The Scoop: College Financial Aid

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College is expensive. And most parents and students are concerned about how they will pay for it. Pretty much everyone knows you can get loans and that scholarships are out there, if you look for them. But a report that came out last week from the New America Foundation gave some concerning statistics about prospective students “Familiarity with Financial Aid“. In these surveys we learn:

  • Nearly half of prospective students with a household income of less than $50k were unaware of Pell Grants, even though 92% of students whose household income was in that range received Pell Grants.
  • More than half of students had never heard of the federally-mandated Net Price Calculator (NPC). Only 14% of students said they had used it, and 84% of those who used it said it was helpful.
  • Nearly a quarter of prospective students were unsure if they would receive any financial aid. They weren’t even sure if they qualify, even though the costs of college and availability of financial aid are some of the most important factors to consider in considering college.
  • The types of financial aid and the percentage of students familiar with them are: Scholarships received from a college (82%), student loans (79%), state scholarships/grants (61%), Pell Grants (44%), tax credits/deductions (35%), Federal Work-Study (34%), VA education benefits (29%), Supplemental Educational Opportunity Grant program (27%)

So let’s now discuss how to find out if you qualify for college financial aid, some of the types of financial aid available, and where you can go for more information.

Free Application for Federal Student Aid (FAFSA)

In 2013, 47% of high school graduates didn’t complete the FAFSA form. According to NerdWallet, this means $2.9 billion in free federal grand money went unclaimed. Money, in the form of Pell Grants, that doesn’t need to be paid back. It’s not a loan. It’s free money to help you get a college degree, which leads to earning more wages, which is followed by paying more taxes. That’s the way you pay it back. It’s money the government invests in your future. The maximum amount that will be awarded for the 2015-16 school year is $5,775. Since it is awarded on a first come, first served basis, your chances of getting the maximum are much higher if you file early. You can file as early as January, but be sure to check the deadline required by the college you plan to attend. There are federal, state and college deadlines you need to adhere to.

Another thing to remember when filling out the FAFSA form is don’t give too much financial information! According to GoodCall

Since a lot of financial aid is need-based, it’s in the best interest of parents and students to make sure their financial information is accurate on their application – particularly if they use aggregation software to get a full picture of their net worth.  According to Jeff Rossi, founder of Peak Wealth Advisors, people often inadvertently add value to their FAFSA application by including the savings in their retirement account or listing their home as an asset. “The more assets you have, the less the need is going to be,” says Rossi. “FAFSA doesn’t want to know your retirement plan.”

FAFSA is used to determine eligibility not just for pell grants, but also for federal loans and work-study funds. It calculates how much you can afford to contribute–20% for students and 5.64% for parents–and what aid you are eligible to receive from the federal government. The FAFSA is used to come up with the Expected Family Contribution (EFC) amount. Unfortunately, one of the formulas the government uses to come up with the EFC has changed drastically over the past few years and this change has affected middle-income families the most, reducing the amount of aid a student is eligible for.

Net-Price Calculator (NPC)

Every college who uses federal aid is required to post a net-price calculator on their website. It should help calculate the net-price of attending that college. Net-price is defined as cost of attendance (tuition and fees, room and board, books and supplies, and personal expenses) minus grants and scholarships. It helps you estimate your expected family contribution, though the income brackets are usually pretty broad and not highly accurate, and gives you an idea of financial aid packages available at the college you want to attend.

Some colleges don’t make it easy to find on their websites and you have to dig around. But since it’s required by law, it’s there somewhere and it will help you in making your decision as you compare the costs of attending various colleges.

Pell Grants

Pell Grants were discussed under FAFSA above, but you need to know a few more things about it. It is the largest source of federal funds for college and is in addition to any scholarship you may receive. Meaning, if you have a scholarship that pays all of your tuition, the Pell Grant is given to you on top of that. A scholarship, or any other student aid, does not affect how much you receive in Pell Grant aid.

You can use the Pell Grant to pay for any costs associated with attending college, including textbooks, housing or food. The college will decide how to disburse the funds, first applying it to tuition, fees and, if you live on campus, room and board. The leftover will then come to you.

Keep in mind, however, you cannot receive a Pell Grant for more than 12 semesters and it is only awarded to undergraduate students. Click here for more information.


If you have ever attended a scholarship awards night at a local high school it seems like the same few kids receive all the scholarships. They are called up over and over again, $500 here, $1,000 there, in addition to receiving full-ride scholarships to the college they are attending. It just doesn’t seem fair! But there are lots of scholarships available out there. You just need to be diligent in finding them.

Kiplinger has a list of 11 Top Sources of College Scholarships. These include:

  1. Online Scholarship Finders like Fastweb, and other places. Another one they don’t mention that we like is GoodCall. Most of the scholarships these websites tell you about are annual awards, that you can reapply for each year. Some require certain majors, have geographical restrictions, GPA restrictions or are need-based. Most are available to undergraduates, with some available to graduate students. Many have no restrictions of any kind, just that you need to be attending college. Many do, however, want you to write essays.
  2. Colleges and Universities have scholarships available. There are various eligibility requirements and deadlines. Check with the school for a list of all available scholarships and be sure to apply for all you are eligible for. Some schools automatically consider merit based scholarships for all applicants.
  3. Employers sometimes have scholarships available to not only employees but to employees children and sometimes even extended family. Ask your family if their place of employment offers scholarships. Many people don’t even know the scholarships are available and it doesn’t hurt to ask.
  4. Religious Organizations, such as the United Methodist Church, offer scholarships to active members. Check with your place of worship. If they don’t, they may know of local scholarships available to members of your faith.
  5. Your Community usually has scholarships available. The local PTA, Lions Club and other organizations often give them out to local high schools. The high school guidance counselor should know of local scholarships and how to apply. These are the ones that seem to go to the same group of kids on awards night mentioned earlier. But you never know. Doesn’t hurt to try!
  6. Your High School and Elementary School will sometimes have scholarships available. I was asked by the elementary school PTA to help choose which high school senior applicant to award the $500 scholarship we had available.
  7. Your Hobbies. Name your hobby and you may find there is an obscure scholarship available for it. Boy Scouts of America, Girl Scouts, duck calling, competitive eating–these are just a few of many scholarships available because of what you like to do with your free-time.
  8. Your Academic Interests could lead you to a scholarship. You don’t always have to pursue a major to apply for a scholarship in that field. Being in a club or part of, for example, National Honor Society, can lead to you applying for one of their scholarships.
  9. Companies and Philanthropic Foundations offer high-value scholarships. There are usually more people trying to get these scholarships, but they often have higher award money available.
  10. Contests and Sweepstakes don’t require essays and aren’t need-based. They are usually random chance and all you have to do is put your name in to enter. Be careful, though. If you have to pay money to enter, it’s a scam.
  11. Yourself. Look in the mirror and you may see opportunities for scholarships. There are scholarships available for everything from race and ethnicity to physical traits, such as your height. What sets you apart? Do you have a parent with a disability or is a veteran? There are scholarships for that.

When it comes to financial aid for college, get informed. Don’t give up. In the survey mentioned in the beginning, among those who tried to find information, 63% felt it was difficult to find. Most students found out about financial aid from their high school guidance counselor, online search engines or college/university websites.

Single Parents Returning to School

If you are a single parent returning to school, our friends at The Simple Dollar have a guide made just for you. Check it out!

The Bottom Line

Financial Aid is available for college, if you are aware of the different types of aid, how to apply for it and where to go for more information.

What do you think?

Written by Lisa Jennings

Lisa has been helping people create budgets and get their bank accounts in order for over 15 years. As a conference speaker and presenter at financial events, Lisa enjoys helping people get their finances under control. You can reach her at


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