Understanding Financial Aid: How to Pay for Your Degree
Many students require financial aid in order to earn their degrees – in fact, according to the National Center for Education Statistics, 85% of all undergraduate students received financial assistance of some kind. Despite this, a significant amount of money earmarked for student financial aid still goes unclaimed every year. This results in students taking out more loans than necessary to cover the cost of education or, worse, causes them to drop out of school altogether.
Whether it’s through unawareness or students doubting their ability to qualify, this trend contributes to the growing national student debt crisis. An estimated 45 million people owe more than $38,000 in student loans, and a borrower goes into default every 26 seconds. Combine this with growing tuition rates – despite the COVID-19 pandemic affecting students and families nationwide – and it's no wonder that more and more people begin to doubt whether college is still worth the cost.
Don't overpay for your education. Here are a few tips on how you can claim some of this free aid.
Submit the FAFSA
The federal government is the largest provider of student aid in the United States. From grants to loans, the FAFSA (the Free Application for Federal Student Aid) is vital for helping many students pay for school. You can begin your FAFSA application online. Even if you think that you don't qualify, still fill it out. You may be eligible for more aid than you think. Don't be like the more than 1.2 million students in 2018 alone who would've qualified for financial assistance, but didn't apply for it.
Pro Tip: You will have to resubmit your FAFSA for every year that you require financial aid, so keep its required documents handy and in a safe location.
Search for State and Local Grants
There’s a difference between grants and loans. Grants are called “gift aid” and are generally viewed as free money. In addition to the federal government, your state and local government could also offer grant programs to qualifying students. There may be specific requirements, such as attending an in-state college, but it could tip the scales toward making your education more affordable.
Pro Tip: Be sure to update your college’s financial aid office whenever you receive additional financial aid.
Search for Additional Scholarships
Scholarships have two sources: your college and third-party organizations. You likely apply for your university's scholarships when you submit your application for admission. That means your best chance of finding more free money comes by searching and applying for individual opportunities. While this may seem time-consuming, the process works if you work it. Remember, scholarships don't have to be paid back, and your future self will thank you.
Pro Tip: Get organized. Creating an efficient system can help you earn more scholarship money. For tips on how to get started, review our College Savings Guide.
For more great tips and best practices on how to avoid overpaying for your education, be sure to subscribe to our Knowledge Base.
