Skip to: Menu | Content | Footer

Financial Aid Made Easy

Introduction

You’ve made the decision to go to college; however, like many students, you’re wondering how to pay for it. You probably know there are options like student loans and scholarships, but you aren’t sure how to find your way through all the red tape. You also may be wondering how you will balance work and family, especially when it comes to juggling your time and money.

If any of this sounds familiar, you’re in luck. Here, you’ll find information on avoiding the mistakes many students make when looking for a way to pay for college, resources to assist you in obtaining funding, information on the types of available funding, and advice on what is right for you.

Let’s get started!

Myths and Mistakes

Below are some of the common pitfalls that unnecessarily prevent students from finding financial aid. Review them carefully so that you can avoid them; then follow Steps 1-4 in order to find some sources of financial aid for your education.

Believing there’s no aid

One of the most common assumptions students make is that there is no financial aid available for them. You may be thinking that because you are not an 18-year-old fresh out of high school, no funding is available to assist you with college costs.  Or maybe it’s the reverse — perhaps you are fresh out of high school, but you think because of that, no funder will take an interest in you, or perhaps you believe that your parents make too much money for you to receive assistance. In nearly all cases, this is simply not true. There is an abundance of resources out there that can help you fund your education.

Not applying

What if you discovered that some scholarships and grants remain “in the pocket” of funders because no one looks for them or applies for the money?  This happens more often than most students would believe. A recent press release entitled “New College Board Report Finds Millions in Financial Aid Go Unclaimed at Community Colleges“ contains some surprising statistics, but the title says it all — millions of dollars in financial aid go unclaimed each year. Millions!

Chances are very good that there is money out there to help you pay for your education.

Not researching

Part of the reason some students do not receive assistance in paying for their education when there is financial assistance available is that oftentimes, students and potential funders have difficulty finding one another. Although some funders and colleges are working to make it easier for funders and qualified students to find one another, students should not make the mistake of leaving their future in the hands of someone else, especially a large organization that deals with so many students that you are likely to get lost in the shuffle.

No one knows you, your situation, and your needs better than you do, so be proactive in looking for any possible sources of funding available. This means researching, diligently finding sources, and aggressively applying for financial aid. It may seem like a lot of work, but it’s not as difficult as it may seem.  Many online sites, databases, and other resources are easily accessible and searchable. If you know how to use an Internet search engine like Google, you will likely find it simple to hone in on a financial aid resource based on your characteristics and needs. Keep in mind that a little effort upfront may save you (and indirectly, your family) a lot of additional work, time, and financial struggle while you attend school.

Not asking questions

Let’s face it — even with user-friendly resources and helpful financial aid office staff, you will most likely have questions. Where can you find money? What are your options? Is there financial aid available even for someone who is not a star athlete or straight-A student? The best way to find answers to those questions is to simply ask.

Missing or ignoring small and local funds 

One of the best places to look for financial aid is local and smaller scholarships and/or grants because often students either don’t look for these sources of financial aid or they don’t apply for them. Check with local businesses, community foundation centers, your target institution, etc. for aid opportunities. Watch for announcements about any scholarships or grants they may offer. For example, if you intend to pursue a career in healthcare administration, check with local hospitals, nursing homes, and other such related businesses. It may be helpful to sign up for their RSS feeds and/or newsletters, to bookmark their news release site, or even to send a letter of introduction that briefly states your education and career goals, asking if they offer any sort of scholarships to local students.

Typically, the support given by a local source may be smaller than that provided by a national or international source, but there is usually much less competition because a good percentage of students also don’t bother applying for local sources because of the small scholarship amount. However, remember that even a small amount helps, especially if you gather up several rewards.

Misdirecting educational funds 

Among students who receive some sort of financial aid, one of the biggest mistakes made is in misdirecting the funds, even if this is done with good intent. Although many forms of financial aid are paid directly to an account with the institution so that they are only available for their intended purpose (e.g., tuition, books, and supplies), some funds may be given directly to the recipient with the assumption they will be used toward educational expenses. However, some students see another expense, like a car payment, as a more pressing concern, so they will apply their educational money toward it rather than spending it on tuition or books. Then, when it’s time to pay an educational expense, they cannot pay. The result of this is that students can be dropped from a course or even from the institution because of missed payments.

The easy solution is to consider any financial aid received toward education as being only for that purpose. Continue to pay your other living expenses as you would have if you had not enrolled in college.

Not planning carefully and/or sticking with the plan

Another common issue that results in unnecessary expenses is changing majors or colleges repeatedly. For example, a student enters college adamant about her major. She’s going to be a nurse and that’s all there is to it. However, as she gets into her courses, she realizes the career is not for her. She switches majors to another popular choice, deciding to go for an MBA instead. This renders some of her credits non-applicable, adding additional time and costs to her graduation plan.

The fact is, it’s not unusual for college students who enter postsecondary education with a specific major in mind to change that major three to five times. Those who don’t have a major in mind typically only change once or twice. While this may seem somewhat contradictory and it may, the explanation is that many students choose a major based on what their friends are doing, what their family members are suggestion, or what they have heard is a good career choice rather than picking a major based on their own interests, skills, and preferences. Although changing majors may be somewhat unavoidable because students may not be fully informed on what a major or career entails until they begin their studies, the chances of this happening to you can be greatly reduced with some prior planning and consideration.

Take the time to look into the requirements for a major and the job duties of your career choice carefully. Again, ask questions. Meet with an advisor, a professor, and/or someone who works in your field of interest. Ask what attracted them to that job, what they like most, and what they like least. Ask what they wish someone had told them before they got their start. Take some career assessments that can help guide you as you consider your education and career options.

Don’t be persuaded by the choices others have made or predictions in the job market. What your friends are doing or what someone believes may happen with the economy may not be accurate for you. Also, don’t forget the importance of transferable skills, as those are the employee abilities that most employers are looking for, like good communication skills, the ability to solve problems, and technical fluency. Will a major or the course content/delivery help you obtain and improve these skills?

Now that that you know to avoid the myths and misconceptions associated with financial aid, let’s learn how to pursue funding for your education.

Step One: Assess the True Cost

One of the first steps in pursuing financial aid is to get an accurate estimate of the amount of money you’ll need to achieve your goal. Here are some helpful tips: 

Online costs vs. traditional F2F

Tuition at online schools may be calculated a bit differently than at traditional ground campus schools. For example, many online schools have the costs of textbooks included in their tuition, making it appear higher at first glance than traditional brick-and-mortar schools that typically do not have books and other fees included in their tuition. Therefore, this should be carefully considered.

Also, the money saved by attending online should be added into the equation. Online students will save money in areas like transportation, parking, clothing, childcare, etc. over traditional schools. You also won’t be helping to pay for any building-related expenses, such as the renovation of parking lots or auditoriums, or the upkeep of sports teams, etc.

On the other hand, online students will need near daily access to a computer with an Internet plan that is more reliable than dial-up service. There may be some additional expenses related to setting up a home office or work station. Yet, keep in mind that these latter expenses may come in handy for your future career and the education of your children, so they can be a worthwhile investment. They may also be tailored to your personal preferences.

How to calculate

Assess how much you will really need — need, not want — for college expenses. Lending Tree offers an excellent overview of typical college expenses. Some you may be able to check off the list, while others may be ones you hadn’t thought of yet. Carefully consult the website for other relevant information on costs for the university of your choice. If you have trouble finding the information, try searching a site like College Board’s database. It may also be helpful to create a timeline showing when amounts are due. For example, if the annual tuition for a university is $3,000, the entire amount won’t be due in one lump sum before the start of the academic year, so students may also be able to spread payments out over the year at roughly $250/month.

Be aware that college tuition rises faster than inflation, so plan on a 5-8% increase in the cost of each year of attendance when calculating costs.

Complete a cost benefit analysis

Is the expense of college worth it? In fact, this very question was at the core of the recent federal investigation into “gainful employment”.  Postsecondary institutions are being reviewed to determine whether or not they can deliver on the implied or stated promise that a degree from them will result in a higher paying job or better career options for their students.  This is something you should be asking individually as well.

To do this, you can estimate your potential college costs and subtract any financial assistance that does not have to be repaid (e.g., scholarships and grants). Then, you can compare the resulting expense with the potential to gain. This may be done in four easy steps:

  • First, go to The Occupational Outlook Handbook and look up the future position/major area. Check out what the projected job prospects and salary are for that position. Based on this, determine if it would be possible to pay back any monetary investment made in a obtaining a degree in that area. Likewise, see if there are any entry level positions that could be pursued along with the degree. Students with the long-term goal of becoming a lawyer could start as a law office receptionist, legal secretary, or paralegal, for example, to gain experience and gradually work their way towards a higher salary that will help them advance professionally.
  • Second, make use of sites like Salary.com, where local salary information may be obtained along with regional and national averages. It may be helpful to consult local job listings and check them regularly to see if the desired position is available on a regular basis.
  • Third, consider what research says about the benefits of getting a college degree. Keep in mind that there are intrinsic benefits beyond the financial. As the Education Pays report indicates, “The knowledge, fulfillment, self-awareness, and broadening of horizons associated with education transform the lives of students and of those with whom they live and work.” Many online students, for instance, find that furthering their own education sets a good example for their children.
  • Fourth, make sure that others are on board with your plan to pursue postsecondary education. The information discovered in the first three steps should be shared and discussed with family and friends so that they also see the benefit of your attending school. Find out what their concerns are and share yours. Don’t be afraid to ask for help.

Now that you have as accurate an estimate of what college will cost, let’s look at the different types of financial aid available to help you pay for it.

Step Two: Learn the Different Types of Financial Aid

Savings Plans

Ideally, everyone should start a savings plan as early as possible to offset the rising costs of college and any needed funds that are not covered by a type of financial aid. There are a few options available:

  • The Gerber Life and College Plan and others like it provide a good option for parents and other family members to begin saving for the postsecondary education of a newborn or young child. Family members may contribute as the child grows up. The plan may be started for a minimal fee, and if the child does not go to college, the money may be withdrawn for any purpose. The fund is also guaranteed, so there’s no need to worry about the economic downturns. Finally, if something unfortunate happens to the child’s parents, the child receives the full benefit of the plan as a beneficiary.
  • 529 Plans also allow families to save money for college ahead of time. They may be started at any age. Every state and the District of Columbia operate plans, and some educational institutions do too. Those interested in this type of plan may choose between the pre-paid tuition plan or the college savings plan. Typically, the prepaid tuition plan allows the buying of “credits” or “units” that are guaranteed at current prices, which may then be used toward future college expenses, often including on-campus living expenses. There is typically a residency requirement. College savings plans serve a similar purpose; however, they allow account holders to invest more aggressively (e.g., in the stock market) when the future student is younger. As the student moves closer to college age, the plan shifts to increasingly guaranteed funds. Investors should be careful to check on what types of investments are insured by the state and/or federal governments. There is typically no locking in current prices and no residency requirement, but college savings plans do give students a bit more flexibility in where they attend college.
  • Other types of savings plans may also be utilized. Simply setting aside some money in a special college fund can often produce good results. Roth IRAs, for example, are often seen as a good option, and a regular savings account or a certificate of deposit (CD) may also work well. The key is to have the account dedicated specifically for education.

Scholarships

A scholarship is basically money given to students specifically for their education. There is a multitude of scholarships to search, each with their own criteria that applicants and recipients must meet. Although people tend to be aware of merit scholarships that are based on good grades, and athletic scholarships that are based on sports, many other types of scholarships are available to students. Because there is such a wide variety of scholarships available, students should search the Internet, databases, and any other resources to find scholarships that they may qualify for, especially since the main advantage to scholarships is that they do not have to be paid back.

Grants

Similar to scholarships, grants offer students money toward their educational needs without the requirement that they be paid back. Often, grants also have certain guidelines or stipulations that must be followed. For example, if a student receives a grant from a local bank to pursue a major in finance, there may be stipulation that the student work at that bank for at least a year after the degree is completed. Although some students may not like such a restriction, often these stipulations are advantageous. After all, who wouldn’t want a guaranteed full-time job after graduation?

Work study

The Federal Work Study (FWS) program provides on-campus employment to students in need of financial assistance by providing them with a job and an hourly pay that is at least at the minimum wage level. The Expected Family Contribution (EFC) is used to help determine wages. Basically, the income of independent students, the income of the parents of dependent students, and other factors like the size of the household are determiners of the EFC. Although FWS positions are somewhat limited in the amount of hours a student may work, students should consider this option for the work experience it provides. For instance, business students may be able to work in the Business Administration Department, gaining additional experience in basic office skills that may be added to their resume upon graduation.

Military

Students with military experience have options for pursuing higher education; many of these are summed up at GoArmyEd.  The federal government offers tuition assistance, the G.I. Bill, scholarships, loans, and other support specifically designed for current and former soldiers. Students with military experience should also check with their university of choice, as many provide additional forms of assistance, like capping the per-credit tuition rate so that dedicated service personnel do not have to pay additional out-of-pocket expenses for amounts not covered by military financial aid.

Loans

Student loans are another option frequently used to pay for college. Like other loans, students borrow money to use toward their education. Loans are typically easier to get than scholarships, and they may offer some advantages, like low interest rates and payment deferment while students are still attending school. These benefits are typically for federal students loans, so check the terms of a private student loan (e.g., from a local bank or credit union) carefully. Whether the loan is federal or private, the disadvantage is that these do have to be paid back, and, depending on how much a student borrows, the debt burden may exceed the potential income benefit of obtaining the degree. In other words, students should be careful not to attend expensive schools that will require a large student loan if the job opportunities based on that degree do not offer salaries high enough to pay off the loan.

If you’re interested in a loan — and most students do need some assistance of this type — there are some different types and options to consider. There are two main categories: federal and private student loans.

Federal student loans are a type of government support for education. There are two main types: student loans and parent loans.  These are basically what they sound like. As a student, you may apply for a loan as an independent borrower. This will typically be a Stafford or a Perkins loan.  If you are the parent (biological or step), you may apply for a loan for a dependent child. The U.S. Department of Education is the lender; however, they may act through a local representative bank, credit union, or another type of financial institution. If there is financial need, the loan may be subsidized, meaning the government pays the interest on the loan for you while you are still enrolled at least part-time in school. The government will also pay the interest on the loan for you if you defer payment at any point after you complete your education. Unsubsidized loans are more traditional in that they begin charging interest from the date the loan is received until it is paid off. Both subsidized and unsubsidized loans have annual limits with subsidized being about double the amount of the unsubsidized. Stafford loans are a good example.

The other main type of loan is the private loan. These are offered by financial institutions without the federal government acting as a lender. For instance, if you borrow from your local credit union, that organization will be the lender. These have the advantage of improved, more flexible benefits than the federal loans. For example, there may be no fees, a lower interest rate, an option to pay the amount back in part by working, community service, or military service.  On the other hand, buyers should beware as they may have additional costs, stiffer penalties for late/non payment, etc. Check the terms of any private loan carefully. Read the fine print and ask questions, especially if you have any concerns.

There are a few other options to consider.  Consolidation loans which allow students and parents to combine all loans into one to make paying them off a little less confusing.  Students and/or parents may want to simply check with the lending institution(s) for their existing loans to see if one of them offers a good deal on a consolidation loan. Also, peer-to-peer loans are available from one individual to the student. These may be set up with the assistance of a financial institution between a person the student knows or they may be set up with an individual the student does not know as some people do this not only as a way to make money, but also as a way to pay it forward. For example, if an individual felt he or she benefitted from the assistance of someone, he or she may feel a desire to help someone else. The terms for peer-to-peer loans may offer the most flexibility, but again, these should be carefully considered.

As with any other large purchase, do your research. The Federal Trade Commission offers a helpful site to help identify fraudulent or undesirable lenders. Their tips may be largely summarized by two common sense precautions: 1) Don’t be swayed by appearances or giveaways; 2) Don’t provide any private information until you’ve had a chance to check the lender out at sites like “your state Attorney General, your local consumer protection agency, and the Better Business Bureau.”

Ways to save money as a student (wants vs. needs)

Preparing for higher education should be taken as seriously as saving and paying for other large purchases, like a car or a house. Students (and their families) should do all they can to reduce spending and save; these funds should then be directed toward educational expenses. Budgets do not have to be too extreme, just reasonable, and there are many resources online to assist. The dividing line between “wants” (things students would like to buy/have) versus “needs” (things students must have to survive) can be an easy help. Students may be able to redirect some of the money spent on entertainment toward educational expenses, for example.

In general, a combination of the above techniques is an excellent strategy. There’s no reason students can’t apply for grants and scholarships, for example, while also trimming their budgets.

Now that you have a good idea of how much you’ll need for your education and what types of financial assistance are available, let’s take a look at how to find sources of funding.

Step Three: Search Sources for Financial Aid

Social Networking

You are probably familiar with the term “social networking.” This is a great way to start looking for financial aid. Make sure everyone you know — family, friends, coworkers, etc. — is aware that you intend to go to school and that you are looking for scholarships, grants, or any other form of financial aid. Provide as much information to them as possible, especially your major, your educational/career goals, and where you’d like to attend. Ask them if they know of any financial aid opportunities, or to notify you if they hear of anything. In addition, make good use of social media (e.g., Facebook) to spread the word about your hunt for aid.

School(s) of choice

Next, be sure to make an appointment to meet with a financial aid advisor at your university of choice and have a list of your questions and concerns readily available. Take notes and get information on every possible financial aid option that’s offered. Some schools have programs to help specific students (e.g., many schools cap tuition for military students), and many have guides or searchable databases to assist you with financing your education.

FAFSA.ed.gov

Be sure to complete the Free Application for Federal Student Aid application. This may be done online via the Department of Education’s website, or when you complete your income taxes in the spring. Most of the information needed for the form may be uploaded automatically; then, it’s just a matter of reviewing and completing any missing information. The application is quick and user-friendly. Be sure to have the needed information ready so that it will take fewer than 30 minutes to complete. This will enable you to automatically be considered for most federal financial aid programs.

Employers 

Most employers want employees who are well educated, as this is certainly good for business, so check with your employer to see if any sort of educational assistance is offered. You can check with the employers of your family members as well, as some employers are generous enough to offer some financial aid even to the family members of the employee, which could work to your benefit. It’s also worth speaking to your supervisor; sometimes if an employer doesn’t have a plan, your supervisor may be able to assist you in some other way. For example, some businesses will allow employees who are pursuing higher education a bit more flexibility in their schedule or the use of a corporate computer during lunch hours. It may be possible to convince your employer to help pay for your education.

Consult Websites and Databases 

There are quite a few websites that allow students to search for possible financial aid of the types listed in this document. Most work just like more familiar search engines (e.g., Google). Vary your search terms based on your own situation and demographics. Some possible search terms may include:

  • “grants for single parents”
  • “scholarships for women/men”
  • “financial aid for teachers”
  • “need based financial aid”
  • “scholarships for Hispanic students”

Below are some excellent websites to get you started:

Professional organizations

Any job that requires a college degree probably has a professional organization associated with it. Weddles maintains an online directory of these organizations that can provide a great start for you.  Once you find an organization in your field of study, search its website for information on financial aid opportunities offered to college students. Give them a call or send an email asking what they may have to offer. While you’re on their site, it also does not hurt to look into joining at the student rate so that you have a good resource for information and networking.

Libraries 

Don’t neglect to visit your local library. It is often helpful to call ahead and schedule an appointment with a library tutor. Let him/her know what you are looking for during the phone call, then, when you arrive, the tutor will most likely have some resources ready for you. It’s also fine to do this at more than one library (e.g., the local community library and the college library).

Step Four: Complete Applications

Although completing applications can be tedious and time consuming, it is well worth the investment. Spending an hour on a scholarship application may result in your getting your education partially or entirely paid for, resulting in higher benefits in the long run.

The first step is to gather copies of all needed information. This will typically include your own, and depending on your age and dependent status, your parents’ most recent income tax form, documentation of any financial circumstances you/your family may be facing, etc. Keep these copies together in a folder and/or electronically scanned into your computer so that they are readily accessible.

Once you find financial aid opportunities you wish to apply for, complete the applications carefully and completely. It’s advisable to double-check this, and it doesn’t hurt for you to have someone else review it as well. Seek help on completing the applications if needed. Local colleges often offer workshops on how to complete some of the major forms like the FAFSA.

Be sure to submit the application, including all required documents in the manner requested, before the deadline. It’s helpful to try to submit the application a day or two early in case something goes wrong. That way you’ll have time to correct it.

Next, seek verification that the application was received. Most organizations will automatically send an email confirming receipt. If they do not, follow up within a few days to make sure your application was received and accepted for consideration.

Finally, keep a calendar of your submissions, when you are supposed to hear back, and what the result is when you do. Keeping track of your progress will help you stay focused and motivated. You should also list when you can reapply for each opportunity and if any follow up is needed. For instance, some forms of financial aid (e.g., employer assistance programs) may ask for a copy of your official transcript at the end of each semester to show that you achieved a certain grade level or GPA.

Final Considerations

Keep in mind that the decision to pursue higher education is yours and that it’s about you. When it comes to financial aid, do what seems best for you. If you are not comfortable taking out loans and you’d rather pay as you go, there is nothing wrong with taking a course or two per semester as you can afford it. Invest in yourself by taking the time to fully explore the financial aid opportunities that may be available to you. You’ll be glad you did.

The Online College Finder

In just 3 easy steps we will help you find the perfect online college you've been looking for.

Get started by: