Financial Aid

Usually, when people hear the term “financial aid” they think “federal government,” and that’s for a good reason—it’s the first place you should look. And while the whole process might seem intimidating, remember that millions of families successfully apply for financial aid each year.

Start Early

You stand the best chance of getting federal financial aid if you start early, when you first start applying to colleges. We recommend applying after your family fills out their taxes for the previous year.

Your first stop in federal financial aid should be filling out the Free Application for Federal Student Aid form (FAFSA); their site is in our Related Links section to the right. The site even offers the FAFSA4caster^SM to give you a quick idea of your eligibility for financial aid and grants, plus it reduces the actual application time. Even if you’re dead positive you won’t qualify, fill it out anyway. You might be pleasantly surprised at the results, and it will make it easier for you to apply for other aid.

Remember, the application isn’t a simple one and that any mistake could cost you – big time. So, support your parents any way you can through the application process.

Where to Look

After applying for the FAFSA, don’t stop there. You’ve got plenty of other options out there for financial aid.

• Colleges– Many schools will ask you to fill out a college scholarship service (CSS) profile. Don’t forget to speak to each school’s financial aid department to see what they offer.
   
• Scholarships – Whether you’re a brain, a jock, or somewhere in between, there are plenty of scholarships out there for the taking. Visit your guidance counselor to discuss your choices, or visit the NCAA site if you’re an athlete. There are other great places to look for scholarships:
  
  • State and local government
  • The military
  • Unions and professional organizations
  • Civic and veterans groups
  • Religious and ethnic organizations
  • Organizations related to your prospective career

Keep in mind that the best help is free. There are plenty of companies out there that offer to help you find financial aid – at a price. Don’t fall for it. Why bother, when there are dozens of organizations and sites that will help you for free?

The Bottom Line

After you’ve been accepted to your colleges of choice (Congratulations!) and have your financial aid offers nailed down, the hard part is only halfway over. Now, you need to sit down and determine what choice is best for you.

Put it all down on paper or a spreadsheet on your computer and do the math. What award letters did you get and from what colleges? What’s the actual cost of the school, including room and board? Did you get scholarships, grants, tuition discounts or loans? A scholarship or grant is better than any loan. And if you have to use a loan, a subsidized loan is the way to go—they pay the interest for you as long as you’re in school. Use this award letter calculator to help you decide.

Any Gaps?

So, you’ve picked a college, crunched the numbers and you still end up a little short. There are a few ways to fill in the gaps:

• PLUS Program – Parents’ Loans for Undergraduate Students offers loans with a 9% cap and parents can borrow up to the complete cost of the college. Repayment usually starts 90 days after the money is disbursed.
   
• Loans – This might be the time for your folks to tap into their home equity loans or take a loan from their retirement accounts. Stop by your credit union to see what options you and your parents have.
   
• Save Now! – It’s never too late to start saving. Money your family puts away today could come in handy throughout your college years. Use our savings calculator to see what impact you could make if you start saving now. 

Don’t Forget

All of this detective work for scholarships and filling out forms is worth it in the end. Remember, a college degree is a solid investment in your future. Just don’t forget to remind your parents of that as they trudge through all the paperwork!