Home » Pay for College Understanding Financial Aid
College costs a lot of money. How are you going to pay for it?
Colleges will expect you and your family to pay what you can. Then there are scholarships, grants, and loans to help you with the rest.
One essential in paying for college: Complete the FAFSA as early as possible after January 1 of your senior year. The FAFSA is your key to federal and state financial aid.
Types of aid
How much financial aid will you need?
Dependent or independent?
Types of aid
College can be expensive. Don’t give up when you see the price tag. Financial aid is available to help you meet the cost of higher education.
There are two types of aid:
Gift aid (do not have to be paid back.)
- Scholarships: These may be based on merit or talent (like athletic scholarships) or on need.
- Grants: These are usually based on need. You need to complete the FASFA to be considered for most grants.
Self-help (need to be paid back or require that you work while in school.)
- Loans: Those with the best interest rates come from the federal government.
- Work-study: Federal Work-Study is a need-based financial aid program that allows you to work part-time to help pay for college.
Aid comes from different sources: Federal and state governments, colleges and universities, and private groups and foundations. Tap into all sources of free aid—scholarships and grants—first. Then use low-interest government loans. Never pay for your education with a credit card!
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How much financial aid will you need?
Cost of Attendance (COA)
College expenses vary greatly. Each college estimates the COA by adding together:
- Tuition and fees
- Room and board
- Transportation
- Books and supplies
- Miscellaneous living expenses
Minus
Expected Family Contribution (EFC)
Using information your family provides on the FAFSA, the federal government calculates your family’s EFC, the amount you are expected to be able to contribute toward college expenses. This is only an estimate. The EFC is determined by family income, assets, and size. It takes into consideration your family’s living expenses and the number of family members in college.
Equals
Financial Need
This is the amount of the financial aid award package that you need from the college. The award may consist of a combination of scholarships, grants, loans, and work-study.
Learn more: CollegeZone.com: Financing College. View the PowerPoint, Financial Aid for a College Education, for a step-by-step guide to the process of applying for financial education.
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Dependent or independent?
You may feel independent. Maybe you don’t live with your parents, or you know already that they don’t have any money to help with your college education.
The federal government has a very specific definition of an independent student who can file the FAFSA without their parents’ income information. To be an independent student at least one of the following must apply to you:
- You were born before Jan. 1, 1985 (for the 2008-09 academic year).
- You are enrolled in a master’s or doctoral program.
- You are married.
- You have children who receive more than half of their support from you.
- You have other dependents (like siblings) who live with you and receive more than half of their support from you.
- Both of your parents are deceased, or you are (or were to age 18) a ward of the state.
- You are currently serving on active duty in the U.S. Armed Forces or are a veteran.
If none of these apply to you, you are a dependent student and you have to use your parent’s taxes information to file the FAFSA.
