How Does Financial Aid Work?
Financial Aid 101: Understanding the Basics
The cost of a college degree is an important element to consider when looking for the right school. But there's more to the story than just the price tag; financial aid is assistance available at most schools that can help families with paying for their student's education.
Financial aid is a term you hear a lot, but what exactly does it mean? We'll answer the following questions in this section:
- Where does financial aid come from?
- What are the different types of financial aid?
- What does financial aid help you pay for?
- How do you apply for financial aid?
Where Does Financial Aid Come from?
There are several different sources of financial aid, which include the government (both federal and state), colleges/universities, financial institutions, and private organizations (e.g., religious, civic, and cultural groups or businesses). No matter what your current financial situation may be, it's important to check out all possible sources and options to maximize your eligibility.
What Are the Different Types of Financial Aid?
The two most common types of financial aid are gift aid and self-help aid.
- Gift Aid – Usually scholarships and grants awarded to students that do not have to be repaid, unless the student fails to meet certain terms, such as a service requirement, specified as a condition of the award. Gift aid can be awarded based upon many factors, including (but not limited to) financial need; academic excellence; athletic, musical, and theatrical talent; affiliation with various groups; or career aspirations.
- Self-Help Aid – Usually loans (that require repayment) or student employment. Loans can be used to help pay the remaining net costs after gift-aid is deducted. Student employment earnings (including Work-Study awards) are generally not deducted from billed costs but can be used to help cover indirect costs and are paid in the form of wages to the student.
What Does Financial Aid Help You Pay for?
In most cases, financial aid can be used to cover the costs associated with attending a school, as defined in the school-specific cost of attendance (COA). The COA normally includes tuition, fees, books, supplies, and related living expenses (room and board). It's important to note that some types of institutional aid may have specific awarding criteria, and in some cases only be applied to costs directly billed to students (those charges that appear on the student's university bill).
How Do You Apply for Financial Aid?
This is the most important question: What do you need to do to be considered for financial aid?
The answer depends on the school you are applying to. Some schools, like Drexel, ask applicants to complete the CSS Profile to be considered for University grants; in addition, all schools will require the Free Application for Federal Student Aid (FAFSA) to evaluate applicants for federal and state financial aid. Scholarships from businesses, community, and other organizations will usually require a separate application to complete.
Want to Learn More about Financial Aid?
Drexel has detailed information about applying for financial aid on The Finances of Your Education webpage.