Financial Aid 101: A Guide to FAFSA and Scholarships for College
Applying to college is exciting, but the financial side of it can feel overwhelming. The good news? There are countless resources to help make college more affordable. This introductory guide will break down the essentials of financial aid, FAFSA, and scholarships so you can navigate the process with confidence.
Table of Contents
Financial Aid Overview
What Is Financial Aid?
Financial aid is money to help you pay for college. It comes in several forms:
Grants: Free money that you don’t have to repay (also known as Pell Grants).
Scholarships: Merit-based or need-based awards that also don’t require repayment.
Work-Study: A program where you work part-time on campus to earn money for college expenses.
Loans: Borrowed money that you’ll need to repay, usually with interest.
Why Does Financial Aid Matter?
Financial aid can significantly reduce the cost of college, making it accessible for families from a wide range of incomes. Remember, even if you think you won’t qualify for aid, it’s worth applying. Many schools use the FAFSA to determine eligibility for scholarships or institutional aid, regardless of your financial situation.
FAFSA 101
What Is FAFSA?
The Free Application for Federal Student Aid (FAFSA) is your gateway to financial aid from the government. Submitting it makes you eligible for federal grants, loans, and work-study, and many states and colleges use it for their aid programs.
This detail bears repeating: many states also utilize FAFSA to determine state aid and have their own deadlines depending on where you live.
At the time of this article, the 2025-26 FAFSA is now available. (Even though it's currently 2024, it's labeled 2025-26 because that is the academic year financial aid will apply to. In other words, if you're a senior in high school right now, financial aid will be for your freshman year starting in the fall of 2025.)
How to Complete the FAFSA
Gather Required Documents: Before starting, collect the following:
Your parents' Social Security Numbers if they have them if you're a dependent student (or Alien Registration Number for non-citizens).
A “dependent” student is someone who is considered to be financially supported by their parents or guardians.
2023 tax returns and W-2 forms.
Bank statements and investment records detailing current cash, checking, and savings account balances.
A FSA ID (you'll create one at studentaid.gov).
One or more parents will also need to create their own account depending on the student's dependency status and the parents' marital status.
If you’re a dependent student, use the Who’s My FAFSA Parent? quiz to identify which parent(s) will be a required contributor on your form.
Meet Important Deadlines:
The 2025-26 FAFSA federal deadline is by 11:59 p.m. Central time (CT) on June 30, 2026.
State deadlines will vary, so check the list of FAFSA deadlines by state depending on where you live.
College-specific deadlines: Check with your schools of interest for any university-specific deadlines.
Submit Early: Submitting late close to the deadline could result in less aid than if you had submitted earlier, so prioritize submitting as soon as possible.
How to Correct Mistakes on the FAFSA
Once your FAFSA has been processed, you can still make changes to correct or update your information. You should do so in the following situations:
There's a mistake in what you reported on your form.
Your form says "Action Required" and you need to make a required correction such as adding missing signatures or providing consent and approval.
You want to add or remove schools from your form (note that the online form only allows you to list up to 20 schools. If you're applying to more schools, read our FAQ at the end of the article).
Scholarships
Types of Scholarships
Scholarships come in many forms:
Merit-Based Scholarships: These scholarships reward achievements such as high grades, strong test scores, or talents in areas like art, music, or sports. For example, a student who excels in STEM might qualify for a math or engineering scholarship.
Need-Based Scholarships: Awarded to students who demonstrate financial need. These often require the FAFSA or other financial documentation.
Specialized Scholarships: Based on unique criteria, like heritage, special interests, or uncommon talents. For example, scholarships might exist for students of specific ethnic backgrounds, those living in a specific geographic location, or those pursuing a specific career path.
How to Find Scholarships
Search online tools: Use search engines like Fastweb, Appily, and Scholly to identify hundreds of opportunities. Looking for scholarships is like fishing in the ocean: they're out there, but they're disorganized. Tailor your searches as much as possible to include your strengths or unique qualities.
Local opportunities: Community organizations, high schools, and local businesses often offer smaller scholarships. These are less competitive, but still valuable. Ask your school counselor or people around your community about any opportunities available.
Institutional scholarships: Many colleges offer scholarships based on academic merit, extracurricular involvement, or specific majors. Check your prospective colleges’ websites for details.
Tips for Winning Scholarships
Start early: Give yourself plenty of time to research and prepare applications. Deadlines often creep up during busy academic seasons.
Organize your applications: Keep a spreadsheet of deadlines, essay prompts, and submission statuses. You’re most likely going to apply to a lot of scholarships, so it’s best to keep everything organized.
Write personalized essays: Tailor essays to highlight your strengths and align with the scholarship's goals. Our tip is to leverage any college application essays you may have already written for scholarships.
Meet deadlines: Missing a deadline is the easiest way to disqualify yourself, so follow step #2 and keep track of dates in your spreadsheet.
Prioritize quality over quantity: Focus on scholarships that align with your skills and experiences rather than applying to every option available.
Competitiveness: Scholarships that require no materials will be more competitive than those that require essays because the barrier to entry is lower. In general, that means you may have a better shot at scholarships that require essays because they require more work (most students won’t do it, so there’s less competition).
Comparing Financial Aid Offers
Understanding Award Letters
Once admitted, colleges will send you financial aid award letters. These outline the types and amounts of aid you’re being offered.
Key Factors to Consider:
Grants and Scholarships: These are the most desirable forms of aid because they don’t need to be repaid, as in it is free money! Look closely at how much free money each school offers and check if scholarships are renewable each year or contingent on maintaining a certain GPA.
Work-Study: Work-study programs allow students to earn money while attending college by working. Review the details to understand the hours required and whether the earnings will fully cover your work-study allocation in your aid package.
Loans: Pay close attention to loan amounts and terms because unlike grants and scholarships, this is not free money. Compare interest rates, repayment plans, and whether the loans are subsidized (meaning the government pays the interest while you’re in school) or unsubsidized (you’re responsible for all interest from the time the loan is disbursed). Borrow only what you need.
Net Price: Net price is the estimate of the actual cost you and your family will need to pay in a year for a specific college. Calculate the net price by subtracting grants and scholarships from the total cost of attendance. This figure represents what you’ll need to pay out of pocket or cover through other means, such as savings or loans. Government loans aren’t subtracted in this calculation because you eventually have to pay them back.
Checklist for Financial Aid Success
Now that we've covered financial aid 101, it's time to put it into action. Use the below checklist to make sure you're doing everything required to make college as affordable as possible. Get started now!
Discuss affordability with your family and consider financial safety schools. Understanding how much college will cost and how you can plan to address those costs is critical to making informed decisions.
Complete the FAFSA as early as possible.
Research state and college-specific aid programs.
Regularly search and apply for scholarships.
Review financial aid award letters carefully and compare offers.
FAQs
1. Do I have to complete the FAFSA every year?
Yes. You must submit the FAFSA annually to continue receiving financial aid.
2. What if my family’s financial situation changes?
Update your FAFSA and notify your college’s financial aid office immediately. They may adjust your aid package.
3. Can I apply for scholarships after I’ve started college?
Yes! Many scholarships are available to current college students.
4. How much debt is too much?
Aim to borrow no more than what you expect to earn in your first year of work after graduation. This will require additional work on your part to think about your future career goals and research job salaries, but it’s worth it. Understanding how much debt to expect after college is important because it can help you make an informed decision; otherwise, be prepared for an unpleasant bill that easily could've been avoided with some planning.
5. What’s the difference between subsidized and unsubsidized loans?
Subsidized: The government pays the interest while you’re in school.
Unsubsidized: You’re responsible for all interest from the time the loan is disbursed.
6. FAFSA only lets me add up to 20 schools, but I'm applying to more. What should I do?
First, add 20 of the however many schools you're applying to and send the form. Once you've received confirmation that your FAFSA has been processed, you can go back and remove schools to add new ones. Don't worry, the schools you remove will still have the data you submitted when you first listed that school on the original form. But that means any school you then remove from the list won't have automatic access to new FAFSA information or corrections. So double check that you've provided accurate information or keep track of which schools have which version of information.
But one more thing: applying to 20 schools is a lot. Rarely do we see or recommend students apply to 20+ schools unless they have specific circumstances. Are you sure your college list has intention behind it? If not, check out our step-by-step guide on how to build a college list to make sure you’re applying to colleges that are the right fit for you.