the public sector, costs vary quite a bit. For instance, California community colleges are much less expensive than the California State University system, which is less expensive than the University of California system—even though all are public.

There are still many universities, especially public, that have tried very hard to keep costs down. There are also many universities than may surprise you by the variety and availability of the aid they offer.

Merit aid

Merit aid comes in different forms. Sometimes it’s a state grant based on need, GPA, course pattern, and/or SAT or ACT scores. However, much of it is based only on talent or achievement and has nothing to do with need. It may be available for athletic talent; high academic achievement; music, art, or dramatic ability; student government or community service; or other activities.

How do you apply? First of all, ask each university what they offer and what you need to do to be considered. You may find that for state grants you have to file the FAFSA and perhaps other forms in your senior year or prior to transferring. For example, in California your school must file a GPA verification form by March 1 of your senior year, and you must have filed the FAFSA by that date to be considered for a Cal Grant, California’s state grant program.

Sometimes, purely merit scholarships are awarded automatically at the time of admission, if you are a high achieving student in the eyes of the school to which you are applying. Others require supplemental scholarship applications, and some require auditions or contact with a coach or teacher. Again, ask at each university. Tell them about your talents and interests, and find out what they offer and how to go about applying.

Remember, don’t be put off by cost or intimidated thinking it will be too hard to qualify for aid. Give it a try! Apply to a variety of schools with different costs and don’t be afraid to seek out some smaller or less “famous” schools that offer a great education and a lot of financial assistance.

Keep in mind you will have to apply again every year for need-based aid, but if your family situation stays pretty much the same you should have the same aid package year-to-year. If you receive a merit scholarship, ask about the terms: Is it for all four years? What do you have to do to renew each year? Do you need to maintain a certain GPA? And so on.

What does a financial aid package look like?

If you qualify for aid, it will probably come in several forms, such as grant money that you do not have to pay back, loans, and possibly federal work-study. My advice on federal work-study? Take it! You could get a great job on campus, gain some terrific experience, and get paid!

According to Sallie Mae’s “How America Pays for College 2011” study, conducted by Ipsos, the average American family funds higher education with:

  • 33% grants and scholarships
  • 30% parents’ income and savings
  • 15% student borrowing (loans taken out by the student)
  • 11% student income and savings (high school jobs, jobs during college and breaks, and may include federal work-study)
  • 7% parent borrowing on the student’s behalf
  • 4% help from relatives and friends

And while you don’t want to be burdened with too much debt, you should not be too afraid of taking some loans if you need them and they are offered to you. There are some excellent loans offered through the federal government with low interest rates, and you don’t have to pay them back until you’ve graduated. There are others too, but you definitely should only take as little loan money as you absolutely need, and try to maximize all other forms of aid before taking loans that have higher interest rates.

Lastly, keep talking to the financial aid offices! If your circumstances change—for instance one of your parents loses a job—let the office know. If you just feel that you can’t make it with what they are offering, talk to a financial aid officer. Financial aid office employees are there because they like helping students and believe in offering assistance to students and families.  

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