Financial aid 101: What is financial aid & how does it work?
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!
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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, check this post out!
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:
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 has been extended to June 30, 2020.
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!
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.
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.
When you are finished school and have received your diploma, degree, or certificate, you will begin repaying your loans, which you can learn more about here. If you have taken out a federal student loan, you may be eligible for student loan forgiveness, which you can read about here. 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?
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