College costs have exploded over the past decade, increasing by a massive 33 percent from the 2004-2005 school year to 2014-15, according to the National Center for Education Statistics. For today’s average student, 70 percent of colleges are more expensive than they can afford. But while college is more expensive than ever, family incomes and college savings rates have not kept pace.
This leaves a huge gap between what college costs and what today’s students and their families can afford to pay. That’s why it’s crucial for families to apply for financial aid to help bridge the gap.
The process to apply for financial aid can be long and confusing. But successfully navigating it will net you as much money for college as possible to keep up with rising costs. Here’s everything you need to know to begin tackling this crucial process.
13 steps to help you apply for financial aid
Unfortunately, applying for financial aid for college is usually anything but easy. “The most challenging aspect of financial aid is how overwhelming it can seem,” said Fastweb contributing editor Kathryn Knight Randolph. The complexity of the process can keep many students and families from getting the college aid they need.
Still, the potential payoff of applying for financial aid makes it worth it. It can make a world of difference if you put in the time and effort to understand the process and how to get the full financial aid you’re entitled. For some students, it’s the only reason they can complete a degree rather than dropping out of college. For others, financial aid helps them leave school with some student loans — but limits the debt to a manageable amount.
For prospective students and their families, it will take time and effort to apply for financial aid for college. But if you follow the tips here, you can more quickly get a grasp of the process and understand how to make the most of your financial aid.
1. Start planning and learning now
Ideally, students and their families should start planning for college costs years in advance. “Students and their parents can educate themselves on the process before diving in,” Randolph said. Applying for aid can be a long and complicated process — the sooner you start learning about it the better.
“The college admissions process takes some students months – even years – to complete; it should be the same with financial aid,” Randolph said. Starting early will also give you time to plan and avoid costly mistakes. You’ll have plenty of time to apply for financial aid ahead of deadlines and employ strategies that can help you receive more aid.
But you won’t know what you can do to help yourself now unless you dedicate time to learn and work on your financial aid applications. “Research the process, apply, and then figure out which type of financial aid package is right for you through further research and seeking counsel,” Randolph said.
2. Talk to a financial aid expert
As you’re wrapping your head around the process involved for financial aid, it helps to know what resources are at your disposal.
One of the first places to start is with experts. “Ask for help – from high school guidance counselors, financial aid officers, and professionals in the community,” Randolph suggested.
High school guidance counselors and college aid officers are there to help students plan for a successful future and find financial aid. They provide individualized advice based on a student’s academic and financial situation. A counselor will also be aware of scholarships, financial aid, or tuition-assistance programs specific to a student’s school, community, or state.
3. Do your reading and research
There is a wealth of information available to students and parents on how to apply for financial aid. “There are so many free resources to help students and parents walk through the process – take advantage of those,” Randolph advised.
For instance, these awesome resources can help you started:
- The non-profit educational group Khan Academy offers “Paying for College,” a free online course with in-depth information on the financial aid process.
- The help section of the FAFSA.ed.gov site answers many tricky questions parents and students might have.
- The Financial Aid Shopping Sheet helps students quickly understand and compare financial aid offers from different colleges.
4. Always file a FAFSA
So where can you start learning about financial aid? With the Free Application for Federal Student Aid (FAFSA). You fill out the FAFSA at FAFSA.ed.gov to provide the information about you and your family’s financial circumstances. The federal government uses that information to determine how much student aid you need.
Completing a FAFSA can be a time-consuming process that some students or parents might be tempted to skip. “On one end of the spectrum, you have students that don’t think they qualify for aid so they don’t [apply],” Randolph said. “On the other end, you have students that are so confused by the application, verbiage, and choices, that they struggle, perhaps even to the point of not finishing the FAFSA.”
However, filling out a FAFSA is the only way college students can access all forms of federal financial aid, from Pell Grants to Direct Subsidized Loans. Thus, taking the time to file your FAFSA is a must. The video below is a great introduction to FAFSA and federal student aid in general.
5. Project and estimate your financial aid
You don’t have to wait until your FAFSA is filed and processed to get an idea of what kind of financial aid and assistance you can expect. You can use the FAFSA4caster tool on the official FAFSA site to project the amount of financial aid for which you’d be eligible.
It can also be helpful to understand how the Federal Student Aid Office uses the information on the FAFSA to decide how much aid each student gets. The financial details are used to calculate your Expected Family Contribution (EFC). This is the Federal Student Aid office’s estimate of what your family should reasonably be able to pay toward college costs, based on these factors:
- The family’s taxed and untaxed income, and benefits
- Financial assets, including college savings
- Family size
- Number of family members attending college concurrently
Generally, the FAFSA compares your EFC to the costs you’ll face in college — your cost of attendance — and offers financial aid to help bridge that gap. Here’s the general formula to illustrate:
Cost of attendance (COA) – EFC = Financial need
The higher your EFC, the less financial aid you will receive. Unfortunately, according to Randolph, “there isn’t too much a student can do to change their financial circumstances.” However, Randolph noted it is possible to “maximize aid eligibility” and lessen your EFC if you plan well in advance — find out how in this FastWeb guide.
6. File your FAFSA correctly
The information you provide on your FAFSA directly determines how much aid you can receive. So, “the best way to get the most out of the financial aid process is by providing the biggest, most accurate picture of your financial circumstances on the FAFSA,” Randolph said.
On top of simply filing a FAFSA, making sure you do it correctly will smooth the process and could even help you qualify for more aid. Randolph gave her tips for avoiding common FAFSA mistakes:
- Go through the FAFSA “slowly and don’t leave anything blank,” she said. “If the answer to a question is zero, or it doesn’t apply to you, write in ‘0’.”
- Make sure you get your family size right. Don’t forget to “include the student in the household size,” Randolph said. “Step-parents’ information must be on the form, too.”
- “The biggest mistake students make is actually forgetting to sign the form,” she added. “So sign the form!”
If this is the first time as a parent or student that you have filed a FAFSA, you might need some extra help — and it’s often out there. “Many communities will host free FAFSA workshop days, where professionals will help you through the application,” Randolph said.
Lastly, you should never lie or purposely misrepresent any information on the FAFSA. Not only can this jeopardize your chance of getting financial aid, it’s illegal.
7. Beat financial aid deadlines
FAFSA submissions open on Oct. 1 every year, and they remain open until the end of June a year and a half later. But you shouldn’t wait to file. “File [FAFSA] before the deadline, and if you can, file as soon after October 1 as possible,” Randolph advised.
But if you have a whole 21 months to submit a FAFSA, what’s the rush? Well, filing early can have a few benefits:
- Your FAFSA will be received and processed well before the school year when you will need it.
- Find out earlier what aid you qualify for. This can help you plan ahead, budget for college costs, and even compare colleges to choose the most affordable option.
- If there are any errors in your FAFSA, you’ll have time to correct or amend the application so you can receive the correct amount of aid.
- You could get more non-federal aid: “Schools and states have a limited amount of aid, and a bunch of states have a FAFSA deadline of ‘as soon as possible after October 1,’ (meaning they actually could run out of financial aid) so it’s good to be at the front of the line!” according to a post on the Department of Education blog. If you apply early, you’ll have a better chance to qualify for these non-federal financial aid programs.
8. Apply for state student aid programs
Another reason to submit a FAFSA early is that many state- and school-level aid programs rely on this information to assess need and grant assistance. “States also have individual deadlines for when the FAFSA must be submitted in order to be considered for state aid,” Randolph said. And these are often earlier than FAFSA deadlines.
You should also do your own legwork to find state-sponsored grant or scholarship programs. This State Financial Aid Programs locator tool from the National Association of Student Financial Aid Administrators (NASFAA) is a great place to start.
9. Seek out institutional aid
“Schools will offer students ‘merit aid,’ which is just a fancy term for scholarships,” Randolph said, as well as more need-based aid. This is the institutional aid offered by your specific college. Ask your college for a comprehensive list of the institutional aid it offers, including scholarships and grants.
If it’s unclear how to apply for each grant or scholarship, follow up and keep asking questions to understand which awards you could get. Persistence and initiative will pay off when it comes to getting financial aid from your school.
Check if your state or college needs additional paperwork or information from you. “Some colleges have a supplemental form that they require students and parents fill out for a bigger, better picture,” Randolph said. The most common form that colleges require is the CSS Profile, for example.
10. Treat applying for scholarships like a part-time job
“Students should make applying for scholarships a part-time job,” Randolph said. There are many college scholarships out there, and you might have a better chance at qualifying than you think.
While many are granted based on academic performance, not all are. Many simply have a minimum GPA requirement or have other eligibility considerations that can be relatively easy to meet.
Here are a few top scholarship search sites to get you started:
Because there are so many opportunities, you should “set a goal to apply to one or two scholarships a week,” Randolph said. “It’s a numbers game,” she said. The more scholarships students find and apply for, “the better their chance of winning.”
11. Prioritize free financial aid first
Once your FAFSA is completed, processed, and used to determine your financial need, you’ll get a financial aid award letter from the colleges to which you’ve applied. Each letter will outline the financial aid package you’ll receive at the school.
However, they often will not explain in detail what each type of federal financial aid is. You should do your own research to understand how each kind of financial aid works — whether it’s a gift with no financial obligation or a loan that you’ll have to repay. To help you, MyFICO has an excellent overview of different forms of financial aid.
Among the types of financial aid that take the form of gifts are:
- Grants: These are gift awards that can include Pell Grants from the federal government and Federal Supplemental Educational Opportunity Grants awarded by the college. “Students should prioritize merit aid [such as scholarships] and grants in their financial aid package,” Randolph said. “Neither of these have to be paid back.”
- Scholarships: These, too, are gifted awards to help cover college costs. Unlike grants, scholarships are usually offered by private entities and granted based on merit as well as need.
- Work-Study: “Work-study will require that you work a campus job,” Randolph said, “and you can either use the paycheck for personal expenses or put it toward your tuition bill. If you qualify for work-study, take that over any loans in your package.”
12. Then borrow strategically through student loans
Fully take advantage of the above financial aid. If you still have a gap between what this aid covers and your total costs, student loans can be an option to make up the difference.
Here are the types of loans you might see on a financial aid award letter, in order of which is best to prioritize in choosing the loan portion of your aid:
- Direct Subsidized Loans: These loans for undergraduate students are the best way to finance college costs. They carry low interest rates — 4.45% currently. And due to a student loan interest subsidy, interest charges on these loans are also partially paid for by the government.
- Direct Unsubsidized Loans: Unsubsidized loans have the same low rates as the subsidized loans, but the student borrower is responsible for paying all interest on these. Thus, borrowing through unsubsidized loans will cost you more.
- Direct Graduate Unsubsidized loans: These are unsubsidized loans available to graduate students, and they carry a higher interest rate of 6.00% for the 2017-18 school year.
- Grad PLUS loans: Also available to graduate students, Grad PLUS loans are some of the most expensive, with an interest rate of 7.00% and a loan fee of 4.276%.
- Parent PLUS loans: These carry the same high costs as Grad PLUS loans, but they can only be used by parents of dependent undergraduate students.
- Private student loans: Financing from private lenders might also be listed in your financial award letter, or you can find it on your own. Using federal student loans first is often the best move, Randolph said. However, “if you still need money to bridge the gap between financial aid and the cost of attendance, you’ll have to look at private student loans.”
Be smart and strategic about how you use student loans. Borrow only what you need to cover college costs after using all other aid. Project your future student loan payments, and start learning about different student loan options to understand what it will take to repay this debt after graduation.
13. Appeal for more financial aid
Even after you get your financial aid award letter, there still might be hope to get more aid. If you feel you did not receive enough funding, or it was less than you expected, you might consider appealing for more financial aid.
“You can call the school’s financial aid office and begin talks about a professional judgment case, which will enable the school to potentially offer you more financial aid based on your circumstance,” Randolph said.
You’ll need a good reason to appeal your financial aid. For instance, if your circumstances changed between when you received your financial aid package and the time school starts. Maybe your sibling decided to enroll in college at the last minute, your parent lost a job, or there’s been a family financial emergency. You might also be able to appeal for more financial aid if you’re in an abusive family situation.
Meet with your financial aid office as soon as possible, and come prepared with documentation of your new or unusual circumstances. In these cases, financial aid administrators can often adjust your financial need and find additional aid sources.
Apply for financial aid to afford college
Financial aid clears the path to a college degree and helps you minimize student loans to lessen your debt burden after graduation. It’s about more than just covering college costs. Applying for financial aid is at the heart of a sound foundation for a lifetime of healthy money management, income growth, and career development.
Whatever your family’s money situation, financial aid is there to help students surmount college costs. Following the steps above will point you to the best strategies and resources to help you apply for financial aid, qualify for more assistance, and receive all the help to which you’re entitled.
Need a student loan?Here are our top student loan lenders of 2019!
|1 Important Disclosures for Ascent.
Before taking out private student loans, you should explore and compare all financial aid alternatives, including grants, scholarships, and federal student loans and consider your future monthly payments and income. Applying with a cosigner may improve your chance of getting approved and could help you qualify for a lower interest rate. Ascent Student Loans may be funded by Richland State Bank (RSB). Ascent Student Loan products are subject to credit qualification, completion of a loan application, verification of application information and certification of loan amount by a participating school. Loan products may not be available in certain jurisdictions, and certain restrictions, limitations; and terms and conditions may apply. Ascent is a federally registered trademark of Turnstile Capital Management (TCM) and may be used by RSB under limited license. Richland State Bank is a federally registered service mark of Richland State Bank.
* Application times vary depending on the applicants ability to supply the necessary information for submission.
2 Important Disclosures for College Ave.
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
Information advertised valid as of 4/1/2019. Variable interest rates may increase after consummation.
3 Important Disclosures for Discover.
* The Sallie Mae partner referenced is not the creditor for these loans and is compensated by Sallie Mae for the referral of Smart Option Student Loan customers.
4 = Sallie Mae Disclaimer: Click here for important information. Terms, conditions and limitations apply.
5 Important Disclosures for SunTrust.
Before applying for a private student loan, SunTrust recommends comparing all financial aid alternatives including grants, scholarships, and both federal and private student loans. To view and compare the available features of SunTrust private student loans, visit https://www.suntrust.com/loans/student-loans/private.
Certain restrictions and limitations may apply. SunTrust Bank reserves the right to change or discontinue this loan program without notice. Availability of all loan programs is subject to approval under the SunTrust credit policy and other criteria and may not be available in certain jurisdictions.
SunTrust Bank, Member FDIC. ©2019 SunTrust Banks, Inc. SUNTRUST, the SunTrust logo and Custom Choice Loan are trademarks of SunTrust Banks, Inc. All rights reserved.
6 Important Disclosures for LendKey.
Additional terms and conditions apply. For more details see LendKey
7 Important Disclosures for CommonBond.
A government loan is made according to rules set by the U.S. Department of Education. Government loans have fixed interest rates, meaning that the interest rate on a government loan will never go up or down.
Government loans also permit borrowers in financial trouble to use certain options, such as income-based repayment, which may help some borrowers. Depending on the type of loan that you have, the government may discharge your loan if you die or become permanently disabled.
Depending on what type of government loan that you have, you may be eligible for loan forgiveness in exchange for performing certain types of public service. If you are an active-duty service member and you obtained your government loan before you were called to active duty, you are entitled to interest rate and repayment benefits for your loan.
A private student loan is not a government loan and is not regulated by the Department of Education. A private student loan is instead regulated like other consumer loans under both state and federal law and by the terms of the promissory note with your lender.
If your private student loan has a fixed interest rate, then that rate will never go up or down. If your private student loan has a variable interest rate, then that rate will vary depending on an index rate disclosed in your application. If the interest rate on the new private student loan is less than the interest rate on your government loans, your payments will be less if you refinance.
If you don’t pay a private student loan as agreed, the lender can refer your loan to a collection agency or sue you for the unpaid amount.
Remember also that like government loans, most private loans cannot be discharged if you file bankruptcy unless you can demonstrate that repayment of the loan would cause you an undue hardship. In most bankruptcy courts, proving undue hardship is very difficult for most borrowers.
8 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|4.24% – 13.24%1||Undergraduate and Graduate|
|4.07% – 11.32%2||Undergraduate, Graduate, and Parents|
|4.84% – 13.49%3||Undergraduate and Graduate|
|4.50% – 11.35%*,4||Undergraduate and Graduate|
|4.25% – 13.25%5||Undergraduate and Graduate|
|6.08% – 7.22%6||Undergraduate and Graduate|
|3.95% – 9.81%7||Undergraduate, Graduate, and Parents|
|4.45% – 12.42%8||Undergraduate, Graduate, and Parents|