How does financial aid work

That's because a you may be wrong, and b even if you're right, the FAFSA is also required for most local, state, and individual school financial aid, including merit scholarships. Whether you should submit the CSS Profile probably depends on whether the financial aid you are interested in or the school you plan to attend requires it. That means, for example, that you submit it Oct. Although the federal deadline to submit is June 30 of the academic year in this case June 30, , that will likely be too late to obtain most financial aid.

It will also likely be well past the deadline for aid dispersed by most states and colleges. You must also renew your FAFSA for each academic year you are in school or you will not qualify for additional federal financial aid including renewable aid you received the previous year.

The renewal process is usually easier and faster than the original because much personal and demographic information is retained. You still need to check it to make sure it is accurate, but there is no cost to submit or renew the FAFSA. Do this Oct. Check the College Board list of Participating Institutions and Programs for detailed information about which schools require CSS and which classifications of students or parents are required to file.

Amherst College in Amherst, Mass. Loyola University in Baltimore, Md. Waivers may be available for first-time domestic college applicants if:. The open date—the soonest you can apply for financial aid—is more important than the deadline, which is the latest you can apply.

Procrastinators beware! Although the FAFSA, the CSS Profile, colleges, and universities all have deadlines—the last date you can apply for aid each year—the most important date to remember is the open date — the first date each year you can apply for financial aid. The open date for the academic year , for example, is Oct. Whether need-based or merit-based, federal or private, financial aid typically comes in one of the following forms:. A grant is "free" money that doesn't need to be paid back except when you fail to live up to the terms of the grant, such as by leaving school.

Grants can come from the federal or state government, schools, or private or nonprofit organizations. Most grants are need-based but merit-based grants are also available. Like grants, scholarships are gifts and do not need to be repaid unless you don't live up to the terms of the scholarship. Also like grants, scholarships can come from the federal or state government, universities, or private or nonprofit organizations.

Scholarships tend to be merit-based, though there are also scholarships that are need-based or that take both merits and need into consideration.

Some scholarships are aimed at specific groups, such as women, minorities, and students from military families. Learn about scholarships that may be available to you through your school counselor, college financial aid office, or even at your local library.

Work-study typically refers to federal work-study, a program that provides part-time work on or off-campus while you are enrolled in school. Federal work-study is only available to you if you have demonstrated financial need. Qualifying does not guarantee you a job. You will need to apply, interview, and be hired. You will earn at least the federal minimum wage more for higher-skilled jobs depending on when you apply, your financial need, and the school's available funding.

Another type of job, known as a non-work study, is also available at many colleges and universities. These jobs are not government-sponsored, earnings vary, and funding comes from the department doing the hiring. To learn more about both programs, contact your college financial aid office. Federal student loans are government loans and include terms and conditions with benefits i.

The Federal Direct Loan Program offers four types of federal loans:. Private student loans are made by banks, credit unions, and other state-based organizations. These loans include terms and conditions set by the lender and are generally though not always more expensive than federal student loans.

Unlike most federal loans , private loan rates are based on your credit score and lenders may offer you a variable interest rate instead of a fixed one. You may be required to begin paying back your private loan while still in school.

Federal loans allow you to wait until you leave school or graduate. Most of the details of obtaining financial aid take place at the college or university level. Importantly, while there are lots of similarities in the ways colleges award aid, each school has its unique process when it comes to open dates, deadlines, procedures, and the actual awards process. It's especially important to understand the differences between scholarships, grants, and loans see above when you read your financial award letter.

Others package financial aid with no loans and some even raise your financial aid package each year to cover tuition increases. It pays to know not only what you will get but also how it will be packaged. A big part of the financial aid awards process has to do with you and your family's ability to pay for college—that is, your expected family contribution EFC.

In addition to some changes in the way the SAI is calculated, the change attempts to clarify what this figure is—an eligibility index for student aid, not a reflection of what a family can or will pay for postsecondary expenses.

When the letter will arrive depends on the school, but generally, you can expect it at about the same time you receive your acceptance letter from that school. The amount of aid offered can range from zero to the full cost of attending college. It will be broken down into three categories: free money you don't have to pay back, earned money via work-study or non-work study , and borrowed money either from federal or private student loans.

If you feel your federal financial aid award is inadequate, you can request a professional judgment review by the awarding school. However, you will need a legitimate reason to convince the school your award is insufficient.

One way would be to demonstrate that your family's financial situation has changed for the worse. If that's the case, the school will typically ask you to submit a letter summarizing the new circumstances.

This could include a divorce, a death in the family, a job loss, or sudden high medical costs. If another school has offered you a larger award, you could try contacting the school offering the lower award and ask if they will match the larger offer.

Historically, many colleges and universities have been criticized for encouraging college candidates to commit early with the understanding they could not switch colleges, even though the understanding was not legally binding. For the candidates, early commitment could mean passing up a better financial aid package from another school.

Your EFC might be more than you can realistically afford. Some schools use supplemental data like home equity when allotting their private aid to students, which means your EFC might be different at a more selective school. Check out our book Paying for College for more detail on these situations, and strategies for how to deal with them.

Get one-on-one help from former Ivy League and top tier admission officers. Our College Admission Counselors will help you find, apply, and get accepted to your dream school. Learn More. Connect with our featured colleges to find schools that both match your interests and are looking for students like you.

Teach or Tutor for Us. College Readiness. All Rights Reserved. The Princeton Review is not affiliated with Princeton University. Recently viewed. The award packages will vary but likely will include a mix of federal, state and institutional aid.

Not all financial aid is created equal, so be judicious about the type of aid you accept. Max out aid in the following order before taking on the next type:. Earned aid is money you earn by working at a work-study job. Borrowed federal aid is money you borrow from the Department of Education that you pay back with interest.

Federal student loan borrowers have access to income-driven repayment plans , which can lower your monthly payment, and forgiveness programs , which can offer loan relief after you make qualifying payments for a certain amount of time. Borrowed private aid is money you borrow from a bank that you pay back with interest. Your interest rate typically depends on your credit score and other details about your finances.

Before you know it, your award letters will arrive and you can choose a college that fits you and your budget. What is financial aid? How to qualify for financial aid. Need-based aid. Merit-based aid. Qualifications needed.

Financial need. Most scholarships. Where to get financial aid. Types of financial aid.