Note that the government has paused all repayment on federally held student loans through the end of 2022, with no interest to be charged during that period and no loans to be held delinquent or in default.
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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.
If you’re wondering how to apply for financial aid smartly and efficiently, commit to financial planning, talking to experts, applying for federal and state aid and searching for private scholarships. These and other strategies listed below could help you secure the funds you need.
- Start planning now
- Focus on your FAFSA
- Forecast your financial aid
- File your FAFSA correctly
- Beat application deadlines
- Apply for state, school aid programs
- Treat applying for scholarships like a job
- Prioritize free financial aid first
- Borrow student loans strategically
- Negotiate your school’s aid offer
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,” said Fastweb contributing editor Kathryn Knight Randolph. “The college admissions process takes some students months — even years — to complete; it should be the same with financial aid.”
Starting early could 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.
“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.
Reach out to experts and utilize online resources
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. High school guidance counselors and college financial 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.
There is also a wealth of online information available to students and parents on how to apply for financial aid. For instance, you could get started with…
- The help section of the FAFSA.ed.gov site, which answers many tricky questions parents and students might have.
- The College Financing Plan from the U.S. Department of Education, which helps students quickly understand and compare financial aid offers from different colleges.
So where can you start learning about federal and other kinds of financial aid? With the Free Application for Federal Student Aid (FAFSA). You fill out the FAFSA at StudentAid.gov to provide the information about you and your family’s financial circumstances, and 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. 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.
What do you need to file your FAFSA? Find out here.
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 to project the amount of financial aid for which you’d be eligible.
It can also be helpful to understand how the Department of Education’s office of Federal Student Aid 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 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
You can use free online tools like the College Board’s to estimate your EFC.
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.
The information you provide on your FAFSA directly determines how much aid you can receive, so according to Randolph, “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.”
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. Making FAFSA corrections can take time.
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. “Stepparents’ 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.
FAFSA submission periods 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 said.
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: If you apply early, you’ll have a better chance to qualify for non-federal financial aid programs, such as for school-based funding or state grants.
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.
|Need-based aid||Merit aid|
|As noted above, your EFC will help to determine your eligibility for need-based aid, or assistance that’s awarded depending on your income level or financial situation. In addition to the federal government, your state and your school could be sources of need-based aid.
Check if your state or college needs additional paperwork or information from you. One common form that nearly 250 colleges require is the CSS Profile, for example. And in cases where you’re seeking need-based aid from your state, it could have its own local version of the FAFSA that needs to be completed.
|As well as more need-based aid, according to Randolph, “schools will also offer students ‘merit aid,’ which is just a fancy term for scholarships.” This is institutional aid offered by your specific college; ask your college financial aid office 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 could pay off when it comes to getting financial aid from your school.
“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,” and the more scholarships students find and apply for, “the better their chance of winning,” she added.
|Read up on scholarships for…|
Once your FAFSA is completed, processed and used to determine your financial need, you’ll get a financial aid award letter from the colleges you applied to. Each letter outlines the financial aid package you’ll receive if you accept their offer of admission.
However, they don’t often 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.
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 (FSEOG) 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.”
And if you’re considering attending one of multiple schools, use our financial aid award comparison tool to see which college or university offers the best package.
For some students, financial aid is 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.
If you still have a gap between financial aid and the total cost of attending college, student loans can be an option to make up the difference.
Listed below are the types of loans you might see on a financial aid award letter. It’s generally best to prioritize the loans listed first (all listed interest rates are for loans disbursed after July 1, 2021 and before July 1, 2022):
|1. Direct Subsidized Loans||These loans for undergraduate students are the best way to finance college costs. They carry low interest rates. And due to a student loan interest subsidy, interest charges on these loans are also partially paid for by the government.||3.73%|
|2. 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.||3.73%|
|3. Direct Graduate Unsubsidized loans||These are unsubsidized loans available to graduate students, and they carry a higher interest rate.||5.28%|
|4. Grad PLUS Loans||Also available to graduate students, Grad PLUS Loans are some of the most expensive, especially considering their origination fee, and should be compared with private loan options.||6.28%|
|5. 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.||6.28%|
|6. 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.”||Varies by lender|
Be smart and strategic about how you use student loans. Borrow only what you need to cover college costs after using all other 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. Most schools have their own appeal processes.
“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. However, nearly all schools require you to write a formal appeal in letter or email form.
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, one of your parents 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.
In these cases, financial aid administrators can often adjust your financial needs and find additional aid sources.
Andrew Pentis and Maya Dollarhide contributed to this report.