Financial Aid 101

Asher Wu
Mar 17, 2021

Post-secondary education can offer students career opportunities while simultaneously increasing their potential for higher incomes and greater job satisfaction, but this can be costly. As a result, many Americans struggle to cover the cost of attending college on their own. They need help.

 

When you are ready to jump into the college experience, you should create a plan to cover the expenses of that higher-level education. This will include program fees, tuition, books, rent, supplies, and commuting. So, what can you do to make your life easier? Look into financial aid options!

 

What is financial aid?

Financial aid assists students and their families when it comes to paying for college. Financial aid can help cover the costs of tuition and fees, dorm rooms, books, supplies, and transit in the form of grants or loans. Additionally, there are various types of financial aid for whatever you need: grants, scholarships, work-study, and federal or private loans. Basically, financial aid is money for college. A ton of sources offer different types of aid to students including colleges, high schools, private organizations, federal and state agencies, and more (studentaid). The amount of aid a student receives is completely based on each source’s guidelines. For more information on how federal student aid is calculated

What is the FAFSA?

The FAFSA, or the Free Application for Federal Student Aid is a form that is used to assess financial need to attend an academic institution.  This form is required to be completed every year you plan on attending college in order to receive any financial aid. Awards come in the shape of grants, scholarships, work-study hours, and federal student loans. The FAFSA should take priority in the decision-making process and is intended to be used to make funding your education easier. It's vital to understand the FAFSA and to know what aid you are eligible for. The form itself takes approximately 30 minutes to fill out on average. Be prepared to have financial documents readily available when completing the application.

Complete the FAFSA 

Eligibility requirements

How does financial aid work?

Once you understand the basics of applying for financial aid, it seems rather straightforward. To take advantage of financial aid, you should follow these steps:

Research

Cost of attendance can differ depending on the school and program, so explore your options (Princeton Review). What school are you considering? What programs? Where is it located? This will help you in your search for financial aid, especially when you’re looking into scholarships. It’s incredibly common to research the school and financial aid options at the same time to gain a better idea of the institution you are able to afford. 

How much aid will you need?

Now that you know which school and program you would like to enroll in, calculate the cost. Add up all of the expected expenses mentioned above (i.e. tuition, program fees, room, books, supplies, and commuting costs). Then evaluate your own savings and income. How much of that can you cover? This offers an idea of how much financial aid you will require. Sidenote: Even though a school may initially appear more expensive, it may a lot you opportunities to financial aid that could offset that heavy cost. This could make that college more comparable to a school with a lower tuition fee. 


What’s your potential eligibility?

Every source of financial aid comes with its own set of qualifications for eligibility. Therefore, it’s prudent to research your options to be certain that you have a good chance for success. Most sources will provide a clear page with specifications such as the FAFSA whereas others may take some more digging. The deadline for applying for the FAFSA is June 30, 2021. Depending on what you apply for, these may be some requirements among many others:

  • Must be a U.S. citizen
  • Must be enrolled at a certain degree/certificate program at your school
  • Have a determined level of financial need
  • Have a minimum GPA
  • Obtained an artistic or athletic achievement
  • Be in possession of a high school diploma or equivalent


There’s nothing wrong with applying for financial aid even if you think you may not qualify. There have been many situations in which grants and scholarships were not claimed due to misunderstanding the criteria requirements. Don’t let that stop you! It can also be beneficial to have your parents help you fill out the FAFSA or provide any additional support it helping you get the most aid possible.  


Accept the school and program

Many financial aid sources are applied once you accept a school’s program. This is because you need to know precisely how much attendance will cost. 


Fill out applications

Financial aid can be obtained through public and private means. When it comes to public financial aid, this usually begins with the completion of the Free Application for Federal Student Aid (FAFSA). The application is available for free on the U.S. Department of Education’s website. When it comes to scholarships and private organizations, separate applications are needed and you must follow each one’s instructions with a careful eye.

 

Receive financial aid award letter

You will receive your financial aid award letter in late March or early April. You always have the option to check your financial aid status on the official FAFSA website. If you received less financial aid than you anticipated, you can contact your school's financial aid office and write a petition for more financial aid. 


Attend school

When you’re enrolled and have been approved for financial aid, the funds may be paid directly to you or applied to your schooling costs automatically. Sometimes it’s a combination of the two. However, financial aid grants or loans may be doled out during the school year while scholarships may be awarded in one large sum.  It's also possible for you to receive a financial aid refund if the cost of attendance is lower than your financial aid package. This is known as a financial aid refund. When you are finished school and have received your diploma, degree, or certificate, you will begin repaying your loans. If you have taken out a federal student loan, you may be eligible for student loan forgiveness. If you’re seeking more details and step-by-step instructions on financial aid and how does it work, visit The Scholarship System. Keep in mind that the earlier you apply for financial aid, your chances of receiving what you qualify for will grow significantly higher. What are you waiting for?

Common types of financial aid

Grants

 

A grant is financial aid that doesn't have to be repaid unless you withdraw from a school or don't complete your service obligation if applicable.

A variety of federal grants are available.  

Scholarships 

A scholarship is free money for college that doesn't need to be repaid. These are sometimes based on academic merit, talent, or a particular field of study. 

There are a lot of places to find scholarships, and ways to increase your likelihood of winning.

Work Study

The Federal Work-Study Program allows you to earn money to pay for school by working part-time. 

There are lots of opportunities on campus to get a part-time job. You can choose whether this money is dispersed directly to the principal of the loan or to you in directly the form of a paycheck 

Loans

student loan is money you borrow to pay for your college tuition. You must repay the loan and interest that accrues over the life of the loan.

You should always understand your repayment options to pay a loan off as quickly as possible to avoid extra money paid in interest.

The application process

October 1st, 2019

The FAFSA application opens for the 2020-21 academic year. To get the most out of financial aid, submit your application soon after this date.

Note your colleges' financial aid deadlines

Each institution has its own specific deadlines. Research each school you're applying to and write it down. Use our application planner bundle to help

Submit any other financial aid applications

Lots of schools have alternative financial aid application requirements, like the CSS Profile. Check-in with the schools you apply to and ensure you cover all your bases before the deadline to receive state or institutional aid.

Wait for your financial aid award letter

How much free aid you qualify for will be outlined in this letter. As well as the amount of federal loans you can borrow and any work-study opportunities. This can be appealed if you don't think it's a fair amount.

June 30, 2021

The federal deadline is the last chance you have to submit the FAFSA. Work-study hours and state and institutional aid runs out the fastest so try not to wait until this day to submit.

How to complete the FAFSA

1. Create your FSA ID

You can't complete the FAFSA without your FSA (Federal Student Aid ID). This username and password combination gives you access to the form as well as any information regarding financial aid for years to come. This will come in handy when you are filing your taxes down the road.

If you are a dependent student your parent/guardian will need their own FSA ID.

To create your FSA ID, follow the instructions on the official StudentAid.gov site to get started.

2. Gather all the documents you'll need

To keep the process as quick and painless as possible, gather all the necessary documents beforehand. You'll save yourself a lot of time having these handy and avoid looking for them as you're filling out the form.

Here are the most common documents you'll need for the 2020-2021 school year if you're a U.S. citizen and dependent student:

  • Your Social Security card.
  • Your driver's license (if you have one).
  • Your 2018 W-2 forms.
  • Your 2018 federal income tax return.
  • Your 2018 untaxed income records.
  • Your current bank statements.
  • Your parents' federal income tax return.
  • Your parents' 2018 W-2 forms.
  • Your parents' bank statements.
  • Your parents' untaxed income records.
  • Your parents' current business and investment records.

3. Fill out the FAFSA and ask for help if you need it

It's okay to need help when filling out the FAFSA form. Use these tools if you hit any speed bumps:

  • Every FAFSA question has a blue and white question mark beside it. Selecting this will provide Moore context on how to answer the question being asked.

  • Utilize the "FAFSA Help" page, which is a comprehensive list of FAQs, a lot more information, and a contact to help guide you to completion.

  • You can utilize the "Contact Us" information to email any questions you have during regular business hours or chatting live (in English or Spanish) with technical support.

  • Your college's financial aid office is also a great resource, contact them directly for help on completing the FAFSA.

4. Use the IRS data retrieval toool

Don't do more work than you have to. Utilize the IRS Data Retrieval Tool by transferring your 2017 federal tax return information directly into your FAFSA account.
You'll find this option when you reach the financial information section of the FAFSA, click “Link to IRS” to prefill the form with the information.

5. List the colleges you plan on applying to

The FAFSA will capture up to 10 schools you plan on applying to using school codes. Don't worry about memorizing these codes, you can search them right in the online application itself. 

If you're filling out the paper FAFSA, you can find the school codes on the StudentAid.gov site.

Not sure where you're applying before the October 1st deadline? Just list the schools that are possibilities and submit the FAFSA as soon as possible. You're better off not wasting any time. If you do change your mind you can update your FAFSA. All the schools you list will receive the information you fill in on the FAFSA for their financial aid use so the quicker the better


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