Paying your way through college, especially with the staggering prices of tuition fees can be overwhelming, if not discouraging, for some. Luckily, there are more affordable, cost-efficient ways that are available, such as financial aid and scholarships.
In a typical American family, their primary source of funding for college tuition fees is grants and scholarships. Usually, grants and scholarships are the two types of financial aid that do not need to be reimbursed in the future.
However, steering through the entire financial aid process can be tricky. This guide will walk you through with the basics so that you can pay off college through financial aids and scholarships, and helping you achieve your goals.
What is Financial Aid?
Financial aids help you and your family pay off your college expenses such as tuition fees, books, school supplies, lodging, and transportation. These are usually in the form of scholarships, grants, work-study programs, and private and federal loans.
These types of aids usually come in a variety of sources ‒ foundations, colleges, high schools, federal and state agencies, to name a few. The total amount a student receives depends on a variety of factors, such as institutional, state and federal guidelines.
How Do I Apply for Financial Aid?
First and foremost, file the FASFA, or also known as the Free Application for Federal Student Aid ‒ the application for applying for federal student aid. You can check the Department of Education’s website, where you can fill out the free application form, as well as keep track with the latest announcements. Usually, students and families can begin filling out forms as early as October 1 for the subsequent academic year. The deadline for the federal financial aid is generally on June 30, but other schools and universities that utilize FASFA have earlier deadlines.
Some schools such as private colleges require an additional form, the College Scholarship Service Profile, for them to know their financial aid funds. The fee for a CSS Profile as of the school year 2018 to 2019 is $25. Any additional report cost for about $16.
According to certified financial planner Joseph Orsolini, there are only about 250 colleges that need the CSS Profile (elite colleges.) These schools, according to Orsolini, will dig deeper into your family’s overall finances. It takes into consideration assets and properties that are otherwise, excluded from the FAFSA. For example, it counts the total value of your family home and other small businesses.
Sources of Financial Aid
Students can also be eligible for a state, institutional, federal and private aid. These four main sources usually come from the state and federal government, institutions, and other private organizations.
1. Federal Aid
One of the biggest financial aid providers, the federal government offers grants, loans, and work-study funds. Students who are interested in filing this type of aid must submit the Free Application for Federal Student Aid (FAFSA).
2. State Aid
Just like the federal government, the state also offers students loans, grants, scholarships, tuition assistance, and work-study funds.
3. Private Aid
A private aid comes from private sources such as religious, cultural, professional and service organizations. These are usually in the form of loans and scholarships.
4. Institutional Aid
This type of aid usually comes from a form of financial assistance, one that is offered by the school. It often varies, since different colleges and universities have different procedures when it comes to establishing their financial aid.
Types of Financial Aid
There are four main financial aid types for students- scholarships, loans, grants, and work-study funds.
Scholarships usually do not require repayment. Some institutions and private organizations offer them and can be based on a variety of factors such as athletic ability, academic performance, race, religious affiliations, to name a few.
Grants, like scholarships, do not to be repaid later on. These are usually offered by the state and federal government, as well as some institutions. They are either need-based, merit-based or student-specific. Student-specific grants are traditionally given to students with disabilities, women and other minorities.
Both the government and private institutions usually offer loans. Loans are the money that you borrow to put you through college. However, you need to repay these loans in a given term with added interest rates.
Loans allow students and their respective families to gain access to funds that will help put a student through college.
- Subsidized Loans – Loans that are granted for students that demonstrate financial need. While a student is in school, the Department of Education pays off the interest, with a six-month grace period after graduation.
- Unsubsidized Loans – Loans that are made available to students regardless of their financial need. They are usually the ones responsible for paying interest rates.
Private loans are loans that are usually granted by private banks. The eligibility for applying for this type of loan largely depends on one’s credit score. Take note that private loans typically have higher interest rates than government loans.
4. Work Study
A work-study program is where a student earns money to help pay off school. This type of program usually gives students federally funded jobs found on campus or designated locations. Some facilities on campus employ work-study students, and the pay usually varies.
With the rising costs of college education, getting financial aid can make can make a significant difference in the debt that you need to pay off after graduation. That’s why, at this stage, you need to be resourceful as much as you can. Explore all the possible options to fund your college tuition fees and other expenses. If you do that, there is a greater chance that you can maximize the financial aid that you’ll receive.
Now that you are aware of the different financial aid that is available to support you in your studies, the next step is to check for available financial aid opportunities out there, allowing you to utilize all the available resources to support and fund your college education.