Financial Aid 101: Get the Money so You Can Get the Education
If you are looking for ways to fund your college years, understanding how to get financial aid will help you achieve your goals. Financial aid for college is awarded as loans, grants and scholarships.
Loans may be federally, state or privately funded and must be repaid. Grants and scholarships come from federal, state and local governments, private foundations, educational institutions and corporate and civic organizations. Grants and scholarships do not require repayment as long as the student fulfills any requirements associated with the award.
The first step in applying for college financial aid is to complete the Free Application for Federal Student Aid (FAFSA) each year that you are in school. Even if you don’t qualify for federal aid, many other organizations and institutions that provide aid require the FAFSA.
Federal aid is based on several factors. The expected family contribution (EFC) determines how much the student and family must contribute to the cost of college. This may vary from year to year as financial situations change. The Department of Education has strict guidelines defining whether a student is classified as dependent or independent. Dependent students are required to include family financial information. If a student has unusual circumstances that affect dependency, this must be documented and an override requested.
If you are denied aid or your award is not enough, a school counselor or financial aid officer can help you learn how to appeal financial aid decisions. Appeals should present valid reasons why the decision should be reconsidered and include special circumstances that affect your ability to pay for college such as loss of a job, caring for elderly parents or high medical expenses.
School financing options consist of several types of loans, grants and work-study. Stafford loans are subsidized or unsubsidized. For subsidized loans, the government pays the interest while you are in school. For unsubsidized loans, all interest is paid by the student. The amount of a Stafford loan is determined by the academic level of the student and, for dependent students, whether parents were awarded a federal Parent Loan for Undergraduate Students (PLUS) loan. Stafford loans have fixed interest rates.
Federal Perkins loans are awarded by participating colleges to students of great financial need. Interest rates are fixed and lower than rates of Stafford loans.
Parents may supplement aid with federal Parent PLUS loans. Amounts are not limited as long as they do not exceed the cost of attendance minus other aid. Interest is fixed, and repayment starts 60 days after award. Loan repayment is the responsibility of the parent.
Federal Pell grants are awarded to undergraduate students with financial need. The Federal Supplemental Educational Opportunity Grant (FSEOG) is for undergraduates with extreme financial need. The FSEOG is awarded by the school, but not all schools participate in the program.
The federal work-study program provides part-time employment to graduate and undergraduate students with financial need. The program is administered by participating schools.
There are many non-federal grants and scholarships awarded on a wide range of criteria. Some focus on academic excellence. Others are for excellence in a particular subject or sports. Some award students who have made contributions to their communities through social service or humanitarian efforts. Others are for individuals with particular traits or cultural backgrounds. With a little attention and perseverance, you can get offers for college financial aid from several institutions and select the package that best suits your situation.