Every year the cost to attend college increases more and more. You might wonder to yourself… “How will I pay for all of this?”
This is where financial aid comes into play.
But How Does it Work?
Every year you must apply for financial aid via the Free Application for Federal Student Aid, most commonly known as the FAFSA. This online application qualifies you for aid depending upon you and your family’s income and assets.
This information is also passed onto the schools you applied to, currently attend, or wish to transfer to. Make sure to check your school’s requirements as they may have other forms you need to submit.
Pay attention to deadlines and submit all paperwork as early as possible.
Based on your and your family’s income and assets, your Expected Family Contribution (EFC) is calculated. This number is the estimated amount of how much you can afford to pay for college.
Financial aid officers use this number minus the cost of attendance to determine your financial need.
The cost of attendance includes tuition, fees, room and board, a personal expense estimate, books and supplies, and a travel estimate.
Cost of attendance − Expected Family Contribution = Need
The financial aid package ultimately offered to you should meet your need. Packages can consist of three types of aid:
- Grants and scholarships
- Work study
A Look at Different Types of Aid
A grant is often based on financial need and does not need to be paid back. An example of this would be the federal Pell Grant. Scholarships also do not need to be paid back but are generally awarded for academic or other achievements.
Student work study programs are part-time jobs for students with financial need. The money you earn through work-study can be used to pay for education expenses.
When other options are exhausted there are loans.
Federal loans are offered to students or parents.
Student loans are either subsidized or unsubsidized by the federal government. This means that with a subsidized loan, you would not be responsible for the interest accrued while in school, during the loan’s grace period, or deferment. On unsubsidized loans, the borrower is responsible for the interest regardless of the loan’s status.
Parent PLUS loans are available to parents of dependent undergraduate students and are the parent’s responsibility to repay.
Additional Sources of Aid
In case you need additional funds or would prefer to avoid loans there are other resources.
Your state may offer financial aid. Contact your state’s department of education for more information.
Many colleges also offer financial aid from their own funds.
There are tons of scholarships or grants available offered by non-profits and other kinds of organizations. Take advantage of the opportunity for free money towards your education.
1. Financial aid is used as a way to pay for college.
2. Every year you must apply for federal financial aid via the FASFA.
3. With the information you providee, the financial aid office at your school will offer you a package that may contain grants, scholarships, work-study, and loans.
4. Look for and apply for other types of aid.
Your education is an investment and financial aid helps to lessen the financial burden needed to invest in your future.