Financial Aid

Unless you’ve got a trust fund, a suitcase full of cash or won the lottery, you’re going to need someone to help you pay for the incredibly steep price of getting your higher education. And that someone, may not be a singular person (it could be in some cases!), but is more likely to be Uncle Sam and/or organizations that have programs in place to assist willing and inclined students in paying for some or all of their tuition. The assistance takes many different forms, from merit-based scholarships, grants that don’t need to be paid back or federal loans that do.

While this topic is rather extensive, and we’ll be discussing quite a bit, it is by no means comprehensive. There’s just so much information out there – my objective is to get you started and for you to take it from there.

The first, and most important step, is to fill out the FAFSA form. I’ve got a whole article dedicated to this topic, so I won’t go deep into it here. The form provides vital information on how much aid your eligible for, depending on multiple factors including expected family contribution (your income/parent income), cost of the school you’re attending, enrollment status and much more. The financial aid comes in many forms like grants and federal loans. It’s the best place to start to figure out exactly what you can get, without having to find your own aid. Since we’re focused on NOT taking on debt (federal or private student loans), this is a good place to see how many grants you’re eligible for, since you don’t have to pay grants back.

Financial Aid comes in several forms:

I’ve crossed out Federal and Private Student Loans because those are not what we’re going for here – we’re not shooting for anything that has to be paid back.

Grants

Grants are a wonderful contribution to your financial aid package – generally, they don’t have to be paid back. They can come from various sources, such as the federal government, state government, university, as well as private and/or non-profit organizations. They are typically awarded based on financial need and generally dependent on the income amounts provided in the Expected Family Contribution section of the FAFSA submission.

Work-Study Programs

The Federal Work-Study Program provides students with part-time employment during the school year. It’s reserved for part-time and full-time undergraduate and graduate students with financial need, allowing them to work in community service or jobs related to their coursework. Work can be either on-campus or off-campus and eligible students can be paid directly or elect for the school to use the money to pay for educational expenses such as tuition, room-and-board, food and/or school fees. This is an excellent way for eligible students to pay their way through school, and avoid incurring any post-graduation debt.

Federal Student Loans

Federal Student Loans are money provided by the federal government, that need to be paid back with interest. The borrowed money is dispersed to the school for education related payments, and any unused residual amount is given to the student to be used at his/her discretion.

Types of Federal Loans

Even though they’re on the menu, we don’t want these. They require repayment, with interest – therefore, we don’t want to consider any options in this category.

Scholarships

Scholarships are gifts – free money! They don’t need to be paid back. According to Think Impact, there are over 1.7 million private scholarships, with a combined worth of over $7.1 billion. In 2016 alone, a total of $1.6 billion was awarded to 1.5 million recipients. This just goes to show that there’s a big well for you to start dropping your bucket into. Perhaps the hardest part, is knowing where to look. And that’s exactly what I’m trying to demystify in my Scholarships article.

Other Government Agencies

The office of Federal Student Aid, a branch of the Department of Education, is at the forefront of providing college students with financial aid. According to their website, they provide more than $100 billion in financial aid every year, in the form of grants, loans and work-study programs.

State Agencies

Just like the federal government provides financial aid, state governments also provide tuition assistance – many of the same options that are available at the federal level, are also available at the state level. Many states offer scholarships, grants, work-study opportunities, loans and various other forms of tuition assistance.

The best place to start is by looking up what financial aid programs and opportunities your state offers, online. Once you find your state’s financial aid office online, call their number and talk to someone about what opportunities are available to you. You can also speak to a college advisor at the local high school or university – they should be aware of financial aid programs at the state level and how to access them.

Your University/College

The University or College you’re looking to attend, or currently attending, is one of the best places to start looking for scholarships or available programs. They’ve already got the connections set up and know exactly how the process works for that particular institution, in addition to the fact that they’ve probably done it a few times before for other students. Start with the Financial Aid Office at your school and they should be able to lead you to the right person(s) that can help you find personalized financial aid resources without having to take out loans, or get into debt.

Non-Profit Organizations

There are hundreds of thousands of non-profit organizations across the country that have set aside large amounts of money for scholarship funds, with the intent of providing tuition assistance to aspiring college students that take part in activities and exhibit qualities that support their cause.

The best place to start looking is online – look for non-profit scholarships. Since a majority of these college funds are intended to fulfill a community service agenda, start with local organizations first – you’re already a part of the community and they’re more likely to grant you an award over someone in another district or state.

Once you’ve worked through the local organizations, move to the state level, and then to federal. Of course, as you go higher and move outward, you’re going to encounter more work, greater competition and longer wait times. But with that risk, also comes greater reward – the awards tend to become bigger as you compete with more people.

Private Organizations

Private organizations typically provide two forms of education assistance: scholarships and loans. We’ll talk about private loans next. Private Scholarships are usually given out by large companies that are looking to advance their mission, whether it’s scientific research, technology, art, theater, music, gaming, sports, etc. Award recipients are usually students that are looking to pursue further studies in that subject matter or, in some cases, simply take an active interest in that topic.

Private Student Loans

Just like with Federal Student Loans, even though they’re on the menu, we don’t want these. Usually, it’s banks or credit unions providing these loans, with specific terms that are generally less affordable and flexible than federal loans. And, since they require repayment, with interest, we don’t want to consider any options in this category.

In fact, we definitely don’t want these. Interest rates on private loans are typically much higher than interest charged on federal loans. For example, federal loans can have interest rates between 3-6%, while private loans can have interest rates of 6-15%. That could mean payments of $300-$1000 per month. With rates that high, you could even see your student loan payments being higher than your rent or mortgage! That’s not a bill you want to get stuck with after graduation.