There are many different types of financial aid. Get to know the amount of financial aid you can receive and how to qualify for scholarships and loans for college.
What is Financial Aid?
“Financial aid” is an umbrella term that encompasses all the money you’ll use to pay for college—other than your savings and income. It comes from a mix of government-funded programs and aid from your school. Here’s a quick breakdown of the different types of financial aid.
Scholarships and Grants
The best type of financial aid is free. Scholarships and grants do not need to be paid back, and they are typically awarded based on financial need or merit. So, if you demonstrate academic, artistic, or athletic talent, you may qualify for a sizable scholarship to help you pay for school.
If you qualify for work-study, you’ll be able to work part-time on campus and be paid through government funding to help cover expenses. This money does not need to be repaid. Most jobs even let you get schoolwork done during work hours—bonus!
Federal Student Loans
As a student, you are responsible for paying back any loans you take out. Repayment may start while you’re still in school or after a student loan grace period following graduation. Student loans can come in the form of Stafford Loans (or Direct Loans), which are government-funded and offer flexible repayment plans and fixed interest rates.
Federal Parent Loans
After your direct financial aid is applied, parents have the option to take out loans designed specifically to help you pay for college. Parent PLUS loans are paid while the student is in school, and they include the option to apply for deferment.
How to Qualify for Financial Aid
In order to qualify for any sort of federal aid, you need to complete the FAFSA (Free Application for Federal Student Aid) online. The FAFSA will evaluate your financial need and award aid accordingly.
You’ll need the following information to complete the form:
- Your Social Security Number
- Family Size and Income
- Your Income
- List of Colleges You’re Applying To
If you’re applying for financial aid for the 2020-2021 school year, you can file and submit your FAFSA between October 1, 2019 and June 30, 2021.
Read More on How to Apply for FAFSA
To get a realistic idea of the amount of financial aid you’ll receive, use the following tools.
Net Price Calculator
A school’s net price typically includes tuition, room and board, books, and miscellaneous associated costs of college. Gone are the days of doing that math by hand. Many institutions offer their own net price calculators that show their specific costs. In fact, The College Board has an aggregated, filtered list of schools’ net price calculators. You can even browse by state or search for specific schools. Don’t see the school you want? Fill out the Information Request form.
Student Loan Calculator
If your financial aid will include any student loans, it’s important to factor in the amount of student loans you’ll need to take out. Use a student loan calculator, like the one College Ave offers, to see your estimated monthly payments and explore the best ways to save money in the long run.
Federal Student Loan Limits
There are specific limits to the amount of state and federal funding you can receive. Undergraduates can borrow up to $12,500 annually and $57,500 total in federal student loans. Graduate students can borrow up to $20,500 annually and $138,500 total. The limit you’re assigned depends on the cost of the school you attend and factors like dependency status.
Getting Your Financial Aid Results
To answer, “How much financial aid will I get?”, you will receive an award letter from your college or university that outlines the amount of aid you’ve been awarded. Since many offers are tied directly to the schools you’ve applied for, the date you receive the offer will vary. Most offers are sent in the winter or spring before the start of the school year. Your financial aid award letter will likely include a combination of federal, state, and school-specific aid. Make sure you read it closely before you decide which aid to accept.
The only way to know exactly how much financial aid you will get is to complete the FAFSA. You should fill out the FAFSA as soon as it becomes available to ensure that you get the most financial aid.