| Academic Timeline | Applying to College | Paying for College | Preparing for College |
Types of Financial Aid
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- Grants and Scholarships provide money that does not need to be repaid.
- Loans let you borrow money that you must pay back over a certain period of time, usually with interest.
- Work-Study Programs require you to work to earn a certain amount of money per year so that you can have money to use for your own expenses.
Grants and Scholarships
Grants and Scholarships give you money to help you pay for college that you do not need to repay. Grants are given by the federal or state government or by the university itself. Their amount is based on students' financial need. Grants generally come from three main sources:
Colleges can award grant money directly to students. These funds may originally come from the federal government (such as the Federal Supplemental Educational Opportunity Grant [FSEOG]) and then is awarded to you by the college. Colleges may also offer money that does not come from the government to qualified students.
The Federal Government administers some grants, such as the Federal Pell Grant. You become eligible for these by filing a Free Application for Federal Student Aid (FAFSA) during your senior year in high school and indicating your interest in the specific grant.
State Governments may offer grants to students who are residents of the state and who will be attending state universities.
Scholarships are similar to grants but may be based on different criteria, such as financial need, academic record, geographic location or athletic ability. Organizations of many different kinds offer scholarships, and each determines the criteria you must meet to be eligible.
Colleges: Often when you submit a college's application for financial aid, you are automatically considered for scholarships offered by that university. Check with the admissions officer at each school where you submit an application to make sure you are being considered for scholarships.
Private Sources: Some community organizations, foundations and private companies offer scholarships to college students who meet certain conditions. The amount of these scholarships vary. They can be offered by businesses like pharmaceutical firms, as well as community groups like the Lion's Club or sororities. It is wise to apply for local scholarships that take an interest in specific students. These organizations' scholarship applications vary considerably. Contact the organization offering the scholarship for specific information. If you receive any private scholarships, be sure to talk with the financial aid office of the college you plan to attend to see if accepting the scholarships will change the amount of money the college offers you.
Federal Government: There are many sources of scholarship funds that are controlled by the federal government. Some of the most common are:
- Government Agencies, such as the National Institutes of Health (NIH), the Indian Health Services (IHS) and NASA offer scholarships to individuals who meet certain criteria. A scholarship search should turn up government agency scholarships for which you are qualified.
- ROTC: The United States military has money to help finance students who plan on entering the military and are involved in ROTC during their college years.
- National Merit Scholarships: The federal government awards a limited number of National Merit Scholarship Corporation to entering college freshmen. When you take the PSAT during your junior year in high school, you are automatically considered for one of these awards. They are given based on your grades and PSAT scores as well as an application form that is mailed to you if you qualify as a semi-finalist.
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Loans
Loans are funds that are awarded on a yearly basis and are expected to be paid back after you have completed your education.
Terms
- Principal: The amount of money that you borrow when you take out a loan.
- Interest: A percentage of the amount you owe that is calculated at given intervals and added to what you owe. The percentage – called the interest rate – is set when you obtain the loan. When you take out a loan, you pay back more than you initially borrowed: You pay back the principal plus interest.
Sources of Loans
There are a variety of sources of loans. Many loans are funds from the federal government that are distributed by the individual college financial aid offices. Also, there are private sources such as banks that grant educational loans.
Applying for Loans
In general, as a first-time college student, you will not apply for loans directly. Instead, after you apply for financial aid, the financial aid office of the college where you have applied will assign loans to you as a part of your financial aid package. Since you need to pay loans back with interest, you want to try to take out as few loans as possible and try to get as many scholarships and grants as you can.
Repaying Your Loans
The amount of interest you pay on your loans varies depending on the source of the loans; the interest rate is usually lower on federal loans than it is on private loans. You want to try to get loans with the lowest interest rate as possible. You choose a payment plan that will determine an amount you will pay monthly over a specific period of time, such as 10 or 20 years. However, the longer the repayment time period you choose, the more interest you will have to pay and the larger the amount of money you will ultimately pay back.
Work Study
Work Study is a program that has students work to help pay for their college educations. Their salaries are partially subsidized by the government. Work study is awarded as a part of your financial aid package. In this program, you must work in a department at your college for a certain number of hours to help pay your college costs, and the government pays a portion of your salary.
Finding a Job: If you receive work study, it is a very good opportunity for you to look for a job in an area that interests you. You might want to take an easier job for your first semester in college. While you are working there, you can look for a job related to a career or academic pursuit that interests you (such as a job in the campus medical center or in a research lab). Be sure to mention that you have work study when you are looking for a job. Faculty and employees like to hire work-study students because they benefit from your great skills and they only have to pay a part of your salary.
Important Note: Anyone can hold a job while in college, whether or not he or she has work study. The difference is that if you are not on work study, your employer at college or elsewhere must pay your entire salary and there is no subsidy from the government.
Applying for Financial Aid
General Tips
- Begin collecting the forms you need from the different sources to which you will be applying as soon as possible. These sources may include colleges, the federal government (which gives the FAFSA) and private scholarships.
- Submit financial aid applications as early as possible. Do not wait until you have been accepted to college to begin applying for financial aid. Apply for financial aid at every college you have sent an application, even if you do not yet know if you have been accepted. You should send in your Free Application for Federal Student Aid (FAFSA) as soon after the initial acceptance date of Jan. 1 as possible during your senior year of high school.
- Keep a list of the information you need to collect for each application, like tax information, transcripts and essays. Make a separate folder for each application and list the due dates for each application.
- Tell your parents/guardians that you need information about their income and taxes to complete your financial aid applications. Ask if they can do their taxes before your financial aid applications are due because you usually cannot complete financial aid applications without their tax information. If you fill out your own tax return, you should start early as well.
- If your parents/guardians do not support you financially, talk with a financial aid officer at the colleges to which you are applying to see how you should fill out your financial aid forms.
Common Types of Financial Aid
These are some of the types of financial aid applications you will come across as you apply for financial aid. The FinAid web site (www.finaid.org) has additional information about them.
Free Application for Federal Student Aid: FAFSA
One of the most important financial aid forms everyone needs to complete is the FAFSA. You can find more information about this form on the FAFSA web site.
College Scholarship Service Profile: CSS Profile
Another form schools may want you to fill out is the CSS Profile, which includes more detail than the FAFSA. Not all schools ask for the CSS Profile, and there is a fee for submitting it, so be sure the colleges to which you are applying require the CSS Profile before you submit it. You can find information about the CSS Profile on the College Board Web Site.
University Financial Aid Applications
Most colleges have their own applications for financial aid that you will need to complete (in addition to the FAFSA and possibly the CSS Profile). When you request an application for admission to each college, also request a financial aid application from the financial aid office. There are links to university financial aid offices on the FinAid Web site.
Applications for Private Scholarships/Financial Aid
When you apply for scholarships from private sources that you have found by doing a scholarship search or from researching on your own, you need to complete a separate application sent to you by the organization awarding the scholarship. Each organization has a different process that may call for extra essays or interviews. Check with the organizations administering the scholarships that interest you.
Financial Aid Resources
There are plenty of ways to get aid from colleges, private businesses and the government. Following are some suggestions to get you started.
High School Counselors: Talk to your counselor and ask if he or she knows of any local scholarships or state or federal programs for which you might qualify.
Your local library: Ask a librarian where you can find information on scholarships and other financial aid sources.
Local bookstores: Leaf through the newest books about college financial aid. These books often have the words "financial aid," "scholarships" or "paying for college" in the title and are usually located near the college guides. You don't even need to buy the books; you can browse through them in the store and write down helpful information and potential contacts.
Financial Aid Presentations: These are often held in your area. Your school counselor may know of some, or you can call college financial aid offices to ask if they offer presentations.
Current or Recent College Students: Talk to any college students you know about how they are financing their education. They may be able to help you find financial aid sources or point you toward someone who can give you more information.
Financial Aid Organizations and Web Sites
There are many resources you can use as you research financial aid. A number of organizations have Web sites that may help you in your quest for financial aid. They are listed on our Helpful Links page. Or you can do an internet search (see eHow.com for tips on internet searches) for sites that may be able to help you find scholarships and other sources of aid.
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