Financial Aid 101

When looking at the price tag of tuition, college may feel out of reach or too financially hefty. But did you know that more than 10 million college students receive some form of financial aid each year? College can be expensive, but federal aid can help you out.

Consider this your one-stop shop for financial aid 101! We’ll explore the differences among scholarships, grants, work-study, and loans to help you figure out what kind of financial aid you may be eligible for.

Start by completing the FAFSA

Here's our guide on how to complete the FAFSAFor every year you need financial aid, you will need to fill out the FAFSA (Free Application for Federal Student Aid). FAFSA usually opens on October 1. This year however, it opened January 1st. But keep in mind that your state may also have deadlines that should be listed on the form. You can submit your FAFSA online, or you can print it and mail it in.

Most of the information on the form is straightforward, but some things they’ll ask for might be confusing, like information about your IRS income tax returns. Ask a parent or guardian to help you out if you’re not sure or don’t know the answers. Parents/guardians also have a section of the FAFSA to fill out.

After your form is processed, you’ll receive a SAR (Student Aid Report). This form has all the information you submitted on the FAFSA, so make sure you scan it to double-check that all of the information is correct. The SAR also has a figure for the SAI (Student Aid Index). The SAI serves as an eligibility index utilized by your college or career school’s financial aid office. It helps them assess the amount of federal student aid you would be eligible to receive if you were to enroll in that particular educational institution.


Scholarships are like free money. And free money is good money, especially when it comes to reducing your financial burden post-college. The best part? There are thousands of scholarships available—that’s billions in scholarship dollars waiting to be awarded!

Check out local or state scholarships, ones tied to your college, and don’t forget to see if your parents’ employers have any that you could qualify for. Your church, local library, or community center may also offer scholarships or support resources. You can even win scholarships based on your ACT or SAT scores, by being a competitive athlete, or by participating in competitions in the arts, sciences, or technology.

There are hundreds of field-based scholarships as well. Do a quick online search around your field of study to see what scholarships pop up. If you have specific interests or talents, you could also win scholarships that way.

Some scholarships require you to meet certain criteria to keep them. For field-based or athletic scholarships, you may need to maintain a certain GPA, stay on a team, or fulfill other requirements to remain in good standing.

If you receive a private scholarship that is not based on your FAFSA, you will need to report it to your college so they can apply it to your tuition. Private scholarships may impact how much federal financial aid you receive. While scholarships contribute significantly to easing your financial burden, it’s equally important to stay informed and proactive in meeting their expectations.

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Most types of federal grants do not have to be repaid after college. (Hello, more free money!) There are federal and state grants, grants specific to your school of choice, and grants from a private organization or entity. Most federal grants are only awarded to students who demonstrate a financial need, and there may be eligibility requirements attached. If you become ineligible or need to repay a portion of your grant, your college should notify you.

The most commonly awarded federal grant is the Pell Grant. Do your research and submit your FAFSA to see if you are eligible for any federal, local, or private grants.

Work Study

Federal work-study programs allow you to essentially “work off” tuition costs while enrolled in school. If you qualify for work study, you can apply for an approved on or off-campus job that typically requires 15-20 hours per week in exchange for a paycheck you can put towards tuition.

Undergraduate and graduate students who demonstrate a financial need are eligible for work-study. If this is something that can work with your schedule, check with your school of choice’s financial aid office to make sure they participate in the work-study program and what options they have available.

Student Loans

Student loans are a helpful option if you still need additional funds to pay for college. However, it is important to fully understand student loans before you apply for them so that you are prepared for repayment once you either resign or graduate college.

Federal Loans

Federal loans can be subsidized (interest is paid for you for the first 6 months after you graduate) or unsubsidized (starts accruing interest immediately). Interest rates can be fixed, meaning they do not change throughout the life of your loan and provide a predictable monthly payment. Other federal loan are variable, meaning that they increase or decrease depending on market changes throughout the life of your loan and could cause your monthly payments to do the same.

Interest rates change every year, so it is important to remain aware of your current loan interest rates and the changes that could occur with each loan you apply for. Federal student loans also have the potential to be forgiven post-college if you meet certain criteria and apply for forgiveness.

Private Student Loans

As a last resort, (since this option tends to be most expensive), if federal loans, scholarships, grants, or any other financial aid does not cover the entirety of your tuition cost, you can consider private student loans. Private student loans typically give you the option for a fixed or variable interest rate. If you are considering a private student loan, you’ll want to consider asking a parent or trusted adult to cosign for you.

Private student loans are not eligible for loan forgiveness through the federal government. Both federal and private student loans can be refinanced or consolidated after making qualifying repayments.

Whoa, that’s a lot of financial aid 101 to take in at once! But hopefully diving into these different aid options equips you to make educated decisions about your financial and academic future. The amount of financial aid you receive depends on what you are eligible for. So submit your FAFSA  ASAP and spend some time researching scholarships, grants, and work-study programs.

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