College applications are all about being resourceful – from getting recommendation letters to looking for appropriate financial aid. The economic factor plays a crucial role during the entire procedure as you might be forced to temper your ambitions according to the tuition fees of different colleges. Under such circumstances, getting the right kind of financial aid can make a world of difference to your career goals. Before you begin the search for financial aid, here are a few things you must consider:
What are the different kinds of financial aid available to you?
Broadly speaking, financial aid is provided either by the federal/state government or by the college itself or by a third-party organization. This is the most fundamental way to differentiate between different forms of financial aids. They can be further categorized as being merit-based i.e. awarded to students with exemplary academic or extracurricular activities or need-based i.e. awarded to students who come from low-income families. While Federal Financial Aid is primarily need-based, scholarships provided by colleges are largely merit-based.
Understand the terminology
Another important differentiation is between grants, scholarships, loans, and work-study programs. A grant is arguably the best form of financial aid as it comes with no strings attached and you are not expected to repay it. Under the Federal Financial Aid program, the Pell Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG) are awarded to students on a need-basis. A scholarship is also similar except that it may have a few riders attached to it, for instance, you may need to maintain a particular GPA in order to retain a scholarship.
For students who aren’t lucky enough to get a grant or a scholarship, federal funded loans like the Stafford Loan and the Perkins Loans are viable options. These loans are provided at low interest rates and the government might pay a certain amount of the interest in some cases. Finally, Federal Work Study awards provide subsidized employment opportunities for students under a pay-as-you-study plan. This program is managed by the federal government in association with the financial aid division of a college and the employment opportunities could be on or off-campus.
How can you get financial aid?
The very first thing you need to do is fill out the FAFSA or the Free Application for Financial Student Aid, which is the most important document for students looking for financial aid. The FAFSA is a long and exhaustive form with close to 100 questions about your particulars, academic background, financial assets, colleges you have applied to, your parent’s tax returns, their financial assets, etc. To tackle the part of the form dealing with financial information, you will have to choose your status as dependent or independent. To be classified as an independent student, you must be 24 years of age and you must have a graduate degree. Additionally, you must have dependents who receive a part of the financial aid.
As is evident, you should have all documents related to tax returns and financial assets available while filling out the FAFSA. We’d also recommend you complete this with the help of your parents if possible. The form becomes available by mid-November every year, but it can’t be filled out until January of the next year, which is also the year when you hope to start college.
Understand the financial logistics
Once you fill out the FAFSA, how do things work? Based on the information collected through the FASFA, like your parents’ annual income, their savings and assets, the Estimated Family Contribution or the EFC is calculated. This is the sum of money that your parents can afford to spend on your education every year. Next, the cost of attending a particular college is estimated by adding boarding and miscellaneous expenses to tuition fee. The difference between the total cost and the EFC is the financial need or the deficit that needs to be fulfilled through financial aid. At times, you might need multiple scholarships or work-study awards to make up for this deficit. Either way, you must understand the financial logistics in order to deal with any possible problems.
The key to finding great financial aid is gaining practical knowledge about the functioning of the entire system. Even if you hit a wall with federal aid, look for other forms of scholarships provided by third-party organizations. If nothing else works out, you can always take a private loan to realize your dream of going to college. Good luck!
