Financial aid is a type of funding that helps college students and their parents afford the cost of higher education. Understanding financial aid and knowing how to secure it can make college more affordable.

Types of Financial Aid

Need-Based Financial Aid

Need-based financial aid is determined by your financial need. Federal student aid and some school-offered aid, like scholarships, fall into this category. Your eligibility depends on your and your parents’ financial situation.

Merit-Based Financial Aid

Merit-based financial aid, on the other hand, does not consider your family’s income or assets. Instead, it is based on factors like your academic record, athletic or artistic talents, or other demographics. Scholarships are often awarded on merit.

Different Types of Financial Aid

Scholarships

Scholarships are a form of gift aid that you typically don’t need to repay. Colleges, universities, and private organizations offer various scholarships. Some scholarships are need-based, while others are merit-based. Additionally, some private organizations offer scholarships based on your background, such as being from a military family or an underserved community. The value of scholarships can range from a few hundred dollars to covering the full cost of attendance.

Grants

Grants are another type of gift aid that usually doesn’t need to be repaid. Commonly offered by the federal government, grants are often based on financial need. Other organizations may offer merit-based grants for achievements in academics or community service. Award amounts vary but typically do not cover the full cost of attendance.

Work-Study Programs

Work-study programs are federal programs that provide part-time jobs to students with financial need. These jobs can be on-campus or with nonprofit organizations and public agencies. However, qualifying for work-study doesn’t guarantee a job, and you can’t earn more than your work-study award.

Federal Student Loans

Federal student loans are financial aid that must be repaid with interest. There are several types of federal loans, each with different eligibility requirements and features. Unlike private loans, federal loans don’t require a minimum credit score, and most don’t require a credit check. They also offer relief options such as loan forgiveness programs and income-driven repayment plans.

Fellowships and Assistantships

Fellowships and assistantships are typically available to graduate students. These are considered gift aid and usually involve a work requirement, such as research or teaching. The amount received can cover tuition and provide a stipend for living expenses.

Employer Tuition Assistance

Many employers offer tuition assistance as a benefit. This assistance can cover eligible educational expenses like tuition, books, and supplies. The amount varies by employer, and up to $5,250 per year can be excluded from your income for tax purposes. Eligibility criteria also vary, with some employers requiring a certain tenure or that the courses relate to your field of work.

Financial Aid Deadlines to Know

Financial aid is offered on a first-come, first-served basis, so applying early is crucial. Key dates for the Free Application for Federal Student Aid (FAFSA) and the College Scholarship Service (CSS) Profile for the 2025-26 academic year are:

• FAFSA Open Date: October 1, 2024
• FAFSA Deadline: June 30, 2025
• CSS Profile Open Date: October 1, 2024
• CSS Profile Deadline: January 1, 2025 – March 31, 2025

Check with your school’s financial aid office for specific deadlines.

How to Apply for Financial Aid

Applying with the FAFSA

1. Create a StudentAid.gov Account: You and anyone else providing information on the FAFSA form need an account.
2. Gather Documents: Collect tax returns, bank account balances, and records of investments and child support.
3. Fill Out the FAFSA Form: Complete the form online or by hand. Provide details about yourself, your family, and your financial situation.
4. Submit the Form: Review your answers and submit the form. Mail it if completing by hand.

Applying with the CSS Profile

1. Create a College Board Account: Create an account if you don’t already have one. Non-custodial parents need a separate account.
2. Gather Documents: Collect tax returns, W-2 forms, income records, and bank statements.
3. Fill Out the Application: Complete the CSS Profile application online.
4. Submit the Application: Submit the application online. An initial fee of $25 may apply if your family income exceeds $100,000.

How to Appeal a Financial Aid Award Letter

If you believe you should receive more aid than your award letter indicates, you can appeal the decision. This is especially useful if your financial situation has changed or you received a better offer from another school.

1. Gather Documentation: Collect documents supporting your appeal, such as proof of unemployment or competing financial aid offers.
2. Write a Letter: Address the financial aid office by name. State why you’re requesting a review and provide a reasonable counteroffer.
3. Wait for a Response: The office will review your appeal and follow up if necessary.

Do You Need to Pay Back Financial Aid?

Some types of financial aid, like student loans, need to be repaid with interest. Others, such as scholarships and grants, typically do not. However, make sure to understand any conditions attached to your aid.

The Bottom Line

Financial aid can significantly ease the burden of college. To maximize your eligibility, research your options and apply early. As you begin your college journey, also focus on building good financial habits.

If you ever need expert assistance or guidance on your credit journey, don’t hesitate to reach out to the Nerds! Additionally, stay updated with the latest tips and information by following us on Facebook, Instagram and TikTok!