The 411 on Financial Aid

financial aidWe all hope our kids get into a top-notch college. But then we panic, realizing that if they do, we will never be able to afford it. The price tag of colleges can seem so daunting, so take-your-breath-away high, that it can make you wonder if the only people who can afford it are the so called “1 percent.”

While we advocate saving early and often, I want to reassure you that you, yes, you, can afford these colleges that seem so out of reach. How? Two words: Financial Aid.

The key is to understand the financial aid process and to file the necessary applications.

To the Rescue: The Two Types of Financial Aid

There are two basic types of financial aid: need-based and merit aid.

Need-based is aid granted to students who require financial help to attend college based on their families’ income. Need–based aid is most often distributed in grants and scholarships, which means that it is money that does not have to be repaid.

You will find out if you are eligible for state and federal monies, loans and some private scholarships by filing the application for FAFSA: Free Application for Federal Student Aid.

An additional application, the CSS PROFILE, may be required at some private colleges. The CSS PROFILE assesses eligibility for financial aid from sources outside of the federal government.

If your child is a senior in high school file these applications ASAP. The information will be sent directly to college financial aid offices.

Merit aid is based on student accomplishments and not based on financial need. These accomplishments might include a high grade point average or exceptional talent in athletics, visual and performing arts or debate, for example. Merit aid at private colleges is often given to students who exceed the GPA and test scores of the average student.

In addition to aid that your college might give, many organizations give scholarships to students in their community. These scholarships are essentially “free money” and can be either need or merit based.

A great resource is, which is one of the largest free scholarship search databases online. You’ll also want to become BFFs with your school counselor to find out about all the many possibilities that are out there.

And while there are a host of local, state and national scholarships available, be wary of potential scams. A good rule of thumb is that financial aid and scholarship sources should not charge.

Loan Rangers

While no student wants to leave college with a mountain of debt, college loans may be necessary to help finance an education. The U.S. Department of Education offers subsidized loans that waive the interest while you’re in school and for six months afterwards.  Students should maximize these loan options before accepting loans from private lenders. Parents can also take out PLUS loans, which have a favorable interest rate, to help their child attend college.

The bottom line is that the high price tag of colleges shouldn’t discourage you or your child. It can take some sleuthing and a lot of organization, but financial aid helps make college available and affordable to everyone.

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