Understanding College Financial Aid

College Financial Aid Options

It is the mark of an educated mind to be able to entertain a thought without accepting it. ~Aristotle


It should come as no surprise to learn the cost of higher education is a significant investment.  While the cost ranges significantly on the program, school, residency, and student qualifications, we will step you through the basics to understand how to best proceed given your unique situation.

To start, understand that there is an amazing amount of financial aid available to students.  The agencies involved in financial aid can range from state, local, government, and institutions around the United States.  Billions upon billions of dollars are made available to students and it is incumbent upon you to understand the process and make the most of the financial aid available.

How are Tuition and Financial Aid Related?

An interesting axiom to consider: the schools with the most expensive tuition often give the most financial aid.  That being the case, do not eliminate schools with higher tuition on the basis of cost alone as there may be several avenues to make things happen in your favor.

In most colleges, the admission department and financial aid department are not co-located in the same office thus decisions on each are often made independent of one another.  Since the admission decision from the school comes first, you need to be prepared to respond in kind whether to accept the offer or not based on the financial aid options.  While you are not in direct control of the admission process nor the financial aid process, you can increase your chances of both by investing your time in school and keeping your grades up.  The better your grades, the more favorable the financial aid package will be for your higher education.

How to Colleges Determine Financial Need?

Financial aid is often determined by need by an institution.  In order to ascertain financial aid for a student, most colleges and universities use a formula that looks like this:


What does this mean?  Simply put, this is the cost of attendance (COA) less your expected family contribution (EFC) to figure out student need (SN).  Since the cost of attending a college is determined by each school and part of their disclosures to each student, we will spend some time with the EFC.

How is the expected family contribution calculated?  The EFC is comprised of the amount of money your parents can pay from their income and assets plus your contributions from income and savings plus any contributions from a gift that does not have to be repaid.  Financial aid should be viewed as a partnership between financial aid providers and a student’s family.  If the means are available to pay for school, a student will have a diminished opportunity to receive aid while those who are qualified but lack the means will receive more aid, generally speaking.

What is the FAFSA and CSS?

In order to be considered for financial aid, a prospective student must complete a FAFSA.  A FAFSA stands for Free Application for Federal Student Aid and may be the only application required, depending on the college.  Since most schools have moved to digitizing the application process, you can hop online here and complete the form before the deadline.  The FAFSA form opens you to the opportunity to receive Pell Grants, Perkins Loans, Federal Direct Loans, Federal Work-Study, state-based grants, and the Federal Supplemental Educational Opportunity Grant program.  Some schools do require a financial aid form specific to the school be completed called the CSS (College Scholarship Service) through the College Board.

Regardless of which forms you need to submit to the college of your choosing, make sure to be diligent about following directions and specific with your responses.  Inaccurate information or missing data will likely have an adverse impact on the speed of processing your application and possibly the amount of aid you receive.  It may seem like a lot to digest but it is a necessary step in the process to determine what aid is available for your as you move into this exciting chapter of your life.  If you need assistance, your guidance counselor or the Federal Student Aid Information Center (800-4FED-AID) is available to help.

Different Types of Financial Aid

We will now turn our attention to the differing types of aid available so you have a working understanding of them going into the process.

Grants:  Grants are bases on need and do not require repayment from the recipient.  The source of the grant may be either the school, the federal government, or the state.  Grants are based on a student’s financial need and the FAFSA determines the eligibility.

Scholarships:  Like grants, scholarships do not need to be repaid; however, eligibility is based on merit, achievement, grades, and talents.  Check with the college or university to see what scholarships are available through the school then check in with your counselor to see what they have to offer.  Additional resources available on the internet include: FastWeb, Discover Scholarships, and Scholarships.com.

Work-Study:  Work-study is a type of aid that often is coupled with a grant or scholarship that allow a student to work and attend school concurrently to make money for school.  Many employers participate in a work-study to help local college students gain valuable work experience while providing on-site training to benefit the company.

Loans: Unlike the other types of aid mentioned above, a student loan must be repaid (usually with interest).  The types of loans vary from private loans to federal student loans to federal parent loans.  Most federal student loans are based on need (ie. Perkins Loan program) and more information about the types of loans can be found at here.  While not the first option for most students, loans may be a necessary way to bridge your EFC with grants, scholarships, and work-study programs.

Financial Aid Process

To help students best understand the financial aid process, we have created the following list to help visualize the process.  We will now move through the financial aid process step by step process to help ensure your success during the nascent period of your college tenure.

  1. Send in your admission application to any/all colleges prior to their prescribed deadlines.
  1. Invest a few minutes to obtain a rough idea of the cost of higher education by using the net price calculator the school provides on their website or through the Department of Education’s net price calculator tool. These valuable tools will give you a working understanding of what to expect before any formal communication is provided from the school(s) you are applying to will provide.
  1. Complete the FAFSA form before the deadline during your senior year and any other school-specific financial aid forms ahead of their prescribed deadlines. Being quick with your application to the college will help you understand your financial aid options, give you the opportunity to work with the financial aid department and secure your financial aid award(s).
  1. The college admission team meets in an effort to ascertain your fit with their program. During this phase, they may or may not reach out to clarify questions they have about your application.  Be prepared to accurately and professionally answer their questions.
  1. If accepted, the college financial aid office will let you know what, if any, aid will be provided students being offered admission to the school. Awards will then be provided to applicants given the thresholds of the college or university.
  1. Applicants will be notified by the admissions department and financial aid office of their respective aid package. Often this is performed in tandem with one another while other schools stagger the financial aid award package notification until a later date.

While this process seems straightforward, the anxiety while waiting can be a challenge.  Make sure to apply to a few colleges and stay well organized with details for each school in a respective folder for quick reference.  Based on the decisions from the admissions office, you may need to alter your plans and consider other schools or earn additional credits to successfully gain admission to the school of your choosing.  It may also be necessary to consider student loans to make things properly come together.  When doing so, make sure to consult your family and counselors to ensure you understand the costs and timeline to begin paying back the loans.  There are dozens of student loan portals but start with the US Department of Education’s Federal Student Aid website to get a great basis for what is available.

Additional Financial Aid Resources

For additional resources, make sure to visit our blog for the latest in college information and financial aid resources.  Publications such as the following examples may prove beneficial to students: Facts about the FAFSA, Common Reasons Why Students Fail to Apply for Financial AidFinding College Scholarships, Avoiding Scholarship Scams, and How College is Financed.