A Beginner’s Guide to Applying for College Financial Aid

You have many options when it comes to finding money for college. Whether you take out a loan, get a scholarship or grant, or participate in a work-study program, there's a lot you need to know. Here are the basics.

There are several types of financial aid you could be eligible for. A majority of aid falls into two categories: need-based or merit-based. You can receive aid from the government (both federal and state), your college, and from other organizations. Financial aid can be categorized into that which needs to be repaid and aid that doesn't need to be repaid. The Federal Student Aid website has detailed information on both types, including grants, several types of loans, and campus-based programs.

The Federal Student Aid site explains how your college's financial aid office calculates how much aid you'll get:

The financial aid staff starts by deciding upon your cost of attendance (COA) at that school. They then consider your Expected Family Contribution (EFC). They subtract your EFC from your COA to determine the amount of your financial need and therefore how much need-based aid you can get. To determine how much non-need-based aidyou can get, the school takes your cost of attendance and subtracts any financial aid you've already been awarded.

You need to apply for aid before the financial aid office can determine how much you'll get. Here's how to prepare.

Gather Your Paperwork and Information

Get together all relevant information and paperwork needed to complete your applications. What you need will vary by application, but this FAFSA checklist is a great start:

  • Your Social Security Number
  • Your Alien Registration Number (if you are not a U.S. citizen)
  • Your most recent federal income tax returns, W-2s, and other records of money earned. (Note: You may be able to transfer your federal tax return information into your FAFSA using the IRS Data Retrieval Tool.)
  • Bank statements and records of investments (if applicable)
  • Records of untaxed income (if applicable)
  • A Federal Student Aid PIN to sign electronically. (If you do not already have one, visit www.pin.ed.gov to obtain one.)

If you are a dependent student, then you will also need most of the above information for your parent(s).

If you apply for grants or scholarships, you may also need:

  • Transcripts (for GPA proof)
  • Letters of recommendation
  • Essays

Make it easier on yourself by gathering everything beforehand so you don't waste time searching for paperwork as you go through the application process.

Go Over Your Options

Now, figure out what you actually qualify for. This will save you time since you can focus on financial aid you're likely to receive. Some common sources of financial aid include FAFSA, scholarships, grants, student loans, and work-study programs.

Even though you might not think you need to, you should always fill out the Free Application for Federal Student Aid (FAFSA) because that's the only way to know what you qualify for. Some resources you can use to search for other aid options are:

Once you figure out your options, decide which of them you want to pursue by prioritizing them.