October 30, 2020

How to Get the Financial Aid You Need to Afford College

College isn’t cheap.

According to EducationData.org, the average yearly cost of attending a 4-year institution for the 2019-2020 academic year was $21,950 (for in-state students). While that number can vary widely based on the state and specific university you choose, it’s still more money than most people can afford on their own.

Luckily, there are a variety of financial aid programs to help you pay for college. Whether it’s federal grants and loans or college-sponsored scholarships, there are many opportunities to make college more affordable.

However, the process of applying for financial aid can be confusing. Even if you’re lucky enough to have a college counselor to guide you, the deadlines, essays, and paperwork are still a lot to handle.

To help you navigate the financial aid process, we’ve put together this guide. Learn about all the types of financial aid available, how to conquer the FAFSA, and get answers to common financial aid questions.

What Is Financial Aid? (The 5 Main Types)

Financial aid is a broad term. It refers to any money you receive to help cover the cost of college. In general, there are five main types of financial aid to consider as you apply for college:

  • Scholarships
  • Grants
  • Loans
  • Federal Work-Study
  • Military-Related Aid

Let’s take a look at each of these in detail, starting with scholarships:

Scholarships

Scholarships are the best-known type of financial aid, and for good reason. There are thousands of scholarships available from private entities, non-profits, and universities.

Some are based on talents and achievements, such as high grades, test scores, or athletic ability (to name just a few). Others are based on your background, major, or even religion. And many are awarded based on a combination of factors (athletic scholarships, for instance, often come with certain GPA requirements).

Because there are so many types of scholarships available, we encourage you to spend as much time as you can applying for them. It’s free money!

To learn more about the types of scholarships available, as well as how to get them, check out our guide to getting the scholarships you need to avoid debt.

Grants

Up next, we have grants. Grants are similar to scholarships in that you don’t have to repay them.

The main difference is that grants tend to be based on financial need, not personal achievement. Pell Grants and Federal Supplemental Educational Opportunity Grants (FSEOG), for instance, are based on your ability to pay for college.

Additionally, some grants require you to take certain classes and pursue a certain career path post-graduation.

A federal TEACH Grant, for instance, can help you pay to become a teacher. Provided, of course, you participate in a qualifying program and agree to teach in a low-income area upon graduation.

Generally, all you have to do to be eligible for grants is fill out the FAFSA (more on that later).

However, don’t forget that states and private organizations also offer grants in some cases. You’ll need to do your own research to find these, as the full range is too broad to list here. But don’t rule them out; it’s still free money.

Loans

I’m sure you’ve heard of student loans; they’re a constant fixture in the news, and around 45 million Americans have them.

When we discuss student loans in the context of financial aid, we’re usually referring to federal student loans such as Direct Subsidized or Direct Unsubsidized loans.

The main difference is that Direct Subsidized loans don’t accrue interest while you’re in college, while Direct Unsubsidized loans do.

You can only use Direct Subsidized loans to pay for undergraduate education, while you can use Direct Unsubsidized loans to pay for undergraduate, graduate, and professional education.

Finally, you must demonstrate financial need to be eligible for Subsidized loans, while anyone can apply for Unsubsidized loans.

There’s also a lesser-known federal loan program called Direct PLUS loans. You can get one of these if you’re a graduate or professional student OR a parent of a dependent undergraduate student. Besides these differences, they work much the same way as other federal student loans.

Beyond federal loans, there are also private student loans. Banks and other financial institutions offer these loans to cover college costs that federal loans and other types of financial aid cannot.

We strongly discourage you from taking out any student loans if you can avoid it, but especially private loans. They tend to have higher interest rates, and they come with fewer protections than federal loans.

Need help paying off your student loans? Read this next.

Federal Work-Study

Getting loans, scholarships, and grants is great, but there’s also the old-fashioned way of paying for college: working.

Even if it doesn’t cover all of your college costs, having a job while in college is a great way to get experience outside the classroom and make extra money to help with your expenses.

While anyone can get a job while in college, Federal Work-Study is a program to help students with financial need find jobs.

If you’re eligible for the program, your college will receive money to pay the wages of your on-campus job. Because of this, colleges tend to give work-study students priority when applying for campus jobs. (It’s also possible to get a work-study job off-campus, but it’s much less common).

A popular misconception about the program is that you have to use the money you earn to pay for college costs. While this is a good idea, there are no rules about how you use the money you earn through work-study. You can use it for whatever you want.

To learn more about work-study, check out this guide.

Military-Related Aid

If you or a family member served in the military, you may be eligible for special scholarships, grants, and other education benefits.

Here are the main types of military-related aid to investigate:

ROTC Scholarships

The Army, Air Force, and Navy offer Reserve Officer Training Corps (ROTC) scholarships at a variety of colleges and universities.

The requirements vary based on the branch of the military, but essentially the military helps pay for your college in exchange for completing military service upon graduation.

To learn more about the ROTC scholarships available, visit one of the following websites:

VA Education Benefits

If you served in the military, then the VA may be able to help you pay for college or job training.

There are a variety of educational assistance programs available through the VA, including the Post-9/11 GI Bill, the Montgomery GI Bill Active Duty, and the Montgomery GI Bill Selected Reserve. The VA also offers education benefits to dependent or surviving children and spouses of veterans.

To learn more about all the education benefits available through the VA, visit this page.

Iraq and Afghanistan Service Grants

The final type of military financial aid to discuss is the Iraq and Afghanistan Service Grant program.

If your parent or guardian died as a result of military service in Iraq or Afghanistan, then you may be eligible to receive a special grant to help you pay for college. You can learn more about the program here.

How to Apply for Financial Aid

Now that you understand the general types of financial aid, it’s time to start the application process.

Depending on the type of financial aid you’re trying to receive, the steps of this process will vary. If you’re trying to get scholarships, for instance, you may need to write essays, complete interviews, or attend tryouts.

But regardless of the financial aid you seek, it all starts with filling out the Free Application for Federal Student Aid (FAFSA). This is the document that determines your eligibility for federal, state, and college student aid.

Filling it out is free and shouldn’t take long (according to the FAFSA site, it takes an average of 55 minutes).

The small amount of time and paperwork is trivial in comparison to the financial benefits you could receive. So don’t skip filling it out because you “don’t have time” or “don’t think you’ll qualify.” It can only help you.

But how do you fill out the FAFSA, exactly? Here’s an overview:

1. Create an FSA ID

Before you go any further, take a couple of minutes to create an FSA ID. This is a username and password that you can use to sign your FAFSA electronically, as well as expedite the process of filling out the FAFSA overall.

To create an FSA ID, visit this page. You’ll need your legal name, Social Security Number, and date of birth.

If you’re a dependent student, one of your parents will also need to create an FSA ID (whichever parent is reporting your family’s info on the FAFSA, it doesn’t matter).

Note that your parent needs to create their own account; they can’t share yours, as each FSA ID acts as a legal signature.

2. Gather the Required Information

The actual process of filling out the FAFSA doesn’t take long. The most time-consuming part is gathering all the necessary information.

For this reason, take some time to collect the following info before you fill out the FAFSA:

  • Your Social Security Number
  • Your parents’ Social Security Numbers (if you’re filing as a dependent)
  • Your driver’s license number (if you have one)
  • Your Alien Registration Number (if you’re not a U.S. citizen)
  • Federal tax information or tax returns. Typically, this will be your Form 1040 unless you’re living abroad or in a U.S. territory. If you’re filing as a dependent student, you’ll also need your parents’ tax information.
  • Records of untaxed income. This includes child support, interest income, and veterans noneducation benefits. If you’re filing as a dependent, you’ll need this info from your parents as well.
  • Information about cash and assets. This includes savings/checking account balances; investments in stocks, bonds, or real estate (excluding the home you live in); and business and farm assets. If applying as a dependent, you’ll also need this information from your parents.

As you can see, finding this information could require you to sort through a lot of paperwork. For this reason, it’s best to begin the FAFSA early.

Also, if you can’t find all of this information at once, don’t worry. You can complete the FAFSA in multiple sessions, saving your progress as you go.

3. Fill Out the FAFSA Electronically

Now that you have the information you need, it’s time to fill out the FAFSA. Unless you’re unable to, I highly recommend filling it out electronically. It will be faster to submit than a paper copy, and you can save your progress along the way.

To start filling out the FAFSA online, visit this page.

If you’d prefer to use your phone, you can also fill out the FAFSA with the myStudentAid app (Android | iOS).

If you’ve created an FSA ID (which you did, right?), then you can enter it to pre-fill some of your FAFSA info, including your name, SSN, and DOB. You’ll also need an FSA ID if you’re filling out the FAFSA in the myStudentAid app.

If you get stuck during the process, consult the official FAFSA Help page. You can also contact the financial aid office at the college you plan to attend for further assistance.

4. Sign and Submit Your Application

Once you’ve completed the FAFSA, you need to sign and submit it.

If you signed in with your FSA ID, then you won’t be asked for additional signature information (yet another reason to create an FSA ID). One of your parents will also need to sign with their FSA ID if you’re a dependent student.

If you or your parent didn’t (or can’t) create an FSA ID, you also have the option to print, sign, and mail a signature page. Learn more here.

Once you’ve submitted the FAFSA, you can check its status by logging in at fafsa.gov.

Note that this will only tell you if your FAFSA has been successfully processed and received. To find out how much financial aid you’ve received, you’ll need to check with your college’s financial aid office.

More of a visual person? Here’s an infographic of the FAFSA process.

Beyond the FAFSA: Other Financial Aid Considerations

Filling out the FAFSA is the key to getting most types of financial aid. However, there are likely additional steps you’ll need to take.

If you plan to apply for scholarships through your chosen college(s), then consult their financial aid website for specific information. And if you’re applying for outside scholarships, you’ll need to refer to the particular scholarship provider’s website to find their requirements.

Beyond that, be sure to keep track of all deadlines. Put them on your calendar so you don’t miss them. If you need help setting up a calendar, consult this guide.

The federal deadline for submitting the FAFSA for the 2020-2021 school year is 11:59 p.m. Central time (CT) on June 30, 2021.

However, your state and college may have their own deadlines, and they could be earlier than the federal deadline. You can view your state’s deadlines here, and you should check with your college’s financial aid office for their deadlines.

Financial Aid FAQ

You should now have a good overview of how to apply for financial aid, and especially how to fill out the FAFSA.

However, there are still some important topics to address. Below, you’ll find answers to some common questions about financial aid:

What is the Expected Family Contribution (EFC)?

The EFC is a number that financial aid offices use to determine how much financial aid you will receive.

The formula to calculate EFC is complicated, but it takes into account factors such as your family’s income, assets, benefits, family size, and number of family members attending college during the year.

It is not the amount your family will have to pay for college or the amount of aid you receive. Rather, it factors into financial aid calculations.

How do colleges calculate financial aid?

So how do colleges calculate the financial aid you receive? There are a couple of steps, starting with need-based aid calculations.

Need-Based Aid Calculations

First, the college calculates if you’re eligible for need-based aid. Need-based aid is financial aid you receive based on your family’s income. It includes grants, direct subsidized loans, and federal work-study.

To calculate if you’re eligible for need-based financial aid, colleges use this formula:

Cost of Attendance (COA) − Expected Family Contribution (EFC) = Financial Need

COA is a number that estimates the full cost of attending a college, including:

  • Tuition and fees
  • Room and board
  • Books, supplies, transportation, loan fees, and miscellaneous expenses
  • Child or dependent care
  • Costs related to a disability
  • Costs for eligible study abroad programs

Once your college has subtracted your EFC from your COA, the result is your financial need. This number determines your eligibility for the grants and loans we mentioned above.

Non-need-based Aid Calculations

After determining your eligibility for need-based aid, your college will then determine if you’re eligible for non-need-based aid. This includes direct unsubsidized loans, direct PLUS loans, TEACH grants, and scholarships.

Unlike need-based aid, non-need-based aid doesn’t depend on your EFC. Instead, your colleges calculate it with this formula:

Cost of Attendance (COA) − Financial Aid Awarded So Far = Eligibility for Non-need-based Aid

Financial aid awarded so far includes aid from all sources, including private scholarships. This process is in place to prevent you from receiving more aid than you actually need to cover the cost of college.

To learn more about financial aid calculations, visit the official guide from Federal Student Aid. You can also contact your college’s financial aid office.

Should I file as a dependent or independent on the FAFSA?

For most students just out of high school, the answer is probably “dependent.”

But it depends on factors such as your age, marital status, and too many other criteria to list here. To help you decide, we’ve created a separate guide.

How early can I fill out the FAFSA?

The updated FAFSA comes out on October 1 of each year. So the earliest you could start filling out the FAFSA for the 2021 – 2022 school year would be October 1, 2020.

Beyond that, the earlier you submit it, the better.

Do I have to fill out the FAFSA each year?

Yes, you need to fill out the FAFSA for each year you plan to attend college or career school to be eligible for financial aid.

However, the process will be quicker if you’ve filled out the FAFSA before. Much of the information will be the same, and you just need to update what’s changed. Learn more here.

Does it cost money to fill out the FAFSA?

Nope. As the name says, it’s the Free Application for Federal Student Aid.

Is there a list of FAFSA questions I can see before I fill out the form?

Sure. Check out this sample FAFSA worksheet. Note that this form isn’t an actual copy of the FAFSA; it’s just a preview of the questions the FAFSA asks.

Can I get financial aid if I’m not a U.S. citizen?

In many cases, yes.

To start, many private and institutional scholarships are available regardless of your citizenship.

Beyond that, you may be able to qualify for federal student aid if you’re a U.S. national or a U.S. permanent resident. And there are many other cases as well, including if you have a certain immigrant status or are a citizen of one of the Freely Associated States.

For a full list of ways you can get federal student aid without being a U.S. citizen, visit this page. If you’re unsure if you meet these requirements, consult with your college’s financial aid office.

Get the Student Aid You Deserve

I hope this guide has helped you understand how financial aid works. If you take nothing else away from this article, remember to apply for financial aid. If you don’t, then you could miss out on major college savings.

Besides financial aid, there are plenty of other ways to make college cheaper. Check out these 39 ways to cut the cost of college to learn more.

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