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Articles / Paying for College / Financial Aid Basics

Jan. 17, 2012

Financial Aid Basics

Financial Aid Basics

Just as in professional sports, there are two levels of participants: rookies and veterans. When it comes to college admissions and all that's related to that complex field, the vets have a decided edge over the rookies, especially in the crucial area of financial aid. The vets have been through the mill at least once, maybe more than once, discovering what sources are available to help pay for the exorbitant costs of higher education.

Pity the poor rookies, though. They have to wade into the quagmire of FAFSAs, CSS Profiles, and possibly private colleges' own detailed applications for financial aid, all without the benefit of having done these before. Of course, there are a number of resources that can help buffer the impact of ignorance. Perhaps one of the best ever is the College Confidential discussion forum's financial aid section. The reason this treasure trove of knowledge is so effective is because of the friendly interface between veterans and rookies. If you know little to nothing about financial aid, you won't be embarrassed asking your questions here. So, I encourage you to spend as much time as you need reading the highly informative and easy to understand answers and comments.



Trying to explain the intricacies of financial aid to a rookie can be frustrating, both for the veteran and the rookie. I'm always on the lookout for efficient ways to do this. That's why I was intrigued by the article I found on the 20sfinances.com site by (simply) "Corey" entitled Different Types of Financial Aid. At least to me, this is the kind of information that I wish I had had access to when I was a financial aid rookie. So, for all of you other rookies out there, let's take a look at what you can expect when you go looking for help paying for college, courtesy of some excerpts from 20finances.com.

Different Types of Financial Aid by Corey

Paying for college can be a challenging task. I am convinced that almost every college students asks him/herself if there is another way they can get money for school. While I think it is important to reduce your spending in college, it is also important to understand the different forms of financial aid that is available. It's essential to understand the differences between them because if you misunderstand a loan for a grant, you could be stuck later paying back that money (and some).

Scholarships and Grants

Scholarships and grants are basically free money. There are many different forms of scholarships or grants. Some are awarded based on financial need, while others are based on merit (academic achievements). While I won't take the time to explain the best approach to obtain scholarships and grants, it is important to understand that this form of financial aid does not need to be paid back. For whatever reason, consider it a gift. While there are certain scholarships that require you to work X amount of hours per week, these are often a great deal ...

Loans

Loans also come in various shapes and sizes. If not already understood, loans require that you pay money back to them with interest. As with any form of a loan, you are given a certain amount of money now with the agreement that you will pay all of the money back with interest in the future. Many people take this route to pay for school because it means that they are able to focus on school and not worry about the stress that may come with figuring out how to pay for school. If you fill out a FAFSA, you will automatically qualify for some form of loan. Some loans do not start compounding interest while others do. It is important to understand the fine print on any loan before you use this method ...

Work Study

Work study is a federal funded job. It is usually an on campus job. While these sorts of positions do not offer the highest salary, it does provide you with extra income that does not take away from qualifying for financial aid in the future. On campus work study positions often provide flexible hours so that you can focus on your studies. If you don't qualify for work study, you may find that it is hard to find employment on campus. Often because of budgetary issues, certain departments can only afford to hire work study students because the wage is funded by the government. If your parents make too much money, you may find it difficult to find a job ...

Payment Plan

While this isn't money in any form, universities often offer payment plans. If you are working while in school and can't afford to pay your school bill all at once, the university's payment plan may be the right option. Often there will be a small fee to buy into this plan, but it is a great service for working students. This allows you to pay your bill over the course of the semester or year. If you know you don't make enough money to keep up the with the payments, make sure to take this into consideration ...

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As a teaser to whet your appetite for the College Confidential discussion forum, here's a good place to start: Does Existing Student Loan Affect EFC? Or how about: 10 Things Financial Aid Offices Won't Say.

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Be sure to check out all my admissions-related articles and book reviews at College Confidential.

Written by

Dave Berry

Dave Berry

Dave is co-founder of College Confidential and College Karma Consulting, co-author of America's Elite Colleges: The Smart Buyer's Guide to the Ivy League and Other Top Schools, and has over 30 years of experience helping high schoolers gain admission to Ivy League and other ultra-selective schools. He is an expert in the areas application strategies, stats evaluation, college matching, student profile marketing, essays, personality and temperament assessments and web-based admissions counseling. Dave is a graduate of The Pennsylvania State University and has won national awards for his writing on higher education issues, marketing campaigns and communications programs. He brings this expertise to the discipline of college admissions and his role as a student advocate. His College Quest newspaper page won the Newspaper Association of America's Program Excellence Award, the Pennsylvania Newspaper Publisher's Association Newspapers in Education Award, the Thomson Newspapers President's Award for Marketing Excellence and the Inland Press Association-University of Kentucky School of Journalism and Mass Communications Inland Innovation Award for the Best New Page. His pioneering journalism program for teenagers, PRO-TEENS, also received national media attention. In addition, Dave won the Newspaper Association of America's Program Excellence Award for Celebrate Diversity!, a program teaching junior high school students about issues of tolerance. His College Knowledge question-and-answer columns have been published in newspapers throughout the United States. Dave loves Corvettes, classical music, computers, and miniature dachshunds. He and his wife Sharon have a daughter, son and four grandchildren.

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