“What is financial aid?” is a little bit like asking, say, “What is dessert?”
Sure, there’s the broad concept it represents: dessert is just something sweet you usually eat after dinner (or breakfast… strictly speaking, there are no rules) But are we talking ice cream? Fruit salad? Shots of whipped cream straight from the can?
It’s the same with financial aid.
In simple terms, financial aid is just money to help you pay for college or technical school. But this can come in the form of
Scholarships
Grants
Work-study programs
Loans (Federal and private)
And because of all the ways financial aid can take shape, and the different avenues to pursue it, a lot of students and families report feeling as overwhelmed by the prospect of applying for financial aid as they do applying for college.
But no worries—we got you. Below, we
walk through the basics of financial aid
break down the types of financial aid available to you, ways to apply, and how to understand award letters
and offer links to other in-depth resources.
You’ve got this! Dive in below.
TABLE OF CONTENTS
(click to skip ahead)How to apply for financial aid
Complete the FAFSA
So, the FAFSA (Free Application for Federal Student Aid) can be a bit of a bear (though after the debacle of 2023/2024, the system has been improved), but this is an important step in applying for financial aid. Some schools (generally private colleges) will use the more detailed CSS Profile to determine what aid students receive—details on that in its own section below.
Many colleges use the information on FAFSA to help determine how much financial aid you’re eligible for, so in the end, it will be well worth your time.
Here are the basic steps to complete your FAFSA:
Step 1: Create a StudentAid.gov account (you can create your account here)
Step 2: Get your documents together (this takes some time, so start this process early—you can actually start this before Step 1). You’ll need:
Your Social Security Number and your parents’/guardians’ Social Security Numbers
Tax returns (either yours or your parents’/guardians)
Records of additional income
Information about the money you have in checking and savings accounts
Records of investments, property, businesses
Step 3: List at least one school that should receive your FAFSA form
Step 4: Determine your Dependency Status (head here to help you figure this out)
Step 5: Complete Parent Information if you’re a Dependent Student
Step 6: Sign and submit the FAFSA. You can do this two ways—online at FAFSA.gov or by printing a PDF of the FAFSA and mailing it in (here is the link to the PDF).
If you and your family have never done something like this, we know this may feel like a lot of information to process, but there is help out there if you need some assistance filling out your form. The federal government has created this FAFSA help resource, and you can also contact the Federal Student Aid Information Center.
When does the FAFSA open?
This comes with a caveat that the FAFSA underwent some changes in recent years that were, quite frankly, a little confusing in terms of deadlines.
Right now, the FAFSA opens in mid-November for the following academic year, and the deadline to apply is June 30.
We encourage you to apply as soon as possible once the FAFSA form opens.
What’s the CSS Profile?
The CSS (College Scholarship Service) Profile is an additional financial aid form (separate from the FAFSA) that schools (mostly private colleges) use to help determine if you’re eligible for non-governmental financial aid.
There are around 400 schools that require the CSS profile, and this form helps them dig a little deeper into your family’s financial aid needs than the FAFSA does. Basically, the CSS Profile can help you access institutional aid separate from the federal aid you can access by completing the FAFSA form.
If you’re applying to colleges that require the CSS Profile, head to this in-depth guide to the CSS Profile and CSS Profile schools.
What are different types of financial aid?
You’ve probably figured out by now that there are many different types of financial aid (check out our crash course on how to pay for college for in-depth guidance to applying for each), but before we get into the difference between scholarships, grants, work-study, and loans, we should explain need-based vs. merit-based aid.
What is need-based financial aid?
Need-based financial aid is based entirely on a student’s ability (or in this case, more like inability) to pay for college. Need-based aid considers a student’s financial situation and uses that information to figure out how much help a student will need to cover tuition, books, and room and board.
It’s important to keep in mind that sometimes colleges consider a student’s ability to pay for college when making decisions about admission, but more and more schools are “need-blind,” which means they don’t consider a student’s financial aid needs when deciding whether or not to admit a student. (Check this guide for an explanation and list of “need blind” schools.)
If a school is “need-blind,” it doesn’t mean you can’t get financial aid—it just means your financial status won’t impact your chances of getting accepted to that school.
Federal need-based aid is calculated based on your FAFSA, and includes things like grants, work-study, and Federal student loans. (Detailed sections on each below.)
You may also be eligible for state or institutional need-based financial aid, in the form of things like grants and scholarships.
What is merit aid?
Merit-based aid awards financial assistance based on a student’s academic achievements or commitment to serving their communities. Many scholarships and grants have minimum grade
requirements as part of their eligibility guidelines or require students to demonstrate the ways in which they work in service to others.
Merit aid is often awarded by colleges themselves or private organizations. (But not all colleges award merit aid, or only offer it in exceptional circumstances.)
Scholarships
When it comes to paying for college, scholarships and grants are your best friends (because ideally, you minimize that amount you have to take out in loans).
Just in case, to clarify: A scholarship is a type of financial aid that does not need to be paid back!
Private companies, schools, and the government all award scholarships to deserving students, and they do this for a number of reasons—such as to ensure equitable access to education, to fulfill their own mission and values, or to attract the strongest applicants to their schools.
We’ll break scholarships down into three main types: institutional, local/state, and private. Let’s dig in!
Institutional scholarships
Institutional scholarships come directly from the schools you’re applying to, and schools give this money to the students they really hope will accept their admission offer.
They often cover the cost of tuition, books, and room and board (or some portion of it). Some are awarded automatically, some are offered through an invitation/nomination process, and some require an application process that may include
an application form
and eligibility requirements (sometimes this is a certain GPA, but it might also be something like that you come from an under-represented group, that you’ve exhibited an interest in/capacity for leadership or service, or that you’re applying to a specific major).
Local/state scholarships
Local and state scholarships are awarded by local businesses and organizations or states themselves that want to support students in their communities.
While these local scholarships tend to offer less money than institutional scholarships, the eligibility requirements aren’t usually as rigorous since the major requirement is often where you live.
A particular advantage of local scholarships is that the applicant pool is often much, much smaller than the pool for large private scholarships—being one of a few dozen or hundred applicants is generally much better than one of many thousands. And every little bit helps when trying to pay for college, so don’t overlook these often overlooked resources!
Some states offer great scholarship support, like the HOPE Scholarship in Georgia or New York’s Excelsior Scholarship or Florida’s Bright Futures Scholarship Program—be sure to explore what financial aid your state might offer to students.
Private scholarships
The bulk of scholarship opportunities come from private scholarships, and while it can be a little overwhelming to wade through all your options, there is a lot of this type of financial aid available to students, so it’s worth your time to research what you might be eligible for. (See the link at the end of this subsection for ways to refine your search.)
Private scholarships are awarded by foundations, national organizations, and big corporations (like the Coca Cola Scholarship), and they tend to target certain groups of students.
For example, the Gates Scholarship is a financial aid reward for high-achieving high school seniors. They’re intended for under-served, minority students who’ve demonstrated remarkable leadership and academic achievement in high school and who come from low-income households.
There is also the Questbridge College Prep Scholars Program that aims to assist deserving high school juniors from low-income backgrounds in paying for highly respected colleges, or the Hispanic Scholarship Fund, whose mission is to encourage and empower Hispanic students to apply to and be successful in college.
And these are just a few! There is money out there that people WANT to give you to help pay for college, but you'll have to devote some time to finding it and applying for it.
Grants
Grants are a type of need-based aid that often cover a good portion of tuition costs, and, like scholarships, this is not money you need to repay!
How do you apply? One major component is that handy-dandy FAFSA we already talked about (see section above).
There are three main types of grants: federal, state, and institutional. Let’s check these out.
Federal grants
Federal grants are awarded by the federal government and are typically reserved for families at or below the median family income level. There are three main types of federal grants:
PELL GRANTS—These grants are awarded to undergraduate students who have the greatest financial need when it comes to paying for college. There are some rules and eligibility requirements (you can learn more about Pell Grants here), but millions of students benefit from Pell Grants each year.
SEOGs (Supplemental Educational Opportunity Grants)—These grants are meant for students with exceptional financial need who would benefit from an extra supplement (usually $1000-$2000) to the Pell Grant. If the Pell Grant won’t cover everything a student needs, SEOGs can help bridge that gap.
TEACH GRANTS—You guessed it… these grants are for students who want to become teachers, and the awards are an additional $4,000. Just keep in mind that if you don’t actually become a teacher after graduation, this grant turns into money you have to pay back.
State grants
State grants are exactly what they sound like—grants awarded by the state to students attending schools in that state (there are a few exceptions to this rule, for example Pennsylvania, but by and large, this state money stays within the state).
These grants are awarded IN ADDITION to Pell Grants, and like the Pell Grant, all you have to do is fill out the FAFSA form.
Your high school counselor is likely a great resource for how things work in your particular state. And someone sitting in your state’s higher education office (check out this map) would likely love to answer all your questions about your state’s aid programs if you call/email them.
Work-study
Sometimes, students find they need even more than grants and scholarships give them, and work study is another option for earning money for college.
There are federal work study programs that connect undergraduate and graduate students with part-time jobs to help pay for school, and students are encouraged to work in jobs that are related to their course of study.
There are also work study programs offered by colleges and universities (check out UCLA's program as an example) that allow students to work on-campus and to receive a paycheck that can help pay for school expenses.
Loans: Federal vs private
We almost hate to tell you about loans, especially private loans, because students often find themselves buried in debt once they graduate and can spend decades repaying these loans after they finish school.
But they are a way to help pay for college, so we’ll just encourage you to try to get all other forms of financial aid first before you turn to loans as an option.
Loans are funds you must pay back after borrowing them. Banks, credit unions, and lending organizations are all places that offer private educational loans, and oftentimes, you don’t have to start these repayments until you graduate. However, the interest rates tend to be high on private loans, and this interest often accrues while you’re in school, so you’ll end up owing more than what you initially borrow.
Federal loans are still loans (here are the different types), but the interest rates tend to be a little lower, and it’s possible to take out loans that do not accrue interest while you are a student, and there are different options for repayment.
If you have to take out loans, generally take out direct subsidized federal loans first.
And for all loans, we encourage you to read the fine print very carefully before signing anything or accepting any money. Look at the repayment terms, the interest rate, and any penalties for paying the loans back early.
Financial aid deadlines
Keep in mind that there is no single deadline to pay attention to, but also that it’s more important to focus on when applications OPEN, not when they close, since many colleges function on a first come, first served basis. Meaning even if a college has a later deadline, very frequently, applicants who submit early are the ones who receive the aid. Colleges can run out.
Be sure to track:
The FAFSA opening and deadline (again, try to complete the FAFSA as close to when it opens as you can, rather than thinking of the deadline!)
Different deadlines for different colleges for the CSS Profile, typically ranging from January 1 to March 31 for regular decision; but if you’re applying EA or ED, students usually need to submit a CSS Profile by November 1. As with the FAFSA, we’d strongly recommend working on your CSS Profile as early as you can (it usually opens October 1).
If you miss a school’s deadline, you’re usually out of luck for grants and scholarships available at that school through the CSS Profile.
FAQ on financial aid
Are there colleges that offer complete financial aid?
Yes, and you can check out a list + complete guide to how that aid works here.
What is Title IV financial aid?
Title IV is part of the Higher Education Act of 1965, which established federal financial aid programs to increase access to postsecondary education (which is any formal education that takes place after high school, including college, vocational school, and adult/continuing education).
What is an ISIR in financial aid?
Are you tired of the acronyms yet? Understandable, but here’s one more: ISIR stands for Institutional Student Information Record and is basically a summary of the information on your FAFSA form. The FAFSA system automatically generates your ISIR and sends it to the schools you’ve designated to receive this information, and the schools then use it to help determine the financial aid you’re eligible for.
The ISIR includes information about how much your family is expected to contribute, which used to be referred to as your EFC, but with the 2024-2025 FAFSA is being replaced by the Student Aid Index (SAI), a new analysis formula used for determining need-based aid.
How do financial aid deadlines work?
This is covered some above, but again, it depends on the type of aid. Scholarships tend to have individual deadlines set by whoever awards them, but the FAFSA form must be completed by June 30 for the fall semester. But since most grants require the FAFSA form, we again encourage you to submit the FAFSA as early as possible since once some grant money is gone, it’s gone.
What is a financial aid award letter?
These letters outline for you all the financial aid you’ve been awarded by a specific school (grants, scholarships, work study, loans), so this will look different from one school to the next.
When trying to decide which school you want to attend and which school you can afford, these award letters are super important to pay attention to since they let you see which school is offering you the most comprehensive aid (click here for more detailed information about how to read your award letters).
Can I appeal financial aid?
You can, and many people do! The FAFSA form and process is not perfect by any means, and sometimes important financial information gets missed, so you absolutely have the right to appeal your financial aid award if you feel something about your situation has been overlooked.
Making an appeal doesn’t ensure you’ll get more money, but families are often successful in the appeal process if they have the right documentation and can clearly demonstrate their financial need. Here's a guide for how to write a financial aid appeal letter.
What if I still need help figuring out how to apply for financial aid?
Applying for financial aid is A LOT. We understand! Chances are, you still do have questions. The great news is there are people you can go to who advise students on this very thing.
If your high school has a college counselor, start there! They are trained to connect you with all the financial aid resources you have available to you.
And if you already know which schools you’d like to apply to, contact THEIR financial aid offices. Even though you aren’t a student there yet, you ARE a prospective student, and they want to help.
Special thanks to Jessica for writing this blog.
Jessica has a Ph.D in English from the University of Southern California and teaches English at a Los Angeles-area independent school, where she has also been English department chair and a class dean. Sandra Cisneros is her hero, and she loves books, her awesomely-sarcastic family, the beach, cozy sweaters, and more books. Oh, and her sweet pitbull/lab mix named Ruby.
Top values: Curiosity, equity, wonder
