Planning for paying for college can be a bit overwhelming. From finding the right college, to deciding on a major and most important, figuring out how to pay for it all is a daunting challenge. So, where do you start? First of all, every student who plans to attend college should complete the Free Application for Federal Student Aid (FAFSA). This form must be completed each year, as it determines your eligibility for federal financial aid, many state aid programs and institutional need-based aid. Once processed your FAFSA reports a number known as the Expected Family Contribution (EFC) and based on this number, you may be offered financial aid in the form of grants, scholarships, loans and work-study programs. Keep in mind, that not all financial aid is ‘free money.’ It’s important to understand how each type of aid works and what expenses it may cover.
Grants are free money that may be offered by the federal government (Pell Grant, SEOG, TEACH Grant), state agencies (TAP, CAL Grant) or colleges/universities. Students are identified as possible grant recipients based on financial information obtained from their FAFSA. Some grants may also consider academic achievement when determining eligibility. Typically, grants may be used to cover tuition, room & board, books and fees. In most cases, the amount of the grant cannot exceed the cost of attendance.
One of the most flexible and readily available sources of financial aid is scholarships. Scholarships are also considered ‘free money’ and do not have to be paid back. Unlike grants, which are typically need-based, scholarships may be awarded for a variety of reasons. Students may apply for and receive an award based on merit (grades and/or test scores), need (low-income), athletics, choice of college major, service (volunteer work), membership (military, clubs, and honor societies) and more! Scholarship providers may disburse the money directly to the student or send a check to the college the student attends. Typically, scholarships help cover the cost of tuition, books and fees, though some are unrestricted and can be used for any education-related expense. However, if the amount of funds exceeds the school’s cost of attendance (tuition, room, board, books, and fees), the school may have to reduce other aid. If this happens to you, you will receive a revised award letter from your school and you should contact the school’s financial aid office for an explanation of how your scholarship affected your other financial–especially if your scholarship reduced school-provided grant assistance. Otherwise, scholarship funds received up to the cost of attendance but in excess of your student bill will be refunded to the student. One of the easiest ways to locate available scholarships is to use a free online search service, such as ScholarshipExperts.
Depending upon the student’s need (as determined by the FAFSA), he/she may be offered the opportunity to earn money for college through a work-study program. Colleges will place students in jobs on campus or at non-profit organizations/public agencies off campus where they will be paid an hourly wage. Students usually work 10-15 hours a week. The money earned by the student helps cover his/her educational and living expenses.
Work-study will either come from the federal government through Federal Work Study or in some cases from the college itself (the college will have a name for their program such as College Work Study). It’s important to remember that although work-study is an offset against your cost of attendance, the award must be earned and will not be applied directly to your student bill.
A student who is unable to meet all of his/her educational expenses through the use of grants, scholarships and work-study programs may also be offered the opportunity to take out a federal student loan. The amount the student receives will depend on his/her financial need, the funding level at the school and when he/she applied. Students with financial need (based on FAFSA) may be offered either a subsidized or unsubsidized Stafford loan or a Federal Perkins loan. If a student still requires additional funding to meet college costs, a number of banks and other lenders offer private student loans. Private student loans are based on credit and most student borrowers will need a creditworthy co-signer in order to obtain this type of financing. Use our loan comparison tool found on the right of this page to compare private student loans and apply onlne. Parents and Parent PLUS loan or Grad PLUS loan. PLUS is also based on credit, but the criteria required to be approved are far less stringent than other consumer financial products such as a mortgage. We have an entire section of our website dedicate to each type of student loan that provides information in detail for each program.
With the variety of financial aid options available to students, it’s easier than ever to find a way to make your educational dreams a reality. Just start with the FAFSA, search for scholarships and find the student loan options that are best for you.