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For the month of February, higher education institutions across the country celebrate Financial Aid Awareness Month. The purpose of this commemoration is to make college students and their families aware of crucial information about federal, state and institutional student aid.
The basic cost of a college degree can be a massive burden for families. It may even seem unattainable. Citizens' annual Student Lending Survey found that nearly 70% of current college students and 69% of high school graduates said concerns around college affordability had a moderate or high impact on their fall 2021 enrollment plans.
Students often don’t realize the amount of financial aid available to them. In the 2020-21 academic year, institutions provided an estimated $57 billion in grant aid to undergraduate students according to the National Association of Student Financial Aid Administrators (NASFAA). And, in the previous year, 84% of full-time, first-time undergraduate students received financial aid.
There are many financing options for current and prospective students. Here are five ways you can finance your college education.
College students wear masks to protect themselves from coronavirus. (istock)
1. Fill out FAFSA
The Free Application for Federal Student Aid (FAFSA) is one of the first things you should apply for even if you don’t know what college you are going to. It helps colleges and the government determine if you are eligible for certain need-based grants and loans. The application opens on October 1. Some aid is offered on a first-come, first-served basis, so it’s best to get it done as soon as possible.
FAFSA is free to fill out, and eligible students can qualify for federal grant money. Just keep in mind that you have to fill out the FAFSA every year, and the deadline for the 2022-23 academic year is June 30, 2022. On average, it only takes 23 minutes to complete the form.
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2. Apply for grants
Grants are often referred to as "gift aid" and are provided without the expectation of repayment. They are typically awarded to students who have a financial need and are often determined by a family’s income level. The U.S. Department of Education offers a variety of federal grants to students.
One of these is the Federal Pell Grant. Pell Grant recipients can currently receive up to $6,495 based on their financial needs. This is free money from the government. In the fall of 2021, high school graduates missed out on $3.7 billion in Pell Grant aid because they failed to complete the FAFSA. States and colleges also offer different grant programs that are separate from federal programs. Most colleges provide this information on their websites under the financial aid section.
3. Look into scholarships
Scholarships are typically merit-based. They are given to students who demonstrate an academic, athletic, artistic or even a social achievement. In addition to institutional scholarships, many private and nonprofit organizations offer scholarships. At your university, you will be able to find need-based or merit-based scholarships.
Need-based scholarships depend on your financial situation, while merit-based scholarships rely on GPAs, test scores (PSAT, SAT and ACT), athletics, artistic abilities or other categories. Your college may even offer scholarship-based positions in your field of study. Be sure to figure out if the scholarship is renewable or is one-time gift aid.
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4. Consider taking out loans
Loans, on the other hand, must be paid back and usually have an interest rate. They can come from both the government and private loan companies, such as banks and credit unions. Government loans are often offered as a part of the financial aid package provided by your university.
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A few things to consider is that government loans tend to come with lower interest rates and have more lenient repayment options than private loans. The government offers direct subsidized and unsubsidized loans. Subsidized loans don’t accrue interest while you are in school at least half-time. Unsubsidized loans start accruing interest while you are in college.
Students walking together up campus stairs
5. See if you qualify for federal work-study
Students with financial needs can earn money for college by working part-time through the federal work-study program. The total amount you are awarded depends on when you apply for the program, your level of need and the funding level of the school. Be sure to check with your financial aid office to verify that your college participates in the federal work-study program.
Working opportunities could be at your school or at a private for-profit employer. Something to keep in mind is that you can’t earn more than your total federal work-study award. However, you will earn at least the current federal minimum wage. A Sallie Mae report found that the average student participating in the work-study program earned $1,847 in 2020. You can apply for federal work-study in the FAFSA application.
When it comes to financing your education, every penny really does count.
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When it comes to financing your education, every penny really does count. As colleges around the country celebrate Financial Aid Awareness Month, you will want to follow your school of choice’s social media accounts to see what types of scholarships and grants are available to you. Many colleges are posting tips on navigating the financial aid process. Although the whole process may seem overwhelming at first, remember to start early, take your time to understand everything and ask for help when you need it.
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