What is Financial Aid?

What is Financial Aid?
Financial aid consists of funds from federal, state, college or university, and private organization sources. These funds come in the form of grants, scholarships, loans, and part-time employment.

Grants and scholarships are often referred to as "gift aid" because they typically do not have to be repaid, as long as all eligibility and use agreements are kept.

Loans do have to be repaid, though there may be "forgiveness" opportunities for some loans, and many loans can be deferred, so repayment would not start until one leaves school. Student loans are at very favorable interest rates compared to other loans.

Part-time employment may be funded through state or federal work-study programs. (Of course a student can find his or her own employment without these programs.) Studies have shown that students who work part-time (under 20 hours a week) tend to do better academically than students who do not work.

Managing Student Debt
By maximizing "gift aid" (grants and scholarships) and income from part-time work, students can reduce the amount of money they need to borrow (loans) and thereby be in a better position financially when they leave school.

Apply Each Year
Students apply for financial aid funds each year using the Free Application For Federal Student Aid (FAFSA). The application asks about income assets and other information to determine eligibility for funds. Most funds are based on financial need, and are offered on a first come first serve basis. Students are encouraged to file these forms starting October 1 prior to the Fall term at the school they are interested in. Late applicants may lose the chance to receive certain funds.

Satisfactory Academic Progress
The student must meet all the academic standards for the school being attended, and must meet the detailed Satisfactory Academic Progress requirements published by the financial aid office of the school.

Communication
Close communication between the student and the financial aid office is very important so that financial aid administrators become aware of any changes to the student's academic plans, and so that students are apprised of all requirements.

Communication is also necessary to make sure forms and documentation are complete and received on time. Financial aid administrators usually cannot process applications that are incomplete.