Financial aid includes money from a variety of sources to help pay for college costs. While federal student aid is one of the most common types, students also look into other funding options from state programs, colleges, local communities, employers, and various organizations.
How Does Financial Aid Work?
Most students must take the action of applying for financial aid. There are common applications, like the Free Application for Federal Student Aid (FAFSA ®), which is how you apply for federal financial aid like Direct student loans and Pell Grants. And there are less common applications, that may be used for other aid, such as some scholarships, and some institutional and state aid.
Many consider the FAFSA to be the most important financial aid application to complete. The information you provide on the FAFSA will be used to determine your eligibility for not only federal aid, but also most state and institutional aid.
How to Apply for Financial Aid
- To apply for federal financial aid, always start with the FAFSA. In some cases, your school may require another form, such as the CSS Profile.
- To apply for state-based aid, such as state grants, you should start with the FAFSA as well. But keep in mind that some states have their own application process. Your school’s Financial Aid Office can provide further guidance, or you can go to your state’s education agency to find more information.
- To look for scholarships, the options are abundant. You can get scholarships from private donors or local community foundations or even your school. The application process will vary based on the entry requirements.
Each financial aid source will have its own application instructions, deadlines, and requirements. It’s always best to track deadlines so you don’t miss out on financial aid opportunities.
Do You Have to Pay Back Financial Aid?
It all depends on the type of financial aid.
If you are given scholarships or grants, there are certain scenarios where a scholarship or grant will need to be repaid. However, it's rare. Some scholarship or grants could be multi-year awards, but may have requirements for renewal, like maintaining a certain GPA, or continuing to participate on a sports team.
There are a few grant programs which could have certain requirements (like a work requirement while you are in your program, or after you graduate) that could convert to a loan if you fail to meet those requirements. A common example of this scenario would be a federal Teacher Education Assistance for College and Higher Education (TEACH) Grant, which includes a service obligation for the grant to remain “free” money. However, these types of opportunities should clearly explain the terms before you accept the money.
When it comes to student loans, these are classified as financial aid. Student loans (federal or private) will need to be paid back according to the terms and conditions of the promissory note—the contract you signed to accept the loan money.
And finally, earned aid doesn’t necessarily have to be paid back, but you need to take the steps to earn those funds. Earned aid programs are commonly referred to as work-study programs. These programs generally require you to pick an eligible work-study job, and work hours to earn a paycheck.
More >>> Do I Have to Pay Back Grants?
Types of Financial Aid
There are some common types of financial aid to help you pay for college. Let’s break those down.
Grants for College
Grants tend to be need-based awards. One of the most common federal grants is the Federal Pell Grant or FSEOG grant. Grants are known to be “free money” for college.
The most common application to complete in order to qualify for grant money is the FAFSA. But it’s always worth it to check out your state and school websites to see if there are any other applications you should complete.
Scholarships for College
Scholarships are also “free money” but generally are awarded for merit. Scholarship opportunities may be available at your school, and there are thousands of opportunities offered by private scholarship providers.
Finding and applying for scholarships can be a task, but it is completely worth it. It’s not uncommon for scholarship opportunities to require essays, interviews, or for you to meet certain eligibility requirements. There are many resources out there to help you find scholarships, including your school, local community, or easy scholarship drawing sites.
Student Loans for College
Student loans are not considered free money and need to be repaid according to the terms of the loan. There are federal and private student loan options to help pay for college.
Federal student loans require you to complete the FAFSA. Private student loans require you to find a lender you want to work with, then complete an application with that lender.
Work-study
Work-study is an opportunity for a student to earn their financial aid. It will require a student to work an eligible part-time job on or off campus. Federal Work-Study requires you to complete the FAFSA. Your school may have their own work-study opportunities available, and you’d have to ask them how to qualify.
These programs are a bit different than your normal “part-time” job because they are offered as part of the financial aid package from the school, and any money earned from work-study will not count as income on next year’s FAFSA.
Financial Aid Applications
The most common, and arguably the most important financial aid application, is the FAFSA. This is the application you file for federal financial aid, such as subsidized and unsubsidized Direct Student Loans, and PLUS Loans. It’s not only the application for federal student aid, but it is the primary one used by states and schools to offer financial aid to students.
FAFSA
There are two ways you can file the FAFSA: Online, or by completing a paper application. The online version offers a more customized experience because it will only present questions which apply to you (based on your answers to previous questions and system logic), making the FAFSA far less intimidating than people expect it to be.
The paper FAFSA takes longer to process as it must be mailed and processed by hand. Whenever possible, we recommend using one of the electronic methods to file the FAFSA.
Check out our FAFSA Guide to help you through the application.
FAFSA Deadline
There are three FAFSA deadlines you should be aware of.
- State Deadline
- School Deadline
- Federal Deadline
The most important deadline is whichever comes first! To find your state deadline, check out our FAFSA deadlines page. NOTE: Typically the FAFSA is released every October 1 for the following fall. However, the 2024-2025 FAFSA and the 2025-2026 FAFSA releases have faced delays. The 2025-2026 FAFSA officially went live for all applicants in late November 2024.
CSS Profile™
The CSS Profile is a financial aid application which only needs to be completed if the school you are attending (or a school you’re applying to) requests you to complete it. The CSS Profile is provided by the College Board. Many consider the CSS Profile to ask for more in-depth financial information from students and their families than the FAFSA.
The CSS Profile is not a free application. The initial application costs $25, and each additional report is $16. Students may be eligible for a fee waiver if certain criteria are met.
If your school does require you to complete a CSS Profile to receive institutional aid, it’s highly recommended that you complete it. You don’t want to miss out on potential financial aid opportunities offered through your school.
CSS Profile Deadline
The CSS Profile is released every October 1, just like the FAFSA. However, deadlines for completion are set by each school. Another reason to familiarize yourself with your school’s financial aid website.
Other Sources of Financial Aid for College
Beyond the FAFSA and CSS Profile, you may be eligible to receive financial aid from other sources.
Employer Tuition Reimbursement
It’s becoming more and more common for employers to offer tuition assistance to their employees. These programs help them recruit and maintain talented people. It can be an enticing part of an offer package. If you are currently working you may want to see if your employer will offer you any assistance with your college costs. If you are having trouble finding any information, set up some time with your supervisor or HR to see your options. They may be willing to offer employer tuition assistance based on request, and you may not be aware until you ask.
Parents, you may want to double-check to see if your employer offers any assistance which can transfer to your child.
Military Benefits for College
There are many benefits offered to military members and their dependents. From programs like the GI Bill to the Post-9/11 GI Bill, to thousands of private scholarship opportunities. In addition, ROTC programs are also used by students to help pay for college.
- Army ROTC
- Air Force ROTC
- Navy ROTC and Navy ROTC with Marine Option
There are even opportunities offered by military branches that will provide student loan repayment benefits to those who enlist in certain career fields. For example, the Army offers generous student loan repayment benefits to those who serve in the Army’s medical team the AMEDD.
For help finding military benefits, we recommend you check out TodaysMilitary.com, brought to you by the United Stated Department of Defense.
Foster Care College Tuition
Education Training Vouchers (ETVs) are available to help students who have aged out of foster care to pay for college. You will need to determine if your state participates or offers ETVs or other types of assistance to help you pay for college. Foster Care to Success has provided a list of ETVs, state programs, and scholarship opportunities for foster care students.
How Do I Apply for State Financial Aid?
Some states only require you to complete the FAFSA. While other states may also ask for separate applications for certain grant opportunities. Do some online research, look at your state’s department of education (or equivalent) website. State grants can be dependent on the FAFSA or an additional application. To get started on your research, look up the grants available in your state.
State Residency Requirements
If you plan to attend a public college or university, you may notice that your school offers lower tuition for state residents.
Schools will ask you to verify your state residency to qualify you for a lower tuition rate. State residency requirements will vary between state. If you’re a dependent student, you may be required to demonstrate your custodial parent is a state resident to qualify for in-state tuition.
Institutional Applications for Student Financial Aid
Many schools rely on information from the FAFSA and/or CSS Profile. However, you want to confirm with your school if there are any other forms you need to complete. Some schools may have additional applications for certain scholarship opportunities.
Cost of Attendance
Cost of attendance (COA) is the estimated cost to attend a college/university for one academic year, and it will include costs beyond tuition and fees. The COA for your program is determined by the school and will be used in determining your eligibility for financial aid. Some schools refer to this as a Student Budget.
The COA is rather important if you are relying on financial aid. Your school will use your cost of attendance, in combination with your Expected Family Contribution, to determine your financial aid package. You school will only offer you financial aid up to your cost of attendance.
What is Cost of Attendance
Cost of attendance (COA) is the total amount of your college costs for a single year. This goes beyond tuition and fees, and may include living expenses and other allowances. The COA is determined by the school. Schools may have multiple costs of attendance. For example, there could be a cost of attendance based on students living on campus, and another for living off campus. Your school would know the costs to live on campus, but for a student living off-campus they’ll determine an average based on estimated rental costs around the school. Another common example is seeing different costs of attendance based on in-state vs. out-of-state residency status, as most schools offer different tuition rates based on state residency.
Common charges included in the cost of attendance:
- Books, course materials, supplies, and equipment
- Cost of housing and food (living expenses)
- Transportation expenses
Other charges you may see included in a cost of attendance:
- Dependent care
- Study-abroad expenses
- Disability-related expenses
- Federal Loan fees
- Costs of obtaining professional licensure or certification
What is the Actual Cost of College?
The actual cost of college is based on averages or estimates. Some costs are set, like tuition and fees. But other costs can be discretionary, for example the estimated cost of books may be more than you will need to spend because you plan on renting instead of buying textbooks.
There could also be situations where your costs could be higher than your cost of attendance. For example, your program may require you to have certain supplies which exceeds the amount outlined in your cost of attendance. If this happens, and you are being restricted financial aid funds, you can ask your school if they are willing to increase your cost of attendance to accommodate your unique situation.
What does my FAFSA SAI number mean?
When it comes to awarding need-based aid, your school will take your cost of attendance and subtract your SAI to determine your financial need. The school will use your SAI and financial need to determine what types of financial aid you are eligible for under the federal student aid and state programs. If your school solely relies on the FAFSA, then they will also determine your institutional aid based on the information provided in your FAFSA. However, if they use other financial aid forms (for example, the CSS Profile), they may take into consideration the information provided on those forms before packaging you with need-based institutional aid. There is no requirement for schools to meet your financial need. It’s not uncommon for students to receive a financial aid package and have an amount due in excess of their SAI.
Your SAI is not used to determine your non-need-based aid. Even students with a high SAI will likely see unsubsidized federal student loans offered in their financial aid package.
Why is my SAI so high?
The purpose of the SAI is to determine your family’s ability to pay for college. There could be a few reasons why your SAI is high. It could be that your household income is high, or your family has a high net worth of reportable assets. If you or your family believe your SAI is way too high, you’re not alone. That is one of the most common concerns about the SAI.
There could also be a chance that you completed the FAFSA incorrectly. If your federal tax information transferred from the IRS, it’ll be difficult for you to identify any issues on your FAFSA Submission Summary from your FAFSA filing.
If you are concerned with your resulting financial aid package, and you think your SAI is an inaccurate reflection of your financial situation, it’s time to make an appointment with your financial aid advisor.
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