The basics of financial aid
With the cost of four-year colleges going through the roof, many families seek financial aid. The sooner your family gets started in the financial aid application process, the better. Consult with your student’s high school counseling office. They will have the most up-to-date information available. To start your search on the right foot, see our "Quick guide to need-based financial aid."

Grants
A grant is perhaps the best kind of college financial aid because, by definition, it is a gift that your student doesn’t have to repay. Most grants are need-based, which means they are awarded based on the senior’s income and other financially related factors.

Scholarships
A scholarship is a particular type of grant, awarded on the basis of a senior’s grade point average, athletic skills, other measures of academic merit or some other talent/factor. Your senior doesn’t need to be valedictorian or Michael Jordan to win a scholarship. Having a high grade point average helps, but the key to success is determination. There are literally thousands of scholarships out there. It can take a great deal of time and effort to find and apply for scholarships. Click here for a quick guide to applying for merit-based financial aid.

Click here for helpful resources to start your search.

Student Loans
While you may make too much money for your student to qualify for a grant, everyone qualifies for some type of financial aid such as a student loan. Many factors play a role in determining financial aid, including the cost of college. If your student attends a high-cost college, chances are they will receive more aid than if they attend a lower-cost college.

There are several types of student loans:

• FFEL and Direct Loan: The Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan Program are two loan-based financial aid programs. The federal government provides the funds for the Direct Loan program, while the FFEL is financed by a bank, credit union, or any other participative lender. Both programs are the same as far as terms, conditions and amounts borrowed are concerned. Differences between the two include the source of the loan funds and certain repayment provisions.
• Subsidized Loans: The interest rate on subsidized loans changes from year to year but will never go beyond 8.25 percent. In certain cases, subject to eligibility, the government will pay the interest on the loan while your student is in school, for the first six months after they leave school, and when/if they qualify to have payments deferred.
• Unsubsidized Loans: If the cost of attendance at a certain school is still more than you can afford, your student might be eligible for loan money beyond their subsidized loan. They will be charged interest on this unsubsidized loan from the time the loan is disbursed until it is paid in full. They can choose to pay the interest while they attend school or allow it to accumulate.

Click here for helpful resources regarding student loans and other financial aid resources.

Work Study Programs
Many undergraduate and graduate students participate in the federal work-study program to earn money to help pay their education expenses. To be eligible for a work-study award, students must have financial need. The amount of a work-study award is determined by when a student applies for aid, the student's level of financial need, and the funding level at the school.

Work-study jobs can be on or off campus. A school's Financial Aid Office will have a list of available work-study jobs. In most cases, students can get a job on-campus and often one related to their field of study. Working on-campus usually means working for the school – as cashiers, library attendants, computer lab assistants, campus tour guides, short-order cooks, administrative assistants, bus drivers, etc. Off-campus jobs are sometimes available with private, non-profit organizations or public agencies whose work is in the public interest.

In addition, many colleges sponsor student employment programs, which are independent of the Federal work-study program. Sometimes a student can still obtain on-campus employment through the school-sponsored program even when he/she does not qualify for the federal program. A school's Financial Aid Office can provide information and guidance about school-sponsored employment programs.

Get started early…
The U.S. Department of Education is the main provider of financial aid. Completing the Free Application for Federal Student Aid, or FAFSA, is the first step in the financial aid process. The FAFSA is used to apply for federal student financial aid, including grants, loans, and work-study. In addition, it is used by most states and schools to award non-federal student financial aid.

This form is available on line at www.fafsa.ed.gov. Submit the FAFSA as soon after January 1 as possible to increase your student’s chances of getting aid. July 1 is the cut off for applying for the upcoming school year.

How the financial aid process work?
Once your senior submits the FAFSA, the Department of Education (DOE) processes the information. They send a paper report, called a Student Aid Report (SAR) to your senior. It is important to review your senior’s SAR when they receive it to make sure all of the information is correct and to provide any necessary corrections or additional information.

The DOE enters your senior’s information into a formula from the Higher Education Act of 1965, and the result is your Expected Family Contribution (EFC). This represents the amount you are expected to contribute towards the cost of your senior’s education (although this amount may not exactly match the amount you end up contributing).

Then the DOE sends an electronic copy of your senior’s information to all of the schools you listed on the application. The schools use the EFC to prepare a financial aid package to help meet your student’s financial need.

Financial need is the difference between their EFC and the school’s cost of attendance (which can include living expenses), as determined by the school. If you believe that your senior has special circumstances that should be taken into account, such as unusual medical expenses or a significant change in income from one year to the next, contact the financial aid administrator at the schools to which they are applying.

Any financial aid your senior is eligible to receive will be paid to them through their school. Typically, the school will first use the aid to pay tuition, fees, and room and board (if provided by the school). Any remaining need is paid to your senior for their other expenses. They cannot receive aid from more than one school for the same period of enrollment.