What is Financial Aid? How does financial aid work? | college avenue (2023)

What is Financial Aid?

Financial aid is money received from an outside source to fund higher education. It can cover expenses such as tuition and fees, books and supplies, room and board, transportation, and some living expenses. College financial aid is offered by a variety of bodies, e.g. B. by government, school or private companies, and there are different types, e.g. B. Grants, Scholarships, Work Studies and Loans.

College Ave student loan survey results showhow surveyed students finance their education:

• Scholarships and grants: 64 percent
• Parents' income and savings: 50 percent
• student loans: 43 percent
• Student income and savings: 37 percent
• Private student loans: 12 percent

Some grants are designed for students who demonstrate financial need, but there are other types that can be based on anything from academic performance to credit scores. And some financial aid is refunded, some is not.

How does financial aid work? The best way to learn about each of your options is to drill down to all financial aid opportunities and walk through them step by step. Let's dive! We explain what financial aid is, the different types of financial aid available to you, where to get it, and much more.

Types of subsidies

What is scholarship? There are four main types of financial aid: grants, scholarships, work studies and loans. Each type of financial support has very specific characteristics and individual eligibility requirements.

subsidies

Grants are funds that generally do not need to be repaid. Grants are funds paid by an organization (eg, federal, state, or foundation). They are usually need-based and you can find scholarships based on major, ethnicity, and more. To checkFederal funding programsto receive grants that may be relevant to you, including the Pell Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG), two grants for students who demonstrate financial need.

concessions

Just like scholarships, scholarships don't require you to pay. However, unlike grants, grants are generally not needs-based. Instead, scholarships are usually based on merit or talent. You can receive scholarships based on your grades and test scores, athletic ability, musical talent, and more. You can find various types of scholarships through national organizations, colleges and universities, local organizations and the list.

learning and working

The BA offers part-time work to financially challenged undergraduate and graduate students. You can find work on or off campus to supplement your spending money or money for school.

Federal and private student loans

Colleges and universities almost always include federal student loans (e.g.,Subsidized direct loans and unsubsidized direct loans, jPLUS direct loans) for which you may qualify as part of your benefits package. Federal student loans are funded by the federal government. However, you can also take out private loans to cover tuition costs.Private student loans are not federalLoans, usually available through a bank, private lender, credit union, or government agency.

Read more about grants, grants and loans in “What is the difference between grants, grants and loans?“.

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earnings vs. Need-Based Financial Aid

As mentioned above, there are merit scholarships and need-based college financial aid, and often students qualify for both.

• Need-based helpit is financial support given based on your and your parents' financial situation. The best way to determine how much need-based help you are receiving is to submit theFree Application for Federal Student Aid (FAFSA). A government subsidy, such asIowa-Studienstipendium, is a good example of need-based help.
• performance based helpit is not based on need. Universities and private organizations award scholarships based on merit and talent. A singing scholarship is a good example of a merit-based scholarship.

Student loans don't fit into one category or another. Some student loans are needs-based, like the directly subsidized federal loan, but the vast majority are not needs-based. Any student who attends an accredited school, regardless of financial need or merit, may qualify for direct, unsubsidized federal loans. Finally, personal loans usually require you or your co-signer to have good credit.

How does financial aid work?

Fortunately, financial support is not an unattainable goal! Here's what you can do to get it.

Complete the FAFSA for Federal Grants

The most important thing you can do to get federal student aid is to submit theFAFSAfrom the 1st of October of each year. Submit as soon as possible, as some assistance is offered on a first-come, first-served basis.

Some quick facts about the FAFSA:

• It's free. If you find a website that asks you to pay the FAFSA, it is a scam.
• You will fill in the information based on your financial information and that of your parents.
• You can use the IRS Simple Data Recovery Tool (DRT) to obtain information for the FAFSA.
• When you submit the FAFSA, you will be asked which colleges and universities you would like to submit the FAFSA to.
• You will also receive a Student Aid Report (SAR) listing everything you submitted to your FAFSA. It is important to read this information to ensure it is correct.
• Your SAR lists your family's Expected Family Contribution (EFC), which is the amount you and your family must contribute toward college expenses.
• The colleges you list take your EFC, SAR, and FAFSA scores and use this aggregated information to calculate your financial aid package.

learn more abouthow to fill the fafsa.

Complete Institutional Aid CSS Profile

The CSS Profile is an online application that colleges and universities can use to determine whether you are eligible for non-governmental financial aid. Not all colleges require you to complete the CSS profile, although around 400 colleges and universities do.

Some quick facts about CSS profiling:

• CSS profiling costs money. Your first application costs $25, and each school you submit the CSS profile to after that will cost you $16. You can get a fee waiver if you are a high-need student.
• You can apply from October 1, 2020. It is recommended to submit CSS profile and FAFSA at the same time.
• FAFSA and CSS profiles are not the same: they each calculate their wealth differently. Completing the CSS profile does not replace the FAFSA. Rather, it is an additional request for institutional financial assistance.

Learn more by reading our article:What is a CSS profile?

Apply for Scholarships

Scholarships can serve an important purpose in the overall funding of your studies. Here are some quick tips for finding and applying for scholarships:

1. Define your specific talents and skills.What are you good at What do others say you are good at? You may not even recognize it in yourself until you start asking!
2. Do you fit into a certain profile or group?You can find many scholarships geared towards specific groups of people: women, people with disabilities, graduate students, Latino students, students pursuing specific specializations, and more. And some are available because you or your parents work or because you have a certain background, maybe you come from amilitary family.
3. Consider how you will demonstrate that you meet or exceed the standards set by the scholarship provider.You must be able to communicate how you radiate. This could mean practicing a lot or working with your music teacher to capitalize on your musical talents. You may need to work on your writing skills so that you can communicate your other interests through scholarship essays. Whatever you need to convey, ask others for help.
4. Apply to everything you find.You can find a scholarship to cover the full cost of your tuition, or you can take advantage of some scholarships that are worth a few hundred dollars each. In any case, all scholarships are worth applying for as they can definitely help you to reduce the cost of your education.
5. Ask colleges and universities what they offer.Don't overlook the merit scholarships that are right in front of you - at colleges and universities! The amount can end up being a sizable chunk of money. actually theaverage merit awardamong 1,078 colleges evaluated in an annual survey in the fall of 2018 was approximately $11,279.
6. Ask if you can apply even if you don't meet the criteria.Usually when applying for a scholarship you want to meet all the requirements. However, many scholarships are not claimed every year. Ask a grant committee chair if you can still apply. They might say yes based on the number of requests they've received.
7. Apply for scholarships in advance and check everything.Don't rush to submit all your scholarship applications the night before. You want to make sure you've spelled everything correctly, including complete answers, and used impeccable grammar. Allow enough time to double-check and have a trusted adult read it beforehand.

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How do I find scholarships?

You hear this a lot when you're deep in the college hunt: "There are a lot of scholarships 'out there.' Unfortunately, that doesn't get you very far.

You can find various scholarships by asking at:

• Your office for school counselors, colleges and career centers.
• Various civic organizations
• religious organizations
• The company your parents work for or your own employer
• Scholarships and Colleges – Ask about merit-based scholarships at any institution you are interested in
• your local library
• federal agencies

Don't forget to look for scholarships at:

• social media
• scholarship applicants
• United States Department of LaborScholarship search tool

Be careful. You want to take advantage of reputable scholarship offers. You should never pay to get scholarships or other financial aid.

you can requestconcessionsat any time. In fact, you can apply for scholarships during your studies too! Some scholarships do not require essays, such asMonthly draws of $1,000 for College Ave student loans¹.

Financial Assistance Deadlines

Each grant date is different. Some scholarships and colleges have earlier deadlines, while others have later deadlines. Be sure to check the deadline for each type of financial assistance you apply for so you don't miss out on any financial assistance opportunities.

In addition to deadlines, it should also be noted that there are many applications for financial support on a first-come, first-served basis. In many cases, just because you submitted your application before the deadline does not mean you are guaranteed financial aid to which you are entitled. It's a good idea to submit important requests as soon as possible so you don't miss out on any opportunities for financial assistance.

Research and apply for private student loans

Unlike government student loans, you cannot obtain private student loans by filing the FAFSA as they are not funded by the government. Private student loans are based on credit and income requirements. Most college students do not qualify for a personal loan on their own, so a parent or other adult with good credit must co-sign the private student loan and share the same responsibility. However, the biggest benefit of taking advantage of private student loans is that they can bridge the gap between what your college or university is offering, your own savings, your family's contribution, and any federal financial assistance you may have.

When is it time to investigate one and applyprivate student loansDon't assume that all personal student loans are the same. Benefits can vary greatly depending on the lender. Be sure to look for lenders with flexible payment options, competitive interest rates, and great customer reviews.

Curious about how the process works? Here are the basic steps you can use.take out private student loans.

Pre-qualify or apply nowHerehe wasFederal vs private student loansfor more information.

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Knowing all these financial aid sources in one place can feel overwhelming. Also, paying for college can require a variety of resources, and every family is different.

However, remember that resources are available to you. A good place to start is to talk to your college or university tax office.

When you get to the point where grants, scholarships and government grants are distributed, private student loans are a great option to meet your financial needs. College Ave offers a variety of different private student loan options that can help you complete your education.

Try College Ave'sprequalification toolto see what types of student loans and financial aid you qualify for.

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