10 Things You Should Know When Applying for Financial Aid
When planning your college career, one of the biggest questions asked is: How am I going to pay for it?
Overcoming Sticker Shock
Over the last several decades, college tuition has increased dramatically. Naturally, the sticker shock of college tuition can be a cause of concern for many students and families, but there are ways to negate the high price tag and still achieve your education goals.
1. Determine your financial situation
The first step in figuring out what you need in terms of financial aid is having an honest look at your family’s financial situation. Are you able and willing to cover the cost of tuition?
Having a clear understanding of your financial situation and establishing realistic expectations is essential to moving forward in pursuing other forms of financial aid.
2. Know the difference between merit-based and need-based aid
Merit-based and need-based financial aid are two different forms of assistance available to students, and it is important to understand the differences between them.
- Merit-based aid
This type of financial aid is based upon the achievements and academic performance of the student. The most common form of merit-based aid is scholarships that are awarded through the school or private institutions. - Need-based aid
This form of financial aid solely takes into account the ability of you and your family to pay the cost of college tuition. You can receive need-based financial aid through both private and federal student loans and grants.
3. Find out what merit can do for you
Merit-based financial aid is focused on your performance in school and excelling through extracurricular activities. Your first step to finding what merit-based aid you may be able to obtain is to speak with your high school guidance counselor. He or she will be able to direct you to local, state, and organizational opportunities that fit your unique skills. If you are an adult learner going back to school, you can reach out to the university’s financial aid advisor for assistance.
Additionally, public and private colleges often list available merit scholarships on their websites, so it is worth taking a look! For more information on the various merit-based scholarships available, you can also check out reputable websites such as Fastweb.com and Scholarship.com.
4. Understand loans, grants, and work-study
Need-based financial aid comes in three main forms, and having a clear understanding of their differences is essential to make sure you are applying for the aid that best suits your circumstances.
- Loans
Federal student loans are a common form of need-based financial aid to help students make up the difference left after any merit-based aid is applied. These loans require repayment beginning after you are no longer enrolled in college or drop below half-time enrollment. - Grants
Unlike student loans, grants are a need-based financial aid that does not need to be repaid upon graduation. There are several Federal and state grants available to students in need, and filling out the FASFA is the first step to figuring out which ones are available to you. - Work-Study
The Federal work-study program offers part-time employment to students that demonstrate a financial need. This allows the student to earn money that can be used to pay towards educational expenses while working in a field that supports their studies.
5. Complete the FAFSA
Once you have a clearer picture of the financial aid available, it is time to fill out the Free Application for Federal Student Aid (FAFSA). If you are interested in any form of need-based financial aid, this application is essential to determine your eligibility. Keep in mind that private institutions may have an additional form for you to fill out, so touch base with your prospective schools to inquire about their unique processes.
The FAFSA website is very user-friendly, but the process will go faster if you have the following items ready when filling out your form:
- Social security number (including your parents’ if you are a dependent student)
- Driver’s license number, if applicable
- Federal tax information or returns (including parents’ or spouse’s, if applicable)
- Records of untaxed income
- Bank account, investment, and real estate asset information
6. Apply for a private loan
Applying for merit-based and need-based Federal aid should be your first step when looking into ways of covering your tuition. If you find yourself still coming up short, private student loans can be a viable option. However, they do come with a price.
Student loans obtained through private banking institutions or schools should be a last resort for financial aid due to their higher interest rates. While Federal student loans typically have a fixed interest rate and do not require repayment when you are in school, the opposite is true for private loans. Additionally, private student loans are not typically eligible for forbearance, consolidation, or loan forgiveness.
7. Watch those deadlines!
Even if fall semester seems far away, many financial aid applications have early deadlines that are essential to meet. Check with your guidance counselor to make sure you know when applications for merit-based scholarships are due to avoid missing out!
For Federal financial aid, the FASFA can be filled out as early as January 1st of the year you will be attending college. If you’ll be attending school after July 1, 2017, you can submit your FAFSA beginning on October 1, 2016. Be sure that you get it in as soon as possible! The sooner you submit your application, the more money you may be eligible for when it comes to Federal and state grants.
8. Colleges want to help
If you find yourself struggling with covering the high cost of college tuition, you are not alone! With the state of the economy, financial aid officials are working hard to accommodate students in all financial situations.
To have the highest chance of receiving the money you need, it is best to start early! Contact your prospective colleges to find out their policy on financial aid, and make time to visit their websites where helpful information may be posted.
9. Don’t be afraid to appeal an offer
Despite all of your efforts, you may find yourself receiving less aid than you had hoped. If this happens to you, don’t panic! Financial aid officials understand the hardships that tuition can cause, and it may be helpful to appeal directly to the college for assistance.
By explaining your situation and asking for a review of the aid offered, some schools may be willing to make an adjustment to their financial aid formula on a case-by-case basis.
10. Don’t base your choice on finances alone
There are many factors that go into choosing a college that is right for you. Not only should it cover your desired course of study, but it also needs to be a match for your lifestyle and financial situation.
Ultimately, you want to choose the university that’s the best fit for you and your long-term goals. A college education is one of the best investments you can make for your future.
Applying to college is a big step towards your future, and it is a given that your educational journey can come with a high price-tag. That doesn’t mean there aren’t options! With the assistance of scholarships, loans, and grants, it is possible to achieve your goals without breaking the bank.
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