Scholarships, grants and loans can all help you pay for college. Think of scholarships and grants as gifts that you don’t have to repay. Scholarships are typically merit-based, and grants are need-based awards. Student loans, on the other hand, typically must be repaid within 10 years of your graduation.
Each type of financial aid follows its own application and offer process. Applying for federal student aid is the most common and is streamlined for efficiency. You’ll receive awards and offers through your college and through any private lenders or donors to which you have applied.
Finding and Applying for Financial Aid
It’s never too early to begin looking for scholarships. You can start your search on free websites like Fastweb and the College Board. You may also be eligible for scholarships and grants specific to your college or university, and even some high schools award them to college-bound students.
When you find a scholarship for which you qualify, its application instructions should be included. For scholarships, you may need to write an essay. Be sure to pay attention to all the rules and guidelines, as well as any deadlines.
For grants and loans, the application process typically is easier. Most grants and loans simply require you to complete the FAFSA, the Free Application for Federal Student Aid.
The FAFSA is used to determine your financial need and can qualify you for need-based loans and grants. Originally created to qualify individuals for federal aid only, the FAFSA is now used to determine most need-based aid, federal and otherwise.
Students — and their parents — should aim to complete the FAFSA during their senior years after their college applications are completed. Be aware that it has a deadline in the spring that can change year to year. You must complete a FAFSA each year you plan to attend college.
There will be an area on the FAFSA where you can indicate which schools you’ve applied to. Each school you list will receive a copy of your FAFSA results once they are completed by the government.
You may also need to complete a CSS/Financial Aid PROFILE (CSS Profile) via the College Board. Like the FAFSA, the PROFILE provides a way to determine financial need and connect students to aid opportunities.
Student Aid Report
If you are awarded a scholarship, the scholarship donor will alert you separately. The method depends on who is funding the scholarship and how you applied. For example, you may receive a notice with your acceptance letter from a college that you’ve been chosen to receive a scholarship.
If you filled out the FAFSA, you’ll receive a Student Aid Report (SAR) after the federal government processes your paperwork. This can take three to five days if you submitted the document electronically and provide a valid email address. If you submit a paper FAFSA and do not provide an email address, it could take three weeks for you to receive your SAR by postal mail.
Your SAR includes a summary of all the information you provided. It also includes your Expected Family Contribution (EFC), which estimates how much your family is able to pay for your higher education that year.
Copies of your SAR will be sent to every school you listed on your FAFSA. Each school that accepts you will use your SAR and EFC information to create a personalized financial aid package. Schools may also use the CSS Profile or another means of determining financial aid eligibility.
Financial Aid Packages
You’ll receive a financial aid package along with any acceptance letter you receive from a college.
The goal of any financial aid package is to make sure your financial needs are met for college, through a combination of family contribution, merit-based scholarships, different types of student loans and any other financial aid means. Each financial aid package you receive will be different, although your EFC should remain fairly constant.
Financial aid packages vary by school for two main reasons:
- Each college has a different cost of attendance. What may be enough financial aid at one school may not cover the costs of another.
- Each college has different funds to pull from. Although all federal financial aid is funded by the U.S. government, it is often distributed by each school separately. That means each school has a different pool of funds available, and a different amount it can offer per student.
Remember that financial aid packages are offers and are not deals. Once you decide on a school to attend, follow that school’s instructions to reply and accept the offer.
If Aid is too Low
You may find that your financial aid offer does not cover costs to your satisfaction. This may be because your EFC was higher than you expected.
In this situation, your best option is to turn to private lenders for additional student loans. Private lenders typically rely on your credit history or that of your parents to determine if you are eligible for a loan and, if so, to determine your lending terms.