Financial Aid: What Do I Need to Know? 💸
4 min read•Last Updated on July 11, 2024
Everything to Know about Financial Aid for College 💸
What is Financial Aid? 🤷
Financial aid is any monetary award from the federal government, state, college, or private sources used to help you pay for college. Every school will have an advertised "sticker price," but you can find the Net Price, the price you are much more likely to pay, by subtracting various forms of financial aid. Each person will have different financial packages; no two people will be spending the same college price.
Think of it as buying an airplane ticket. The price you paid for your seat is most likely not the same as the person sitting two seats in front of you or across the aisle. Your goal is to receive the most amount of aid and pay the least amount possible.
Calculating Your Financial Aid Package 🔢
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Cost of Attendance 🏫
The Cost of Attendance, also the sticker price, is the estimated cost for attending a school for one full year and is comprised of a few things:
- Tuition
- Room and Board
- Books and Supplies
- Personal/living expenses Very few students pay the total Cost of Attendance.
Expected Family Contribution 🙌
Expected Family Contribution (EFC) is the amount that the federal government calculates that your family can expect to pay. It is determined by the following factors:
- Parent's prior year income
- Student's prior year income
- Value of parent's assets
- Value of student's assets
- Number in household
- Number in college
- Age of oldest parent
Financial Need 👐
Based on your financial need, each school will offer you a package of financial assistance that may include loans, scholarships, grants, and work-study plans. This is your need based financial aid. Subtract your total aid from the Cost of Attendance to get your Net Price:
Cost of Attendance - Expected Family Contribution = Financial Need
Check out this article for more detailed information on how to calculate your financial aid.
Types of Financial Aid 📜
Gift Aid 🎁
Gift aid is money you do not have to pay back.
Grants 🏅
Grants may come from the college, state, federal government, or other sources and are awarded based on your financial need. Students usually get the most money at the institutional (your college) level.
Scholarships 🤓
Scholarships have more eligibility requirements or an application process. They can come from the college, the federal or state government, your school, or private organizations.
Institution Scholarships
You may be automatically considered for specific scholarships when applying to a college, whereas others might require a separate, more specialized application.
Private Scholarships
There are tons of private scholarships available, and not just for seniors! There are national, regional, and local scholarships with different applicant pools, requirements, and reward amounts. You may have a higher chance of winning local scholarships because of a smaller applicant pool, but national scholarships may have higher rewards. Prioritize which scholarships get more of your energy by considering the award amount and difficulty of the application. Do your research, and apply for any you're eligible for. The rewards add up!
Learn more about how to get scholarships with this article.
**Pro Tip: Set up a separate email for anything related to colleges and scholarships. You don't want important emails to get lost in your personal email! **
Self-Help Aid ✋
Unlike grants, these awards are either earned through work hours or loaned to you, with added interest rates.
Loans 🏦
Often, financial aid offers will include some form of a loan. If you decide to accept a loan, you are borrowing money, and the amount borrowed will accrue interest over time. There are both federal and private loans. With federal loans, your interest is paid by the government while you are a full-time student. If you take out a private loan, you will have to pay all interest.
Work-study 👔
If you are offered work-study in your financial aid package, that money is still not guaranteed. You can opt out if you don't feel you can work that semester, and you won't receive the money. If you want to participate in work-study, you will need to find and apply for a work-study job. These may be on-campus jobs or off-campus through a partnership with local businesses. Keep your schedule in mind when deciding whether or not to include work-study as part of your financial aid package.
What to Think About Next 🤔
- Do you need to fill out the FAFSA this year? Make sure you know your deadlines!- Check out this introduction to FAFSA and details on how to apply for FAFSA
- Use the net price calculator on the schools' website to calculate your potential net price.
- Consider what your net price will be for all four years, not just your first year.
- Don't make debt your default. Make smart financial decisions by looking ahead to years into the future.- Read more about student debt and how much is too much
- Start browsing and applying for private scholarships. Don't wait!- Check out this article on how to start your scholarship search and this guide to the top 40 college scholarships.
- Remember to take time for yourself regularly. Financial aid is important, but so is your mental health. Work on implementing self-care routines and using mental health resources.