How Does Financial Aid Work?

Billions of dollars of financial aid are available to students who need help paying for college. If you want this assistance, it’s important that you determine your eligibility and apply on time.

Watch this 3-minute video about financial aid, scholarships, and the costs of college.

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What is financial aid?

Financial aid is money that helps pay for college. Financial Aid may include grants, scholarships, work-study, and loans. For most students, financial aid is essential to making college affordable.

About two thirds of college students receive financial aid based on their family’s financial circumstances. This type of financial aid is sometimes called “need-based.” To apply for need-based financial aid, most students will need to submit the Free Application for Federal Student Aid, also known as the FAFSA . You may also need to complete the CSS Profile - check the list of schools that use CSS Profile.

These applications are used by the college and government to determine your eligibility for different types of financial aid that can help lower the cost of attending college. You can also receive financial aid from other sources, including local and national scholarship organizations and merit-based scholarships, which are awarded based on your achievements, talents, and other characteristics. Scholarships and grants are free money that does not have to be repaid. Loans are money you or your parent may borrow and must be repaid, usually after you graduate or stop attending school. We recommend that all students apply for financial aid, so you know what your options are.

How do I apply for financial aid?

You apply for financial aid by completing the financial aid applications required by the colleges you’re interested in. The FAFSA and CSS Profile are web-based applications that require you to provide demographic, financial, and other information about you and your family. Learn how to complete the FAFSA and how to complete the CSS Profile.

There may be additional financial aid forms for you to fill out. Depending on your state, you may have a separate application to apply for state-based financial aid. Colleges may also have additional forms for you to fill out to access institutional financial aid. The best way to determine what you must submit is to check each college's financial aid application requirements. Completing all the required forms will help ensure you get the financial aid you deserve.

When do I apply for financial aid?

The FAFSA and CSS Profile both become available on October 1 every year. If you are a senior in high school, you should fill out your required financial aid applications in the fall of your senior year. If you’re already in college, you probably have later financial aid deadlines, but we recommend submitting financial aid applications as soon as possible. Remember, you need to apply for financial aid every year you plan to attend college.

What is the Expected Family Contribution (EFC)?

After you complete your FAFSA, you will receive a Student Aid Report (SAR). The Student Aid Report is a summary of your application details. Make sure all your information is correct and view your expected family contribution (EFC) . Your EFC is a number that college financial aid offices use to determine how much need-based financial aid you will receive if you attend their school. The information you provide on the FAFSA determines your expected family contribution.

Your expected family contribution is a measure of your family’s financial resources and circumstances. An expected family contribution of $0 means your family has few or no resources to pay for college, while a higher expected family contribution means that your family is expected to have resources to help pay for college. A low expected family contribution also means that you are eligible for more need-based aid. For example, the Pell Grant is a common grant provided to students with lower expected family contributions.

It’s important to note that your expected family contribution is not the amount you will pay out of pocket to the college. The amount you pay directly to the college depends on the amount of financial aid you receive and the amount the college charges you for tuition, fees, and other expenses.

So, even if you believe that you may be ineligible for financial aid based on your family's income, you should still apply to see what you can receive.

What happens after I apply for financial aid?

Once you have submitted the FAFSA (and CSS Profile if required), you’ll receive a financial aid offer from each college that has sent you an acceptance. The financial aid offer will show how much financial aid you are eligible to receive. Costs between colleges may vary and financial aid awards may vary. Be sure to review each offer carefully to fully understand the types of financial aid, any conditions of receiving your awards, and if the total amount of your aid will cover your college expenses. After you have committed to a college, the money from your college’s financial aid offer will automatically be applied to your college bill. If you are receiving any other outside scholarships or private loans, be sure to reach out to your scholarship or loan provider to find out how that money will be distributed to your college.

Financial aid is often what makes college affordable for many students and families, so it’s important to apply for financial aid early and look into all of your options to lower your college costs. Take a look at our Options to Pay the College Bill article for more information.


How many college students get financial aid?

Millions of students receive financial aid each year. In 2021-22, undergraduate and graduate students received a total of $234.6 billion in student aid in the form of grants, Federal Work-Study, federal loans, and federal tax credits and deductions.

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Can I afford to go to college?

Despite the news stories about rising college prices, a college education is more affordable than most people believe. Many colleges provide an excellent educational experience at a price you can manage. Public college prices are much lower than you might expect, and many private nonprofit colleges provide generous grants and scholarships to offset published costs.

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Does applying for financial aid hurt my chances of being admitted?

You’re usually admitted based on your academic performance and the qualities you bring to the campus community. Colleges want to admit a diverse group of students and often use financial aid to achieve that goal. It’s crucial that you apply for financial aid early in the application process before all of a college’s funds are allocated.

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Do I qualify for aid even if I don’t get straight A’s?

It's true that some scholarships are awarded based on academic performance. However, most financial aid is based on your family’s financial information provided on an aid application, typically the Free Application for Federal Student Aid (FAFSA®).

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Are private colleges out of my reach?

Although the cost of college is an important factor, focus instead on finding a college that is a good fit — one that meets your academic, career, and personal needs.

You don’t have to rule out “expensive” schools. Keep in mind that private colleges usually offer generous financial aid to attract students from every income level. Plus, financial aid can come from different sources such as scholarships, grants, and loans--so think about net price (not published price), and don’t be afraid to apply to colleges you think you can’t afford.

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Is my family’s income too high to qualify for aid?

Financial aid is intended to make college available to students from different financial backgrounds. Family income, the number of family members in college, medical expenses, and other factors may be considered when determining your financial aid eligibility. Even if you think your family income is too high for you to qualify for aid, fill out the Free Application for Federal Student Aid. This form determines your eligibility for federal and state student grants, work-study, and federal loans.

The best way to get an estimate of how much financial aid a college will offer you and therefore how much you’ll really pay to go to that college is to use the college’s net price calculator. Colleges provide these tools on their websites. Net price calculators give you an estimate of your net price for a particular college (i.e., the cost of attendance minus the gift aid you might get). Learn more about net price.

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Should I work while I’m attending college?

Students who attempt to juggle full-time work and full-time studies may have difficulty completing their academic programs. However, students who choose to work a moderate amount often do better academically. You may find that working in campus jobs related to your career goals is a good way to manage college costs, get experience, and engage with the university community.

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Can I try to get my aid award revised?

Some colleges are willing to review your financial aid package if your financial situation changes. Consider discussing these changes with the financial aid office if your family has experienced an unexpected decrease in income or increase in expenses since you applied for financial aid.

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