How to pay for college: A 5 step guide to financial aid

Estimate your education costs, understand the different options to pay for them, and become more financially ready for college.

Step 1: Complete the FAFSA

Submit your Free Application for Federal Student Aid (FAFSA) for access to billions in federal grants, loans, and work-study funds available for college.

Here’s how it works:

• Set up your Federal Student Aid ID (FSA ID) to access, complete, and submit the FAFSA.
• Submit your FAFSA early, and you may secure early funding. You can submit as early as October 1 for the next school year.
• You should receive your Student Aid Report (SAR) within 3 weeks of submitting your FAFSA. When you receive it, verify that it is correct and complete.
• You’ll need to fill out the FAFSA each year that you plan to attend college.

Completing the FAFSA may make you eligible for student aid including:

• Grants: Provide needs-based aid to undergraduate students. The money doesn’t have to be repaid (unless you withdraw from school before finishing an enrollment period).
• State aid: Primarily available if you attend college in your state.
• Institutional aid: Provided by public and private colleges to help their students pay for tuition and fees.
• Federal work-study programs: Offered by colleges to help their students earn money by working part-time.
• Federal Direct Loans (subsidized and unsubsidized): For undergraduate and graduate students attending college at least half-time. Loans must be repaid.

Remember these important dates and information for filing your FAFSA. You can submit your FAFSA as early as October 1. Individual state and school deadlines may apply.

Step 2: Apply for college scholarships

With our Scholarship Resource Center, you can access billions of dollars in higher education funding and get the strategies and tools to successfully navigate them.

Our Scholarship Resource Center empowers you to:

• Uncover available scholarships from leading directories
• Discover scholarship opportunities for diverse students
• Get top tips for winning scholarships, from real recipients
• Learn how to avoid common scholarship scams
• And much, much more

Use these tips:

• Make the time. Set aside a dedicated amount of time each week to research, apply for, and check the status of your scholarships.
• Master the essay. Application committees look for what sets you apart, so craft your essays around what inspires you.
• Get an editor. Ask someone to review your applications for grammar and flow.
• Consider who you know. Some workplaces and civic groups offer scholarships, so ask family and friends if they have connections.
• Remember that small amounts add up. For every $20,000 award, there are thousands of smaller awards that receive far fewer applicants.
• Ask your college. If you know where you’re going to college, check with their financial aid office for help with your search.

Step 3: Estimate and compare your total costs

Use the Net Price Calculator (NPC) at each college’s website to estimate your total college costs at that school based on your personal situation. Then, compare the costs, options, and opportunities at different schools.

Here’s how it works:

• Go to a college’s website to use its NPC.
• Enter the required data.
• See the estimated costs for one year at that school.
• Find out what financial aid may be available.

Keep in mind that the estimate of one school’s calculator may be different from another school’s because of the data requested. For example, one school may ask for your parents’ income range, while another may ask for the specific dollar amount of their salaries.

Use these tips:

• See how your total cost might change with different variables like living on campus, off campus, or at home.
• Visit College Scorecard to get a more informed view of a specific school, including costs.

Step 4: Determine if you need additional money

Once you get an early estimate of your costs and receive award letters from schools you’re considering, you can determine your actual college costs. Your award letter outlines how much you can expect in grants and financial aid from a school based on your FAFSA. Evaluate each award letter carefully to see how your expenses may vary from one school to another.

Weigh your options:

• Carefully consider all your choices before selecting a financial aid option.
• Award letters provide the maximum amount of aid a school can offer you, so if you’ve received enough funds through other sources, you can scale the offer back.
• If you still have additional expenses, low-cost federal loan options or private student loans may help.

Step 5: Explore additional financing options

Your family’s circumstances and preferences will help determine what options may fit your situation. Crunch the numbers and, if needed, apply for additional financing to help pay for college.

Consider these options:

• Tuition payment plans. These plans may be available by colleges to help you pay tuition in interest-free monthly installments instead of one lump sum at the start of the semester.
• Federal Direct PLUS Loans. These student loans, offered by the federal government, are available to graduate or professional degree students and parents of dependent undergraduate students who do not have an adverse credit history.
• Private or alternative student loans. These credit-based student loans may be available for undergraduates, graduates, professional degrees, or qualified certificate or licensure programs. There may also be financing options available for anyone (such as a parent or relative) who may be interested in borrowing to help you pay for college. These loans are provided by banks or other lenders.

Use these tips:

• Research all financing programs carefully by comparing eligibility requirements, interest rates, loan costs and fees, repayment options, and monthly payments.
• Line up a cosigner who may help you qualify for a private student loan. A cosigner can be a family member, friend, or anyone who meets the eligibility requirements. However, a cosigner is not required in order to apply.
• Ideally, your total student loan debt shouldn’t exceed the salary you expect to earn your first year working after college. Estimate your post-graduation salary at the U.S. Department of Labor website.
• While the Federal Direct PLUS Loan terms are the same for every borrower, private student loan terms vary by lender based on your financial situation and credit. Be sure to understand the pros and cons of each financing option before you make a choice.

Important Financial Aid Dates

Set calendar reminders:

• Stay on top of deadlines for scholarships, grant applications, and your FAFSA.
• Check with your school counselor and college for other important deadlines.

August - September

• Download the Get College Ready SM Planning Guide for financial information and guidance to help navigate the college planning process, available in English and Spanish.
• Start your scholarship search at our Scholarship Resource Center.
• Get an estimate on your federal student aid eligibility with the FAFSA4caster.
• Compare estimated college costs and aid availability with the NPC tools of your top colleges.

October

• Get your Free Application for Federal Student Aid.
• Complete your FAFSA as soon as possible after October 1 every year you plan to attend college.
• Check if your college requires you to complete additional aid applications.

November - May

• After you receive your Student Aid Report (SAR), carefully ensure all information is correct and complete.
• Be on the lookout for financial aid award letters.
• Review and compare award letters to determine whether awarded financial aid and family resources cover college costs.
• Apply for additional financing, if needed.

June – July

• Keep track of all your college bills and make sure costs are covered by financial aid and family resources.
• Double-check to make sure you have the money you need to cover college expenses.
• Be sure to pay all your college bills on time to ensure you can sign up for classes, get a dorm room assigned, etc.

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