Applying for Financial Aid

School can be expensive. In this section, we’ll help you learn about different types of financial aid and how each one can help you pay for college.

Completing the FAFSA

Completing the Free Application for Federal Student Aid (FAFSA) is a required first step if you want to gain access to federal grants, scholarships, and student loans (including loans from your college or university).

The FAFSA identifies how much in federal grants, work-study and loans you’re eligible for. Remember, grants and work-study are money you don’t have to pay back.

Your FAFSA results also help colleges put financial aid packages together for you based on your ‘unmet need’. That’s the difference between what you can pay out of pocket and the cost of attending college. There’s more about this below.

Let’s get started

To begin the process of applying for financial aid, fill out the FAFSA. You can do this online or using the myStudentAid app, available on the Apple App Store (iOS) or the Google Play store (Android).

The FAFSA asks for lots of information, so you’ll want to gather all that info ahead of time. Use this handy checklist to see what you’ll need to fill out the FAFSA.

You can also save some time by transferring your tax information electronically with the IRS Data Retrieval Tool.

Looking for a step-by-step guide to help you complete the FAFSA? Check out our FAFSA video guides!

What you need to fill out FAFSA

Set aside about 45 minutes to an hour to complete the FAFSA.

Simplify the FAFSA application process by having the following info ready:

  • Your Social Security number (SSN).
    • If you are not a U.S. citizen, you’ll need your Alien Registration number instead.
  • Your parents’ information, if you are a dependent student.
    • If your legal parents are married to each other, or are not married to each other and live together, you should report information about both of them on your FAFSA form.
  • Your driver’s license number, if you have one.
    • You do not need a driver’s license in order to complete the FAFSA. Any other state-issued form of identification will also be accepted.
  • Your income tax information (for the past 2-3 years), or your parents’ income tax information.
    • This includes federal income tax returns, W-2s, and other records of money earned.
  • Your banking information, or your parents’ banking information.
    • This includes checking and savings account balances, interest income, investments, and other assets.
  • Your Federal Student Aid Identification Number (FSA ID).
    • You’ll need your FSA ID to sign your application electronically.
  • List of schools you’re interested in attending.
    • Your FAFSA data will be sent to these schools to help them put together a financial aid package for you.

What happens when you submit the FAFSA

When your application is accepted, you should receive a confirmation email from Federal Student Aid. Here’s what happens next:

  • The Department of Education processes your FAFSA submission, calculates the amount of money you or your family should be able to contribute to your education, and sends you back a summary called the Student Aid Report (SAR).
    • At the same time, they’ll also send your info to schools you’re interested in.
  • Schools will use your FAFSA info to determine how much money you will need to attend and how much money they can give to help meet your need.
  • Your schools will then send you this information in financial aid offers via email or mail.
    • Check your school’s website to see when this information will be sent.

What comes after submitting the FAFSA

There’s still work to be done after you complete the FAFSA:

  • Weigh your financial aid offers when you get them.
    • You can accept all, some, or none of the money that colleges offer you.
  • Start searching for other scholarships.
    • Try to find and apply for as much money you can get that you don’t have to pay back!
  • If necessary, complete your FAFSA verification.
    • Sometimes, the Department of Education and some schools select FAFSAs to verify their accuracy. If your FAFSA is selected for verification, provide them with the info they need as soon as possible. This speeds up the process and helps you avoid losing any financial aid offers.
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Know your money: The types of financial aid

Financial aid typically comes in two forms: money you have to pay back, and money you don’t have to pay back.

Financial aid that you don’t pay back

This is what you want to aim for.

This kind of financial aid won’t increase your debt, won’t have interest payments, and won’t have to come out of your paycheck when you start working.

Scholarships, grants, and federal work-study programs are examples of “free money” for school. Work with your school’s financial aid office to stay current on what’s available and be sure to apply for these early and often.

Scholarships and grants

Scholarships and grants should be the first source of money you consider when planning how you’ll pay for college.


There are two types of scholarships: institutional and private.

Institutional scholarships are given by colleges and universities. The amount they give you is often based on your academic skills and your need. Contact your school for a list of scholarships available to you.

Private scholarships are awarded by private foundations, companies, and service groups.

The amount they’ll give out varies. Check with your financial aid office to learn your school’s policy on private scholarships.

Remember: when you apply for scholarships, you’ll need to distinguish yourself from potentially tens of thousands of other applicants. Let your unique story shine!

If you need help finding for scholarships, visit CollegeBoard’s Scholarship Search Tool.


Federal grants are “free money,” like scholarships. They don’t need to be repaid, and they’re limited to a certain number of applicants.

Federal grant awards are based on your FAFSA information, including when you apply, your financial need, and the level of available funding at your school.

Some federal grants include:

Federal Work-Study

Federal Work-Study is offered to undergraduate or graduate students with financial need as a way to earn money through part-time jobs on- or off-campus, allowing them to earn extra income to pay for college expenses.

If you decide to accept Federal Work-Study, be aware that you’ll be trading time you could be using to study or attend classes for time spent working to earn your financial aid.

To see if you qualify:

  • Submit your FAFSA and indicate on your application that you want work-study assistance.
  • Check with your school, because not every college has a work-study program.

Federal Work-Study opportunities can offer benefits beyond reduced college costs. Flexible work hours, work experience and contacts, and job locations on or close to campus.

Financial aid that you have to pay back

You’ll want to avoid these as much as possible.

If you have to, apply for government loans first. The interest rates, interest payment schedules, and grace periods are going to be in your favor.

Speaking of government loans, it’s important to know the difference between subsidized and unsubsidized federal student loans.

Whether you can get an unsubsidized or subsidized Federal Student Loan is determined from your FAFSA information (so, unfortunately you don’t get to choose).

In short, though, subsidized loans are less expensive because interest does not accrue on your loan until six months after you stop attending at least half-time. Interest on unsubsidized loans starts accruing right away so by the time you start paying the loan back, you owe more than you originally borrowed.

Private student loans that aren’t from the government are also available, but are less favorable than government loans.

Federal loans

The way it works is pretty straightforward:

  1. US Department of Education lends you money for college.
  2. Your school delivers the funds you borrowed to pay for your tuition, fees, and other expenses.
  3. After college, you repay the money you borrowed, typically in monthly payments with interest.

You should always try to avoid borrowing more money to go to school, but if you have to borrow, always start with federal loans.

Accept subsidized loans over unsubsidized loans, and remember that federal loans are better than private loans in a lot of ways, including a variety of repayment programs.

Private loans

Only consider private loans if you’ve used up all your opportunities for scholarships, grants, work-study, and federal loans (if they are available to you).

Here are a few reasons private loans are less favorable than other forms of financial aid:

  • Most private loans require what’s called a credit check, which means the lender will look at your borrowing history and determine how you handle credit before they decide whether or not to give you the loan.
  • Private loans are unsubsidized. While federal loans are sometimes unsubsidized, there are at least some that are subsidized.
  • Private loans generally come with fewer benefits, stricter terms, and higher interest rates and fees.

Sometimes, total unmet need may not be covered by other financial aid and federal loans. In these cases, borrowing private student loans may be better than resorting to options like credit cards or other forms of high-interest debt.

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Comparing financial aid offers

First things first. Your school’s financial aid package may not cover the entire cost of your education.

There will be a ‘gap’ amount, or ‘what you owe out-of-pocket’ which is the amount you are expected to pay in addition to any federal or schools loans, scholarships, grants, and work study you’re eligible for.

That said, when you’re comparing your financial aid offers, remember that you don’t have to accept all of the financial aid you’re offered.

Take all the free money first (scholarships, grants, and work-study), but be sure to understand if there are any strings attached like GPA requirements.

Then, evaluate the loans you’re offered. Typically you’ll want to select the federal loans first because they usually have the best terms.

After you’ve selected any federal loans you want to accept, check out any loans offered by your school on your financial aid offer letter.

Your financial aid offer letter may also have some new terminology.

  • Net price = (Your estimated cost of attendance) – (Your scholarships and grants).
  • What you owe out-of-pocket = (Net price) – (Any loans you receive).

The amount you ‘owe out-of-pocket’ will vary from school to school. Take that into consideration, along with how you want to cover those costs, when determining which school to attend.

Whatever you decide, focus on forms of financial aid like private scholarships and grants or a part-time job over taking out additional loans.

The important thing, though, is to make it work for your situation now, and in the future, so you don’t have any more student loan debt than absolutely necessary.