Will I Get Financial Aid? What Everybody Ought to Know about Paying for College

So what do I mean when I talk about “financial aid”? Financial aid is money that is either given to your child or that you (or your child) borrow to pay for college. Most aid comes from the federal government in the form of loans, and must be paid back with interest.

If your child qualifies for financial aid, they will receive a financial aid package from the colleges to which they apply. In all likelihood, however, you and your family will still be asked to pay for some—if not most—of your college education.

In the United States, everyone receives a free K-12 education, even though some people choose to pay for private schools. College education, by contrast, is not free.

And your family bears the main responsibility for paying for college. Financial aid is designed to address any gap between what the government calculates that you are capable of paying and the cost of the school.The government makes this calculation based on the information that you provide on the FAFSA.

Two Types of Financial Aid

There are two basic types of financial aid.

The first is referred to as gift aid. Gift aid comes in the form of grants or scholarships and does not have to be repaid.

The second type of financial aid is referred to as self-help aid. This type of financial aid requires that your child works for it or pays it back. Specifically, self-help aid comes in the form of work-study, which I will discuss in a later post. The vast majority of financial aid packages address financial need rather than merit through academics or athletics.

So where does the money come from?

The vast majority of aid (70%) comes from the federal government, and the bulk of that comes in the form of loans.

About 25% of financial aid comes from the colleges themselves. Private colleges give more financial aid than public colleges, but private school tuition is far higher than public universities.

About 4% to 5% of all financial aid comes from private grants and scholarships. I will give some strategies explaining to research and apply for private scholarships in a later post.