Financial Aid for College-Bound Students
Oftentimes, the hefty price tag of higher education deters people from even thinking about attending a college or university. However, don’t let that overwhelm or discourage you! While the cost of tuition continues to go up each year, the number of available financial aid options are also increasing.
DID YOU KNOW? The 2019 Sallie Mae/Ipsos survey, How America Pays for College indicates that scholarships and grants covered 31% of college costs in 2018-2019 for a typical family. Another 24% of costs were covered by loans.
That being said, being strategic with financial aid can make higher education much more affordable for many!
What is Financial Aid & How Does It Work?
With the diverse forms of financial aid options available, it can be a daunting process navigating through them all. We are here to help break it down so you can be on your way to making college more affordable!
Financial aid helps students and their families to cover higher education expenses like tuition and fees, room and board, transportation, and books and supplies, to name a few. Key types of financial aid include:
- Federal or private loans
As you search for a variety of financial aid types, you may be wondering what the difference between grants and loans are. In short, grants generally do not have to be repaid after graduation, while loans do. Scholarships are similar to grants in that they are essentially awarded to the student to pursue higher education without the worry of needing to repay.
Federal student loans are fixed-interest-rate loans from the government. This means that the interest rate for each academic year is set on July 1, and will not change during the life of the loan. The main program for student loans is the direct loan program, where undergraduate students can borrow direct subsidized or unsubsidized loans up to $31,000 in total if they are considered a dependent. An independent undergraduate student can borrow up to $57,500 in total.
Finally, work-study programs are arrangements with your college or university where you can put in hours of work (usually on campus). What you’d normally get paid would essentially go towards paying for your education. Keep in mind that not everyone is eligible for work-study; students must qualify through the FAFSA with demonstrated financial need.
Funding your College Education
If you do a bit of digging online, you will discover the plethora of local and federal options available. College-bound students can consider various scholarships, grants, loans, and work-study programs to help pay for college. The amount of financial aid a student receives depends on federal, institutional, and state guidelines. You will very likely need to stack up a few of these to make college more affordable, so don’t be afraid to explore all of your options:
- Local – The organizations in your immediate city or county may be offering college-bound students great resources. A big advantage of looking into local aid opportunities is that they have far less competition than national awards. This means you have a higher chance of getting something!
- Federal Need-Based – You’d be surprised at how much financial aid the government provides college-bound students each year! Don’t miss out – fill out the Free Application for Federal Student Aid (FAFSA) to get started. In contrast to merit-based financial aid, federal need-based aid is determined by a family’s demonstrated ability to pay for college. This is calculated by the FAFSA. The most well-known college grant is the Pell Grant. Families who earn a household income of less than $50,000 typically qualify for some amount of Pell.
- Corporate – Bigger businesses like Target and Coca-Cola may also offer thousands of worthwhile financial aid options for college-bound students. You can begin by searching your favorite businesses on the Internet to see if they are currently offering anything. It would also be a smart idea to ask family members’ companies too, as organizations will award the children of employees with scholarships or grants for college.
- Merit-Based – Some scholarships are awarded based on students’ academic or athletic abilities, as well as their ethnicity, interests, career plans, or talents. It’s time to use your special traits to your advantage!
Applying for Financial Aid
After finding a few promising financial aid options, it’s time to go through them one by one and apply for them. Often, students will have to answer a series of questions used to determine their ability to pay for college, and their eligibility for financial aid. After applying, students will be awarded if they meet eligibility requirements and have the choice to either accept or reject the aid offered.
The first formal step to applying for financial aid is to file the FAFSA. This application is used by many colleges, universities, and state agencies to determine college aid. It’s available for free through the Department of Education’s website, and families can start filling out the form as early as October 1 for the following academic year. The deadline to be considered for federal financial aid is on June 30; however, many institutions that rely on the FAFSA to determine aid may set earlier deadlines. That being said, it’s best to not wait until the last minute to get this filed.
Some elite colleges may use a supplemental form called the College Scholarship Service Profile to determine how to allocate their own financial aid funds. It’s more detailed than the FAFSA and may take longer to complete. In addition to the main aspects covered on the FAFSA, the CSS Profile also takes into account assets like the value of a family’s home. One thing to note about the CSS Profile is that it does have an initial submission fee of $25. Each additional report is $16. If you are not sure whether your school requires the CSS Profile, you can check the College Board website as they administer the application.
Review: Paying Your Way Through College
While the sticker price of a college education may be intimidating, it should not be a reason for someone to not pursue it. Bear in mind that income and savings only represent some of the resources that families use to pay student expenses. Financial aid steps in to help a lot of students afford higher education each year. With so many options to choose from, there is bound to be at least a handful for students to apply for. Grants, federal loans, work-study programs, and merit-based scholarships are all worth considering when shopping around for financial aid.