Understanding Financial Aid for College: What Should I Know?

As a high school junior planning for college, I'm trying to figure out the financial aid process. What key things should I be aware of to make the most of financial aid opportunities available to me?

First and foremost, remember that financial aid aims to make college affordable for students who might otherwise not be able to attend due to financial constraints. Financial aid can come in various forms, including loans, scholarships, grants, and work-study programs.

1. Understand the difference: Loans need to be repaid over time, typically with interest. On the other hand, scholarships and grants are funds you do not need to pay back. Work-study programs provide part-time employment to help meet your financial needs.

2. Start with FAFSA: The Free Application for Federal Student Aid, or FAFSA, acts as a gateway to most types of financial aid, including both federal and state opportunities. Apply as soon as it opens (October 1) for your senior year as some aid is distributed on a first-come, first-served basis.

3. Student Aid Index (SAI): The SAI was previously called Expected Family Contribution. FAFSA uses the information you provide to compute your SAI, and colleges use it to determine your financial need. A lower SAI means higher financial need, potentially increasing your aid amount. Note that the SAI can be as low as negative $1,500, and it's not divided based on the number of students in college within a family.

4. School-specific financial aid: Many universities also require their own financial aid applications, often through the College Scholarship Service (CSS) Profile, which can consider additional factors FAFSA doesn't.

5. Understanding aid packages: Schools will provide a financial aid package outlining all the aid you’re eligible for, including grants, loans, and work-study. Remember to decipher each part of the package. The "net price" (direct cost minus gift aid) will give you an estimate of what you have to pay out-of-pocket or through loans.

6. Apply for scholarships: There are thousands of private scholarships available. Start preparing for these early, as many have deadlines in fall or early winter. Also, review the scholarship policies at the colleges you're applying to—each has different policies for how private scholarships affect your financial aid package.

7. Applying Early Decision and financial aid: If you're applying Early Decision to schools (a binding agreement), make sure those schools are affordable. Use the school's net price calculator to get an estimate of the expected financial aid package. Applying ED is a financial commitment, but an inadequate financial aid award can make it possible to back out of the ED agreement.

8. Communicate special circumstances: If you have any special circumstances that might impact your ability to pay for college (e.g., medical expenses, job loss, etc.), let the financial aid office know.

Ensure you understand your financial aid package thoroughly before committing to a college. Feel free to ask the financial aid office if you have any questions. They are there to assist you. Good luck with your college journey!