Financial Aid refers to a variety of programs that families use to pay for college. Many families are aware that Financial Aid exists but they know very little about it. To get families started, here are 5 things you need to know.
Financial Aid Fact 1: There are 4 different types of financial aid
- Need Based Aid: This consists of grants, low-cost loans which don’t accrue interest while in college and work-study programs which are awarded based on a student and families financial need. These programs are usually funded by the federal and state government.
- Non-Need Based Aid: These are scholarships and grants from private entities awarded on a variety of factors including course of study, student activities, athletics or other affiliations like family background.
- Merit Aid: Scholarships provided by colleges and universities based on academic performance, test scores or other attributes.
- Self-Help Aid: Low cost student loans that accrue interest while in college from the federal government, private loans from banks and credit unions or on and off campus jobs.
Financial Aid Fact 2: More people qualify than you think
At public colleges and universities over 60% of students are on some form of student financial aid. That increases to 75% at private colleges and universities. All families should take the time to apply to see what they might qualify for.
Financial Aid Fact 3: Deadlines
You do have to apply to receive student financial aid. The main application form is the Free Application for Federal Student Aid (FAFSA) which is available in January for the upcoming year and should be completed by March 15 if you want to be considered for a broad array of programs.Your school may also require the CSS Profile form. Be sure to check with the college’s financial aid and admissions office. Scholarships have deadlines so make sure you check when you get the application and note the due date on your calendar.
Financial Aid Fact 4: Student Loans will not ruin your life
Every day you read about a student who cannot make their student loan payments. You might have read that the average student has $27,000 in debt. As a result you may think you should completely avoid student loans. The truth is that the median student loan debt is only $13,000 and there are a variety of federal programs that will help you keep your payments low after you graduate.
Financial Aid Fact 5: Financial Aid can help make even the most expensive college affordable
Some families might think that because they haven’t saved for college they should only look at low cost college options. That is not necessarily the case. If you apply for financial aid on time, look to the multiple scholarship opportunities available and use student loans wisely you can find a way to afford the college of your child’s dreams. Apply and receive your financial aid award letter from colleges and universities you apply to, then make the best financial and academic decision for your family.
About the Author:
Today’s guest article comes from Craig P Anderson, who has been working in the Higher Education Finance Industry for over 20 years. He is a Student Loan Expert and has worked for a variety of student loan providers including Chase and Sallie Mae. He also worked in the Financial Aid Offices of the University of Florida and St. Petersburg College and has served on several industry boards. You can read more from him at www.CommonSenseStudentLoans.
