Navigating the financial aspects of college education can be challenging, particularly with tuition and related costs escalating faster than the general cost of living. Hence, knowing how to pay for college, exploring available options, and devising a robust financial plan are of utmost importance.
Financial aid, facilitated by government, educational, and private organizations, aims to assist students with education-related expenses, like tuition, accommodation, books, supplies, and fees.
Although much financial aid stems from government funding, government subsidies for public education do not fall under the umbrella of financial aid. The term “financial aid” is exclusive to the financial awards offered to individual students.
In the United States, both federal and state governments extend both merit and need-based financial aid to college students in the form of low-interest loans, grants, and work-study opportunities.
There are about nine federal financial aid programs, 605 state programs, and nearly 7,000 higher education institutions that offer financial aid.
Prominent federal programs include Stafford Loans, Pell Grants, the Work-Study Program, Federal PLUS Loans, Perkins Loans, and Federal Supplemental Educational Opportunity Grants. The U.S Department of Education (DoE) extends both Federal Stafford Loans and Federal PLUS Loans. Federal Perkins Loans are also granted by the U.S DoE but are issued via annual appropriations through participating schools.
Even though the majority of financial aid programs are federally sponsored, state governments frequently provide some merit and need-based options, often in the form of grants, tuition waivers, scholarships, and work-study programs.
Furthermore, most post-secondary institutions offer numerous forms of financial aid. Students requiring financial aid beyond governmental or school offerings may consider private education loans from banks and lending institutions. However, private education loans typically carry higher interest rates compared to federally funded education loans.
Most institutions require students to submit the FAFSA form to apply for financial aid. Some also require an additional need-based analysis document, the CSS/Profile being the most common.
What Kind of Financial Aid Programs Are There?
After choosing a college, one of your initial steps should be reaching out to their financial aid office. Before you finalize your classes or accommodation, it is crucial to formulate a financial plan for your college education. The financial aid office is equipped to provide information about the specific financial aid programs available at your college.
Remember, the spectrum of options can vary significantly from one school to another and even among students. So, it’s crucial to understand what kind of aid is on offer at your college and what you are eligible for. It’s always wise to thoroughly explore your options, ask questions if you’re unsure about anything, and make informed decisions regarding your financial planning for college.
Federal Aid
Indeed, the U.S. government provides a variety of financial aid options such as student loans, grants, and work-study programs. To be eligible for any of these, you need to complete the Free Application for Federal Student Aid, more commonly referred to as FAFSA.
The deadline for this application is in January of the year before your college attendance. You can access the application form and comprehensive information related to federal aid at www.fafsa.ed.gov. Remember, filling out the FAFSA accurately and ahead of time is a crucial step toward securing your college financial aid. Don’t hesitate to seek assistance if you need help with this process.
Scholarships and Grants
Absolutely! Scholarships and grants are indeed the most appealing type of aid precisely because they aren’t required to be repaid. They essentially function as free money that helps brandish the cost of your education. Scholarships are generally given for academic or athletic performance, while grants are predominantly need-based.
Scholarships have a range of sources, including but not limited to colleges and their individual schools and departments. There are possibilities to apply for scholarships from the state and federal government, as well as the private sector, including businesses, community groups, and private scholarship funds.
While reaching out to the financial aid office, it’s beneficial to inquire about scholarships from external organizations too – spanning businesses, private scholarship funds, and cultural, ethnic, or religious organizations. A variety of factors, such as income level, military service, gender, race, age, religion, or field of study, may qualify you for a scholarship.
Grants, on the other hand, are usually need-based. Undergraduates can apply for the Federal Supplemental Educational Opportunity Grant and the Federal Pell Grant. Lots of states also provide need-based grants and funding for graduate research projects.
The availability of scholarships and grants can even be a decisive factor for some students when choosing a college. One institution might offer a plethora of such awards that you can apply for, while another might offer quite a few less. Multiple websites can help narrow your college search based on the criteria for scholarships and grants, enabling you to explore a variety of opportunities that suit your personal circumstances.
Fellowships
That’s correct! Fellowships, like scholarships and grants, do not have to be repaid. Funding for fellowships can come from either the government or private organizations. Generally, this money is offered in the form of semester stipends that can also cover the cost of your tuition.
As for who gets these fellowships, it can vary. Sometimes, the school’s faculty selects the recipients. However, in other instances, students have to apply and compete for fellowships, with the awards given based on factors like merit, faculty’s choice, and financial necessity. Fellowships can be a great way to fund your education, and they also have the added benefit of potentially giving you access to valuable resources and networks in your field of study.
Assistant Positions
Absolutely! Graduate students who secure assistant positions are compensated for tasks they perform within the university, such as serving as Teaching Assistants (TAs) or Research Assistants (RAs). These roles are typically related to their field of study or their department.
As a TA, you’re usually responsible for teaching introductory-level classes to undergraduates. Funding for this comes directly from the university. On the other hand, as an RA, you typically assist faculty with their research, usually in a lab setting. These positions are often funded by either federal or private grants.
The amount of money received from assistant positions can differ significantly based on various factors, such as government aid and faculty grants. Assistant positions in many ways mirror work-study programs in undergraduate education, with students working in exchange for financial support.
The specific responsibilities and benefits of assistant positions can vary greatly by school, department, and program. Therefore, it’s a good idea to reach out to your university or academic department for more tailored information. These positions not only provide financial support, but also experiential learning and networking opportunities that might prove invaluable in your future career.
Veterans’ Aid
Should you currently be serving, or have served before in the U.S. Military, you are likely eligible for financial support from the Veterans Affairs Department. The VA also constitutes initiatives for the families of military members, encompassing spouses and offsprings of servicemen who have lost their lives or have been injured during their service.
Work-Study Programs
The Federal Work-Study (FWS) schemes are financed by the federal government, yet managed by distinct colleges. The FWS schemes are exclusively accessible to pupils who demonstrate financial necessity and are at least half-time registered in a participating university or college.
Presently, there are in excess of 3,000 academic bodies acquiring FWS resources. The majority of institutions not partaking still run student employment schemes aimed to assist students with low income to pay for their education.
Regardless of the scheme, the job prospects are generally confined to part-time, entry-level roles on campus. Such roles might involve positions like a departmental clerk, parking aide, cashier, cafeteria chef, and campus/building maintenance staff.
Student Loans
The U.S. government provides two distinct need-based loans: the Federal Perkins Loan and the Federal Subsidized Stafford Loan. Additionally, they sponsor the Federal Parent Loan for Undergraduate Students (PLUS) and the Federal Unsubsidized Stafford Loan, which are accessible irrespective of financial need.
Typically, student loans have a very low interest rate (varying between 2% and 8%), however, students often accrue debt totalling tens of thousands of dollars and spend decades servicing these loans. This reality is due to the generally high cost of college education. Therefore, it’s advisable to explore all the options mentioned previously before applying for a loan.
Despite the looming prospect of debt, a vast majority of students depend on loans for a portion of their college costs. If you’re contemplating securing student loans, ensure you have a long-term career plan in place to afford loan repayments upon graduation.
Sources for Financial Aid
Grasping the types of financial assistance is the initial step, but identifying how to locate these types is equally critical. The resources for financial aid generally fall into three fundamental categories: aid from the government, aid from your college or university, and private aid.
Governmental Aid
The federal government, as well as the majority of states, offer several schemes to help fund university education. For government financial aid, everything starts with the FAFSA.
FAFSA
The Free Application for Federal Student Aid (FAFSA) proves to be the initial point for federal financial assistance. Completing this application helps establish if you’re eligible for the Pell Grant, the Federal Supplemental Educational Opportunity Grant, the Federal Work-Study Program, along with government-subsidized loans. Make sure you apply by January preceding your intended college start date.
State Aid Programs
According to the National Association of Student Financial Aid Administrators (NASFAA), practically every US state education agency operates one or more financial aid programs. Naturally, these programs vary considerably.
A lot of them are need-based, and many demand recipients to attend higher education within their home state. The NASFAA provides a clickable map that outlines all state-based aids available in each state. Some states, like Florida for instance, have their own application procedures akin to FAFSA.
Seek all available programs in your state. If you’ve opted for college outside of your home state, ensure you check out the aid programs available both in your home state and in the state of your chosen college. While you may not be eligible for aid with in-state restrictions, you might still find programs in both states for which you qualify.
Colleges and Universities
Most colleges and universities themselves offer financial assistance through their endowments and various funded scholarships. These encompass merit-based scholarships (such as sports scholarships, academic scholarships and fellowships, and music scholarships), need-based scholarships, and more.
Given the approximately 5,300 higher-level institutions in the US, it’s beyond the scope of this guide to detail the programs available at each. When you’ve refined your search to just a few institutions, reach out to their financial aid offices to establish your eligibility. Typically, your admissions counselor will assist in connecting you to the appropriate individuals.
CSS Financial Aid Profile
Many universities use the College Board’s CSS Financial Aid Profile to ascertain eligibility for their assortment of financial aid programs. It’s somewhat similar to FAFSA, though the queries aren’t exactly the same. CSS is a fee-based profile service, and therefore, it’s important to check with your admissions office before purchasing to find out whether your institution employs this service.
Assistant positions and Fellowships
A multitude of universities provide assistantships and fellowships to graduate and doctoral students. These are typically bestowed based on the student’s capacity to aid the university, be it through teaching lower-level classes or propelling research in a specific field.
Offerings vary greatly across institutions, and the availability constantly changes: irrespective of your prowess as an instructor in your field, it’s irrelevant if the university only has two slots and both are occupied.
To find more about the assistant positions and fellowships on offer, get in touch with the respective program head or dean. If you’re unable to contact that individual directly, liaise with admissions or the aid office.
Private Scholarships
The final tier of financial aid: private scholarships, is the most varied. Government aid programs usually follow a straightforward path. College and university-based aid programs too, although each institution has its distinct process. However, private scholarships could be very distinct.
Private scholarships could be from numerous sources, ranging from companies seeking inexpensive advertising (for instance, Duck Tape’s Stuck at Prom scholarship) to various specialty foundations and clubs. Some exceptional examples include:
- $10,000 Create-A-Greeting-Card Scholarship (Prudent Publishing Company)
- FMA Solo Scholarship to a music student with an interest in flying (Flying Musicians Association)
- $1,000 for those who are tall (Tall Clubs International)
- $2,000 for having a reliable plan to survive a zombie apocalypse (Unigo)
Every single one of these scholarships are real, and you could win if you fulfill the requirements. Those links are connected to their actual application pages.
Not all of these private scholarships are as extraordinary as those aforementioned, though. Many are awarded for more regular accomplishments, such as penning an essay on a particular topic or excelling academically in high school. Others are awarded to individuals from specific ethnic or religious backgrounds.
Frequently, corporations sponsor scholarships linked to specific majors that could eventually benefit the corporation. For example, a large-scale corporation that requires a particular type of engineer may establish a scholarship for promising or underprivileged students pursuing that specialty.
With such a vast array of scholarships accessible (Unigo estimates that there are more than five million!), numerous students are daunted trying to decide which one to apply for. Applying for scholarships consumes time, so it’s vital to focus on good-fit scholarships- those that provide you the highest chance of success. Here are a pair of strategies to do so.
Method 1: Leverage Your Own Network
Generally, the scholarships you’re most likely to win are the ones to which you’re already connected in some manner. As a first step, explore your own network for scholarship opportunities.
Generally, the scholarships you’re most likely to win are the ones to which you’re already connected in some manner. As a first step, explore your own network for scholarship opportunities.
If you have a part-time job, inquire if your employer offers a college scholarship program. Ask the leaders of any extracurricular activities you’re involved in (ranging from 4H to additional activities) if they have any access to or are aware of any related scholarships.
Method 2: Use a Scholarship Search Tool
This method is excellent for identifying a small number of high-value scholarships. But it’s important to remember that regardless of how many scholarships you attain using Method 1, you’ll probably require more to cover your entire tuition. Hence, the next most efficient way to locate good-fit scholarships is to utilize a scholarship search tool.
This method is excellent for identifying a small number of high-value scholarships. But it’s important to remember that regardless of how many scholarships you attain using Method 1, you’ll probably require more to cover your entire tuition. Hence, the next most efficient way to locate good-fit scholarships is to utilize a scholarship search tool.
The College Board’s Big Future Scholarship Search tool, US Department of Labor’s Scholarship Finder, and Fastweb are some effective tools that can enhance your scholarship search.
If you are still hunting for more, you can check out USA Today’s article on the top ten sites to search for scholarships. Now that we’ve covered all the major types of and sources of financial aid, we can discuss.
How to Apply for Federal Financial Aid
Absolutely, applying for Federal Financial Aid can indeed be a daunting, stress-inducing, and bewildering task. However, rest assured, with a little guidance, you’ll discover that the process is much more straightforward than it initially seems.
Know Your Deadlines
Certainly, a significant portion of the stress that comes with applying for financial aid is often due to postponing the process until the eleventh hour. It is quite an intensive process, and it can be overwhelming if not given sufficient time. Therefore, it’s crucial to do your research, be aware of the deadlines for any form you need to submit, and initiate the process early.
The deadline for the Federal FAFSA form is generally at the end of June for a particular academic year. Consequently, for the 2021-2022 academic year, the deadline would be June 30, 2022, and for the 2022-2023 academic year, it would be June 30, 2023.
However, the deadlines for aid from the state are usually much earlier. If you’re applying for state aid, you’ll also need to complete additional forms besides the federal paperwork.
Scholarships or other unique programs to your college or university will likely have their own specific deadlines. Many schools utilize the CSS Profile Form for private scholarships and aid.
It’s important to double-check the deadlines for all the types of aid you’re applying for. You can find the federal deadlines on the application deadline page of the Department of Education’s website.
Get Organized
Absolutely, the paperwork involved in the financial aid application process is substantial, and it’s essential to not misplace any of it. A wonderful method you can adopt to keep your papers organized is to invest in an accordion-style file folder. Use this folder to store your completed FAFSA forms, loan agreements, personal financial documents, and so forth.
I totally agree with your point. Printing out every email related to financial aid that you send or receive, as well as the online forms you fill out, is a very astute strategy. This gives you a hard copy in case of a computer crash, or in case you need to dispute any terms for any reason.
The file folder you use will house highly sensitive information, such as your Social Security number, tax returns, personal information, and so on, and hence should be handled accordingly. Make sure to keep it in a completely secure location. Not doing so could invite unwanted trouble, including identity theft.
Get Your FAFSA PIN Number
Indeed, each student is assigned a unique PIN number by the Department of Education, which is a must-have to electronically “sign” your online FAFSA application. Besides this, you would require the PIN to access your account and information.
It would be a wise move to apply for this PIN well in advance. While it may take only 1-3 days to receive your PIN number, the duration could potentially be longer if the system is under heavy load or if your information isn’t correctly filled out. If you delay your PIN application until the very last minute, you might perilously run the risk of missing the application deadline.
Fill Out and Submit the FAFSA Form
For sure, the FAFSA form can be perplexing for many people. This confusion primarily arises because the FAFSA form necessitates information from your tax return. Consequently, if you’re among those who entrust the task of completing your tax return to another person, this information might be unfamiliar to you.
Before you embark on filling out the form, it’s advisable to go through a blank copy of the form and note any fields, categories, or terms that you don’t understand. If you encounter any confusing elements, you should reach out to your tax preparer well in advance for some elucidation. Securing answers to all your queries can take some time, hence it’s crucial that you initiate this process long before the deadline.
Also, before commencing to fill out the online form, ensure that you have completed the most recent year’s tax return. You’ll require a lot of information from your return to complete the FAFSA form.
Check Online for the Status of Your FAFSA Form
Yes, indeed. You can keep a tab on the status of your FAFSA form online, using the FAFSA website. You’ll need your PIN number to verify whether your form has been processed. The processing time for a FAFSA form may vary from 1-2 days to as long as 2 weeks.
It’s essential to understand that the status of your FAFSA form won’t inform you about the financial aid you are entitled to receive. However, it will indicate whether you’ve filled out the form correctly, and if it has been processed successfully. Detailed information concerning the aid you’ll receive will be provided by the school you’re planning on attending.
Contact Your School’s Financial Aid Office
Absolutely. Once your application has been processed, the next practical step is to get in touch with the financial aid department of the school you’re considering attending (or the several schools you’re evaluating). The staff in this department are well equipped to detail your financial aid options. These options could include scholarships, grants, subsidized or unsubsidized loans, tuition waivers, and/or work-study programs.
It’s sincerely encouraged to maintain a courteous and patient demeanor with the people working in these offices, even if the process tends to get frustrating. It’s a challenging task to distribute a school’s limited financial aid funds, and being disrespectful won’t make the process easier for anyone involved.
Apply Again Every Year
Absolutely right. A common misconception among new students is the belief that once they’ve received financial aid, they’re sorted for their entire college duration. This assumption can result in expensive errors. Both the FAFSA form and most state applications need to be completed annually in order to continue receiving financial aid. For aid specific to a school or its scholarships, students typically need to reapply or meet certain criteria again to keep benefiting from the aid.
There’s Help Out There
Indeed, the process can feel overwhelming, confusing, or simply too complicated for some. In such cases, remember that you can always seek the help of professionals. Hiring a professional doesn’t guarantee that you’ll receive the financial assistance you’re hoping for, but it can help alleviate some of the tension associated with the application process. However, exercising caution is always wise, as there are several financial aid scams out there. Please ensure that you undertake thorough research and only hire a professional with a proven track record and a solid reputation.
Reducing Costs
Certainly, finding all applicable financial aid is one step towards making college more affordable. The other step is to make a sincere effort, within all reasonable means, to lower your expenses. Effectively managing both strategies can help you reach a favorable financial situation by increasing the amount of money you possess and decreasing the total amount you’ll need.
For instance, suppose you manage to secure $20,000 per year in aid. Great job! Each dollar of aid reduces your total educational bill by a dollar, eliminating $20,000 from your yearly college debt.
However, a pause for thought is necessary here. According to the College Board, the average private college tuition is over $32,000. And that’s just tuition! Considering room and board, whether in-campus housing or a nearby rental, your yearly expenses could quickly surge to over $50,000. Suddenly, that $20,000 in aid doesn’t seem as substantial. This highlights the importance of cutting back on costs wherever possible. You should consider various ways you can reduce your expenses.
College Choice
That’s a very important point to consider. While college can indeed be a costly endeavor, it doesn’t automatically mean that the more expensive the institution, the more valuable the degree. As noted by Shana Lebowitz, a senior reporter at Business Insider, not all high-priced colleges necessarily produce graduates with higher-earning potential. Therefore, our advice is to choose a program that is both affordable and reputed for its high quality. Remember, the value of education lies greatly in the quality of the program and what you make of it, not just in the amount you pay.
Stay in State
The typical expense for tuition at a four-year public college for in-state students stands at a mere $9,410 (as per the College Board). Geographical locations have a profound interest in retaining their top talents, hence why the fees are made more affordable for local students.
Granted, you may find a more prestigious curriculum somewhere else. However, you should carefully consider how much this honestly matters. Although prestige might impact a few domains or specialties, the majority of career trajectories aren’t reliant on an Ivy-League certification, particularly at the undergraduate level. Identify the highest-rated in-state course within your realm of interest and center your pursuits on that.
Start with a Two-Year Program
If your chosen area of study permits, consider commencing with a two-year public college in your locality. According to the College Board, the mean cost for a two-year public institution is down to $3,440. If you can manage to finish your initial two years at this price and subsequently shift to a four-year course, you will save an average of $12,000 on your tuition and related costs.
Housing
Accommodation, coupled with food, constitutes another significant expense for college students. Here are a pair of recommendations to help you keep within your budget.
Live at Home
For a majority of students, residing at home with their parents is the most economical choice. If you live within an hour’s distance from an excellent in-state course (be it two or four-year) and your parents are agreeable, then consider staying put. You may choose to start contributing towards food or utilities, or perhaps even pay some rent. Nevertheless, you’ll still end up significantly better off financially compared to your counterparts who live on their own or in dorms.
Find Creative, Cheap Housing
If staying at home isn’t feasible, don’t worry, there are still alternatives. Keep your primary goal in mind: the purpose of attending college is to acquire an education, not merely to socialize or enjoy luxury living. Stay away from upscale college apartments offering resort-like amenities and opt for a more sensible selection instead. In this era of Craigslist and Airbnb, it’s more convenient than ever to discover individuals seeking to rent a room. Some students have even managed to obtain a free room in an elderly person’s home in return for assisting with simple household chores. With a bit of creativity, you can secure a place to live for a fraction of the usual rent.
Have a Financial Plan
When preparing for college, it’s vital not to overlook finances as they are as crucial as the rest of your university experience. You should devise a long-term strategy. For instance, investing in a pricier college might be worthwhile if it leads you to higher-paying professions, like a doctor or a lawyer.
If you include your college-related finances in your comprehensive plan, not only will you have a clear vision of the path you’re on in life, but you’ll also be well-prepared for how to finance it. This approach brings both direction and financial preparedness to your academic and professional journey.
Conclusion
Rendering college costs manageable is a challenge, yet it’s achievable. This can be accomplished by adhering to these two guidelines: firstly, gather as much financial assistance as feasible. Secondly, wherever possible, cut down your expenditures.