A Beginner?s Guide to Financial Aid
02/04/2026
A Beginner’s Guide to Financial Aid
Understanding how financial aid works can make a meaningful difference in how families plan for college and their financial futures. While the process can feel overwhelming, having a clear grasp of the basics before applying can help students and parents make more confident, informed decisions.
What Counts as Financial Aid?
Financial aid isn’t just loans. It typically falls into four main categories:
- Grants – Need-based aid that does not have to be repaid.
- Scholarships – Merit-based or need-based awards from schools or outside organizations.
- Work-Study – Part-Time employment opportunities for students.
- Loans – Borrowed funds that must be repaid with interest.
Understanding the difference between these options is key. Grants and scholarships are generally the most favorable, while loans should be considered carefully as part of a long-term financial plan.
FAFSA
Most families start with the Free Application for Federal Student Aid (FAFSA). This form determines eligibility for federal grants, work-study programs, and federal student loans. Many states and colleges also rely on FAFSA-submitted data when awarding aid.
Note: Some private colleges may require the CSS Profile. Check your school’s requirements early to avoid missing any opportunities!
Common Myths
One of the most persistent misconceptions is that financial aid is few and far between and that many students shouldn’t even bother applying. This couldn’t be further from the truth! In reality, many low-income and middle-income households qualify for some form of assistance. Another myth is that applying for aid commits a family to borrowing. This is also not true! Completing aid applications simply keeps options open.
Timing
Keeping track of deadlines is imperative because timing matters with financial aid! Deadlines will vary by schools, state, and program. Missing them can significantly reduce aid eligibility. Even if you are unsure about qualifying, it is recommended that you apply as early as possible anyway to ensure you don’t leave money on the table.
Beyond Tuition
Financial aid can help pay for things beyond tuition. Housing, books, transportation, and living expenses all factor into the cost of attendance and financial aid can help with these expenses.
Best Practice: Create a budget of what all your expenses will look like to help you determine how much you will actually need for college. There are many great online resources to help you do so!
Financial aid decisions can affect a student’s finances for years to come. Learning how aid works can help build financial confidence and encourage responsible planning. This will help make college an investment in opportunity without the uncertainty.
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