The Edmit Guide to Financial Aid
- Getting financial aid is a key way to reduce your college costs.
- Financial aid comes in many forms and can be based on your financial situation or your academic profile.
- The FAFSA and the CSS Profile are two forms that colleges use to determine how much aid you will receive.
- It's important to be aware of key deadlines you need to meet to qualify for financial aid.
The average total cost of attending college continues to rise at a much faster rate than that of U.S. household incomes, leaving students with often crippling debt.
To help pay for college, students can apply for financial aid. There are several different types of financial aid, including need-based aid such as loans and work-study jobs and merit-based aid such as grants and scholarships.
Need-based aid is awarded to students based on their financial means. Need-based aid is provided when a family does not have sufficient financial ability to pay for the total cost of college. Merit-based aid is need-blind and awarded based on students’ achievements, which may be academic or related to a hobby or other community activity.
Starting in the fall of your senior year of high school, it is time to fill out financial aid applications in accordance with the relevant deadlines. Submitting financial aid applications sooner can help you to receive the greatest amount of aid possible.
What is Financial Aid?
Financial aid enables students to pay for college, even when they don’t immediately have the money to cover the total cost of attending a higher education institution.
Financial aid can cover expenses such as tuition, fees, room and board, books, and transportation.
Aid is awarded by federal and state agencies, colleges and universities directly, high schools, and other entities such as foundations, corporations, and nonprofit organizations.
How Do I Apply for Financial Aid?
Read more about how you can get financial aid.
Students can apply for financial aid starting with a general application to the U.S. Department of Education known as the FAFSA. However, the FAFSA cannot be completed until you are a senior in high school and will be attending college the following year.
Filling out the FAFSA is the first step to apply for federal financial aid. This form is used to determine your family’s financial need and which types of financial aid for which you may qualify.
The College Board is the nonprofit organization that administers the CSS Profile. Some colleges use the CSS Profile in place of or in addition to the FAFSA to determine students’ eligibility to receive financial aid.
Even if you don’t think that you’re eligible for financial aid, you should still apply. A FAFSA application is often required to receive merit-based aid.
To ensure a smooth process when applying for financial aid, follow these steps:
Create an FSA ID. FSA IDs are required for both parents and students. The FSA ID allows you to log in quickly and makes it easy to edit and complete your application.
Collect the required documents. The FAFSA requires various information from the student and parents, such as Social Security numbers and tax return information. Collecting all this information prior to beginning the application will make the process easier.
Know your deadlines. The FAFSA application is available starting October 1 and remains available for almost nine months, although each school has different FAFSA application deadlines. Submit your FAFSA as early as possible for the best financial aid results.
What are the different types of financial aid?
There are four types of financial aid for college students: grants, scholarships, student loans, and work-study programs. Depending on your family finances, financial need, academic record, extracurriculars, and demographics, you may be able to apply for all four types of financial aid.
According to the College Board, approximately two-thirds of college students receive some form of financial aid--and here at Edmit, we know many of you are interested in finding out just how much money you can get for college.
Grants and Scholarships
According to the U.S. Department of Education, grants and scholarships are “free money”--money allocated for higher education expenses that does not need to be repaid. Both grants and scholarships can come from federal or state governments, directly from one’s two- or four-year college or university, businesses, religious groups, civic associations, and nonprofit organizations. Many grants and scholarships are awarded on a competitive basis, and can be one-time gifts or recurring over the duration of one’s education.
Student loans are funds allocated for higher education expenses and will need to be repaid, with interest, after graduation. There are two types of student loans: federal and private. Federal student loans, administered by the U.S. Department of Education, fall into four areas:
Subsidized--allocated for undergraduate students with financial need
Unsubsidized--allocated for undergraduate, graduate, and professional students regardless of financial need
Direct PLUS loans--allocated for graduate or professional students, or parents of dependent undergraduate students
Direct Consolidation loans--allocated for students who would like to combine all their federal student loans into one account.
Private student loans are loans for education expenses from private institutions, such as local banks, national banks, and credit unions.
Historically, federal student loans have lower fixed interest rates than private student loans. Additionally, federal student loan servicers may have more flexibility regarding repayment plans, including deferment and income-based repayment plans, compared to private student loan lenders.
The federal work-study program funds part-time jobs at participating colleges and universities around the country, enabling students to earn a pre-set amount of money each semester to put toward education and living expenses. (Fun trivia: When in college, the Edmit team’s work-study jobs included stints at our campus Parking & Traffic office and Career Services department.) Ideally, work-study jobs are intended to provide on-the-job work experience that relates to the student’s major, although each student’s work-study experience will vary based on campus need, job openings, and hiring practices. Federal work-study jobs are available to both part-time and full-time undergraduate, graduate, and professional students who demonstrate financial need.
"Need-Based" vs. "Merit-Based" Financial Aid
Your eligibility for financial aid can be based on your financial situation or non-financial factors.
Need-Based Financial Aid
Need-based financial aid refers to financial aid funding that’s awarded to a student based on their financial profile, and can include grants, scholarships, student loans, and work-study jobs. If a dependent student and their parents don’t have the financial means to pay for a given college, they may qualify for need-based financial aid. Colleges and universities use the FAFSA and CSS PROFILE to get a holistic picture of a student’s finances and determine eligibility for need-based aid.
With the exception of the Iraq and Afghanistan Service Grants, most federal aid is need-based aid, with the federal government determining eligibility solely from a given family’s finances. Private aid can be both need-based and merit-based.
Merit-Based Financial Aid
Merit-based financial aid typically comes the form of grants or scholarships, often requires an application and/or selection via committee, and typically rewards a student’s accomplishments and talents, particularly in the areas of academics, athletics, arts, and volunteer or charitable works. Some merit-based aid may consider financial need in eligibility criteria; others will take a need-blind approach.
Merit-based aid options are vast and varied. Individual academic departments may have scholarships specifically for promising students by major. Local businesses and civic organizations may allocate scholarships for high school students, especially those headed to specific four-year colleges in the region. There are niche scholarships, with funding available for hundreds of interests ranging from civic-minded bowlers to aspiring cosmetologists and beauty school students.
What Financial Aid Deadlines Should I Be Aware of?
Read more about financial aid deadlines.
The FAFSA releases its application for current high school seniors annually on October 1. The federal deadline is not until June 30, although each school may have its own, earlier deadline. Be sure to keep track of the specific financial aid deadlines for each of your target schools. The earlier you complete the FAFSA, the more aid that you are likely to receive.
How Do Schools Decide Who Gets Financial Aid?
Each college individually determines your family’s financial need by subtracting your Expected Family Contribution (EFC) from the school’s cost of attendance. Each school sets its own cost of attendance figure on an annual basis.
Your EFC will be calculated by the Department of Education after you submit the FAFSA. Your EFC is the amount of money that your family is expected to contribute; generally, this is the amount not covered by financial aid.
Is There a Limit to How Much Financial Aid I Can Receive?
Your eligibility to receive financial aid is calculated annually as the difference between your school’s cost of attendance and your Expected Family Contribution. Not only does the total amount of aid that you are eligible to receive change each year, but also the time period during which you are eligible for need-based financial aid extends longer than the length of time that you are enrolled in school. Students are permitted to borrow money in the form of subsidized federal loans for up to 150 percent of the length (in years) of their degree programs.
When Will I Receive My Financial Aid Award Letter?
Read more about when your financial aid award letter will arrive.
After you’ve submitted the FAFSA, the colleges to which you have been accepted will review your FAFSA information to offer a financial aid package with one or more types of assistance.
Your financial aid award letter will explain how much money the school is offering and in what form, such as grants, loans, scholarships, or a work-study position.
While there isn’t a specific date on which financial aid award letters are mailed, most colleges send financial aid letters at around the same time that they send admittance letters. This is normally in March or April of your senior year, for regular decision applicants.
How Do I Appeal a Financial Aid Award?
Read more about how to appeal your financial aid award.
Believe it or not, you actually can ask for a better financial aid package. If you are not satisfied with the offer in your financial aid award letter, then you can call the school’s financial aid office to appeal your award. The financial aid office will then request additional information from you and provide specific instructions on the next steps.