Back in the old days, it wasn’t uncommon for someone to pay off their college tuition while working a summer job. Something like that today would be unheard of. In fact, even though people know that the price of tuition continues to rise, many families experience sticker shock when they see just how much it costs to send a student to college.
Thankfully, there are many education funding options out there to help families pay for higher education. In fact, savings and income represent only a fraction of the resources that are available to families looking to pay for tuition. Grants, scholarships, and loans are also available to many families.
With all of these options, it is easy to get overwhelmed. Luckily for you, we’re here to help you sort it all out. So keep on reading and we will take you through everything that you will want to know!
What Is Financial Aid?
College financial aid can provide a lot of help to students and their families. Financial aid covers various college expenses.
These expenses can include transportation, books and other class supplies, room and board, and fees and tuition.
There are several kinds of financial aid out there. There are work-study programs, private and federal loans, scholarships, and grants.
How Does Financial Aid Work?
Depending on where the money is coming from, you are eligible for different forms of financial aid. For example, you might be able to receive funding from a private company, a foundation, a high school, college, and state and federal agencies.
The amount of money that your student gets will depend on institutional, state, and federal guidelines.
It is important to remember that the way federal financial works is that the student first needs to answer a series of questions. These questions will assess how much the student can afford college tuition before receiving any financial assistance.
The aid will then be granted based on the application. The student will then be given the chance to either reject or accept the aid that is offered.
The kind of aid that’s offered will determine if it needs to be repaid.
A student sometimes needs to fill out additional applications in order to receive private aid or scholarships.
How Do I Apply for Financial Aid?
The first thing that you need to do is file the FAFSA, which is short for Free Application for Federal Student Aid. This application is used by a variety of schools and state agencies to determine college aid.
The FAFSA can be found through the US Department of Education’s website. You can start to fill out the form as soon as the first of October for the coming school year. The deadline for the FAFSA is the last day of June for students who are going to college in the fall.
However, that deadline is only for federal financial aid. A lot of colleges and schools that use FAFSA to provide aid tend to have even earlier deadlines.
Some colleges, – most of them private – utilize a supplemental form known as the College Scholarship Service Profile. This is sometimes referred to as the CSS Profile. This is a profile that is used to figure out how to give out their own funds.
The form is more detailed than the FAFSA. That also means that it could take more time to fill out.
The initial submission fee for the CSS profile is twenty-five dollars. You need to pay sixteen dollars for each additional report. However, it is worth mentioning that fee waivers can be made available.
For example, undergraduate students with a family income of no more than $100,000 can file the form for free.
You can go to the website for the College Board and find a list of colleges that require the CSS profile. The College Board is the group that maintains and administers the application.
It is important to keep in mind that the CSS profile is going to go a lot deeper in the finances of your family compared to the FAFSA. The CSS Profile, for example, takes assets that are excluded on the FAFSA into account.
The profile also considers the value of things like a grandparent-funded 529 college savings plan, small business, and the family’s house.
What Are Different Kinds of Financial Aid?
There are two kinds of financial aid. There is merit-based financial aid and need-based financial aid.
For example, federal need-based financial aid is determined by a family’s demonstrated ability to afford college tuition as calculated by the FAFSA.
On the other hand, merit-based aid can be given by a private organization, college, or institution. The money is given to a student for a specific academic or athletic ability or a certain talent. These are financial awards that are not based on financial need.
College students can be eligible for institutional, state, and federal aid. Institutional aid is financial help provided by the college. It varies based on the college.
Each school uses its own metrics and rules to figure out how to award its financial aid.
Many students qualify for some kind of federal student aid. When it comes to federal financial aid, there are three kinds of funds – work-study, grants, and loans.
Federal Student Loans
Federal student loans are fixed-rate loans that come from the federal government. The interest rate for every academic year is set on the first of July. That rate is then going to be fixed for the life of the loan.
The main program related to federal student loans is the direct loan program. Under this program, undergrad students who are dependents can borrow direct unsubsidized or subsidized loans up to $31,000. If an undergrad student is classified as an independent then they can borrow up to $57,000.
This is financial aid from the federal government that does not need to be paid back. The Pell Grant is a popular example of this kind of college grant.
Your eligibility for this kind of grant is going to be based on a family’s EFC, or expected family contribution. This number is calculated on the FAFSA.
A lot of people who receive Pell Grants tend to have an adjusted family income of no more than forty thousand dollars. The most that you can receive for a Pell Grant is $6,500.
A family that has an EFC of zero, can qualify for the full Pell Grant, for example.
This is a program that offers part-time work. The work is usually on the college campus and helps students cover expenses related to college.
Not every student is going to qualify for a federal work-study program. Students have to qualify through the FAFSA and they need to demonstrate financial need.
With work-study programs, a student can earn at least the federal minimum wage, which is currently $7.25 per hour.
When it comes to state aid, you usually need to be a resident of the state to receive financial aid from it. You also will likely need to attend a college inside that state in order to receive grants.
The FAFSA should be on the radar of any student who qualifies for need-based aid. This is true for both state and federal funds.
However, a student who is heading off to college can also go a step further and maximize merit-based aid too.
This is because merit aid can help you close the gap between need-based financial aid and the cost of going to college. With that said, not all schools award merit aid.
Some colleges save merit aid only for special circumstances. And there are some schools that don’t award merit aid at all.
Aside from institutional, state, and federal assistance, there are some other aid programs that you might want to consider. These are usually programs that cater to specific groups of students.
For example, you might want to consider the Reserve Officers’ Training Corps program, known as ROTC, or the Peace Corps volunteer benefits.
Students who take part in ROTC and train and learn at the same time. And some students will get a scholarship that covers things like room and board, books and fees, or tuition.
There are also military benefits. Active duty service members, veterans, and their dependents can use these benefits to pay for school. Things like the GI Bill can help to cover some or all of the costs of college.
You can also view more here to learn about scholarships for minorities.
It’s a good idea for high school students to reach out to their school counselors. They should talk about other kinds of scholarship options and groups, such as ones from private foundations.
Institutions provide their own endowed scholarship. They do this through their foundation. However, students can also find resources other than the institution.
When you look into foundation scholarships, a lot of them are going to be considered automatically with the application of admission. However, you might need to request unique applications for others.
What Should I Know About Financial Aid Deadlines?
When it comes to applying for financial aid, you need to pay special attention to deadlines. It is very important that you meet all of the college financial aid deadlines. And these deadlines can vary from college to college.
Some schools also distribute aid on a first-come, first-serve basis. So the sooner you can get your applications in, the better.
While you can apply for financial aid throughout the year, funding for some financial aid programs might be depleted. You might meet the qualifications for some kinds of aid but not be offered that aid because there is no funding left.
Some colleges set their deadlines in December and others might put theirs in March. This is why you need to organize deadlines and know which ones to apply to first.
You should know the deadline for each college that you apply to. If you miss the deadline even by one day, you could end up losing out on thousands of dollars in free aid. You then might need to take out a loan.
Deadlines are very important and change from place to place.
And it is not just institutional deadlines that students and parents need to stay on top of. There are some states that have early deadlines for state grant eligibility.
Also, some schools might not be able to provide as generous a financial aid offer if the application is considered late. Getting organized when it comes to application requirements and deadlines is a must for anyone who wants to receive as much as possible.
How Do Schools Award Aid?
Each school has its own way of processing applications and giving out aid. Some schools provide larger financial aid packages than other schools. This is just like how some schools charge more for tuition than others.
A good amount of colleges package financial aid awards with no loans regardless of what the family’s household income is.
The Importance of Using This Ultimate Guide to Finding College Education Funding Options
Hopefully, after reading the above article, you now understand the importance of using this ultimate guide to finding education funding options. As we can see, financial aid can be extremely beneficial to practically anyone who is applying to college.
By knowing about financial aid and student loans, you should have a better time knowing what your options are when it comes to paying for your child’s education.
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