When you open your college acceptance letter and see the word congratulations, you’ll likely feel the rush of excitement. Though, figuring out how you and your family are going to pay for college can put a damper on the celebration. Even if you have a job and a college fund, you still might not have enough money for college. This is where financial aid comes in. Financial aid is money for college that isn't from your parents, income, or savings. Test your knowledge with these financial trivia questions and answers.
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What is financial aid?
Financial aid is money that is given or lent to students in order to help pay for their post-secondary education. Some aid is "need-based," which means colleges award it solely based on you and your family's ability to pay for college. Other aid is "merit-based," which means colleges award it based on academic achievement and other accomplishments or talents. Financial aid can come from the federal government or private sources. There are four types of financial aid– student loans, scholarships, grants, and work-study.
What are the types of financial aid?
Student loans allow you to borrow money to pay for your college. These loans reduce your total college bill, but you will eventually need to pay them back with interest. You or your parents can receive certain federal student loans from the United States Department of Education if you choose. There are also loans available through private lenders. After considering the interest rates and other conditions, you will have to decide between federal loans, private loans, or a mix of both.
Scholarships are a type of gift aid. Gift aid means that you won’t have to pay any of the money back. Scholarships are a great way to pay for college expenses. You can apply for academic, athletic, and weird scholarships to ease the financial burden. Private scholarships are primarily based on financial need, leadership, major, and other specific criteria.
Grants can also help you pay for college. Grants do not have to be repaid, so they are very desirable. Typically, grants are rewarded based on financial need. One example is the Federal Pell Grant. This grant is awarded to students who demonstrate an extreme need based on their financial situation.
Work-study is the fourth type of financial aid. A work-study is a part time job that is typically on campus. Common work-study jobs are being a resident assistant, tutoring, or being an attendant at the fitness center or library. With a work-study, you can receive wages for personal use or have your paycheck put towards your tuition.
How do I check if I qualify for aid?
If you are worried about being able to qualify for financial aid, check out CollegeData’s Financial Aid Tracker to see how you compare to other students. This tool allows you to view the financial aid packages of students at the same college as you. Comparing potential financial aid award packages can help you and your family understand how much aid you may receive and how much you may end up paying out of pocket.
How do I apply for financial aid?
Before you apply for aid, you need to apply for admission at the colleges you want to attend. The school’s financial aid office won’t be able to help you until you’re admitted. Then, fill out the FAFSA (Free Application for Federal Student Aid) to see if you are eligible for federal financial aid. Once your FAFSA is processed, the school’s financial aid office will be able to award your financial aid package.
When can I apply for aid?
Generally, the FAFSA opens on October 1st for the upcoming school year. In order to maximize the amount of money you’ll receive, plan to complete your FAFSA application as soon as possible. Submitting your application early is important because most colleges award their financial aid on a first-come, first-served basis. Carefully proofread your application to ensure it’s free from common FAFSA mistakes.
Overall, paying for college doesn’t have to be scary. You can apply for financial aid– scholarships, grants, loans, and work-study– to lessen the costs of higher education. Taking a FAFSA quiz can help you develop a better understanding of financial aid before you go to college. This can positively affect your personal finances in high school and beyond. From there, you’ll be prepared to expand your financial literacy to credit cards, retirement funds, and more.
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