Financial Aid - A Complete Guide

If you are looking for a complete guide to Financial Aid, you've arrive at the right place. This article aims to answer queries such as what exactly is financial aid, its eligibility criteria, deadlines, availability of aids, how much will be awarded among others. Read On..

TCM Staff

30th September 2020

 Most students have several inquiries regarding financial aid such as what exactly is financial aid, its eligibility criteria, deadlines, availability of aids, how much will be awarded, and many more which are explained briefly in this article.

The short and quick answer is that it is something useful to pay for your education. Do not be under the assumption that you are not qualified for aid. Also, do not have a misperception about the aid that it is given only to underprivileged students.

If you are dependent on your parents or guardians, it is quite obvious that even they will have a number of questions regarding the aid considering their financial situation.

This article is a complete guide to financial aid.

Table of Contents: 

  1. FAFSA
  2. CSS profile
  3. IDOC

What is financial aid?

It is defined as the monetary support or assistance given to scholars either by the state government or by the college in order to pay for their tuition. In simple words, it is something that helps you pay for your education.  

Nothing should stop a student from learning and being financially unprivileged should definitely not be the reason. Thus, to help such students these aids came into existence.

Basically, it is offered in the form of college scholarships, grants, loans, and other alike programs. The funds obtained can be utilized not only for tuition but also to pay for rooms, books, boards, and other necessary supplies. 

There is a provision to compare two or three colleges with respect to the financial aid they are offering which can be done using a financial aid award letter. 

It is important to note that there are differences between scholarships and grants

What are the different types of financial aid?

Before understanding the types of financial aid, it is even more important to exactly know what are need-based aid and merit-based aid. 

Need-based aid is funding given to the students who are finding it difficult to afford for the college and the amount to be supported is given by a standardized formula, whereas Merit-based aid is funding given to students for their outstanding performance either in their academics or activities and in this case, the amount of aid varies from college to college.

Different types of aid are provided via different sources, such as federal agencies, colleges, high schools, organizations, and more. The amount of aid a student receives majorly depends on federal, state, and institutional guidelines. The types of financial aid can be classified into 4 different types which are discussed in detail. 


  • These are the monetary supplies that are given for the students based on their academic excellence in various fields such as education, sports, cultural activities, and more during the year. 

  • Private scholarships are awarded either by privately-owned companies or non-profit organizations. Each of these has a unique combination of requirements, deadlines, and application process, so you’ll want to pay close attention to the specifics of each one.

  • There are thousands of such private scholarships that are awarded to the students who are eligible based on factors that keep on changing every year according to the institution’s rules and regulations. 

  • An important consideration when you are applying for scholarships is that many schools ask you to report your scholarships, and whatever amount of money you receive from scholarships will be subtracted from your grants in a process called "scholarship displacement". 

  • Awarded scholarship amounts can range from a few hundred dollars to several thousand dollars per year that is more than sufficient to afford not only college tuition but also the cost of books and supplies as well.


These are the funding that is given by the government to the students in order to help them pay for college, but the advantage of it is that you do not have to repay it, unlike student loans. A few important forms of grants are as discussed below.

Pell grant

It is one of the well-known grants available. The eligibility for this is based on the details you have given in FAFSA Application (It is further discussed in detail). Majorly, the families who earn less than $50,000 will fundamentally qualify for some amount of Pell. The maximum pell grant awarded for the 2019-2020 academic year is $6,195. 


The Teacher Education Assistance for College and Higher Education abbreviated as TEACH will grant you an award up to $4,000 per year in federal funds to future educators. In order to receive this funding, aspiring teachers will have to meet the requirements mentioned below.

  • Enroll for a degree program in a TEACH-participating school.

  • Maintain a cumulative 3.25 GPA.

  • Obey to teach high-need subjects such as math, science.

  • Agree to teach full-time for 4 years and also to complete this requirement within 8 years of graduation


The Federal Supplemental Educational Opportunity Grant is a need-based grant that is designed for students and families who are facing severe issues with finance. It is based on the details filled in the FAFSA form and does not require a separate application. Any student who receives a Pell grant is directly considered for this grant. You may be awarded up to $4,000 per year with this funding.

Student Loans

Students Loans are funds provided by the government in order to assist and help students to pay for their college and the catch here they will have to repay the amount later. 

The majority of students try to avoid loans to satisfy the cost of college as it will be a burden for them in the mere future and it is the reason why scholarships and grants are so popular. 

We agree, according to you whichever kind of financial aid that is not required to pay back is considered to cause less stress and worry once you are done with the college, but it is not exactly the end of the world if you have to take a loan in order to pay for school.

Here, we have discussed the different types of student loans available.

Direct Subsidized Loans

Direct Subsidized Loans are available to undergraduate students with financial need. Your school decides the amount you can borrow, and the amount may not exceed your financial need. The U.S. Department of Education pays the interest on a Direct Subsidized Loan while you’re in school at least half-time, for the first six months after you leave school, and during a period of a postponement of loan payments. The average award is $4,074. Also, up to $5,500 may be awarded.

Direct Unsubsidized Loans

Direct Unsubsidized loans are available to undergraduate and graduate students and there is no requirement to exhibit financial need. Your institution will decide the amount you can borrow based on your cost of attendance and other financial aid you receive. You are responsible for paying the interest on this loan during all periods. If you choose not to pay the interest while you are in school and delay periods, your interest will be accumulated and be capitalized. The average award is $4,807. Also, up to $20,500 may be awarded.

Direct PLUS Loans

Direct Plus Loan is a federal loan that is designed for certain classes of students which include graduate students, professional degree programs, or the parents of a student in any program that qualifies for federal aid funds. They must exhibit good credit history and may borrow any amount up to the maximum net cost to attend school. Interest may be deferred until six months after you leave school, but continues to capitalize through the life of the loan. If you are a dependent student whose parents are not eligible for a Direct PLUS Loan, you may be able to receive additional Direct Unsubsidized Loan funds. The average amount awarded is $12,349.

Perkins Loan

Perkins Loan offers subsidized loans of low interest to students which is need-based. These are based on FAFSA data and may be awarded to undergraduate, vocational, and graduate students. Depending on availability, you may obtain $5,500 per year as an undergraduate and $8,000 per year as a graduate student. These loans are repaid at a fixed 5% interest rate and must be repaid within 10 years. These are also eligible for the Federal Loan Cancellation program, which means students in some incidents may have their loans forgiven.

Private Loans

It is better to opt for private loans when you run out of other opportunities or the award money you have earned is not sufficient. It must be your last option. The interest rates will be higher than the federal loans which make it difficult and stressful to pay back in the future. These are also ineligible for consolidation with any federal loans.


It is a financial aid that involves working as a part-timer or on-campus work while you are registered for an institution. Any student in an accredited campus-based or online degree program is considered for eligibility. These jobs are not sponsored by the government, earnings may vary, and funding comes from the department that hires.

Federal Work-Study

This program awards funds to students who are in need in exchange for services rendered, usually in on-campus jobs. Students must apply and interview as with any job, and can often choose between areas of the campus or departments that need assistance. Funds are paid directly to students in return for hours worked, and students should not be paid less than the minimum wage.

Student Assistantships

These are the common arrangements for graduate and doctoral students. These students work closely with professors and assist in classroom teaching and research projects. While assistantships operate similarly to work studies and provide tax-free income paid directly to the student, assistantships are in the form of stipends. This stipend is meant to enable graduate students to focus their strengths on studies without having to seek outside employment.

Who is considered eligible for financial aid?

Do you want to know if you are eligible for a specific aid? 

You will have to fill out different forms at different levels such as federal, state, and institutional to know if you're eligible for financial aid. Filling out these forms will not really take long, but be aware of the deadlines. 

Before analyzing your eligibility it is necessary to make a strategy of how much aid is required in order to fulfill all the needs. Here needs in the sense, we mean not only about the tuition fee but also the room, travel charges, notebooks and all the expenses related to the school. Then you can calculate the expenses you can afford and how much extra money you will need in order to lead a peaceful college life. After planning precisely, fill out the forms accordingly.

Further, we have discussed everything about such forms and the process as well.

Free Application for Federal Student Aid (FAFSA)

FAFSA is a form that every college student should fill up and it is administered by the Federal Student Aid Office in the Department of Education. It helps you to determine your eligibility for grants and student loans and is regularly used by schools to award you aid based on your financial need. 

The FAFSA may also determine your eligibility for state and school aid as well. Anyone who plans to attend college should submit the FAFSA. You have to renew your FAFSA application every year since your eligibility with every academic year may change and also it is free to apply for FAFSA.

The FAFSA eligibility guidelines state that students who wish to receive federal student aid will have to fulfill certain basic requirements which are as follows.

  • Be registered in an accredited institution.

  • Be a U.S. citizen.

  • Should have a valid Social Security Number.

  • Must have attained a high school diploma or its equivalent.

  • Should make satisfactory progress in academics.

  • If you are a male over 18 years of age not currently serving active duty, you must be registered for the Selective Service.

  • Should not have defaulted on a federal student loan.

  • Should not have committed any crime.

How to apply for FAFSA?

Here is a step by step process to apply for FAFSA.

  • Collect all official documents such as Social Security number, records of your parents’ assets (to calculate Expected Family Contribution), your driver's license, authorized recognition.

  • Create an FSA ID and it is unique to every individual. As a student who is entering college will have to do this, not your parents or guardian. You are not supposed to share an FSA ID with any of them. 

  • The FAFSA application opens on October 1 of each year and you can use the tax information from the previous year. You will have to provide all of your income information and household information.

  • Once you have completed filling out the form and submitting it, you will be receiving an email with a Student Aid Report (SAR) attached to it which gives you every detail regarding the aid you are eligible for. Also, it includes your Expected Family Contribution (EFC) based on your household income.

 Each college will use the information on your SAR to determine your eligibility for federal and nonfederal student aid. Review the report and make sure all of the information is complete and accurate. If there is any missing or incorrect information, then you should complete or correct your FAFSA as soon as possible.

The colleges you listed are responsible for creating your award package and disbursing your financial aid which is intended to help you fill the gap between your ability to pay, your expected family contribution, college costs, or the cost of attendance.

Usually, to speed up the application process, you must have a clear idea about how long it takes to fill out FAFSA. Gather all the required documents such as tax information, house information, social security number, and so on to avoid any confusion.

College Scholarship Service (CSS)

CSS is another important form you will have to fill out to allocate non-government financial aid that is administered by the college board in addition to the FAFSA.

You can apply to this at the same time you submit your FAFSA and every year on the same date if necessary. According to most of the students, it is said that $25 is the fee to submit their initial CSS Profile ($16 for each added college). 

You will be considered as eligible for this only if:

  • You are a first-year undergraduate student.

  • You must have received an SAT.

  • Your parents' income is less than $45,000 for a family of four.

  • Your parents live in the U.S.

  • You are an orphan.

How to apply for CSS?

Here is a step by step process to apply for CSS.

  • Gather all relevant financial documents for you and your parents such as your most recent tax returns, most recent W2s, all the income records, bank statements, mortgage information, and records of other assets such as stocks and bonds in order to calculate your Expected Family Contribution (EFC).

  • Create an account in your College Board account and log on to it.

  • Fill out all the questions promptly. Be aware of the fact that questions generated are based on how you answer them, they are not the same for everyone. So, be conscious while answering each question. However, there are a few common CSS questions that are repeated every year.

  • Select your schools. 

  • Apply for a Fee Waiver.

  • Submit your application and send it to all the schools you’re applying to.

Once you have submitted your application, college-specific messages and payment confirmation are available in the application dashboard. The data on your CSS Profile are analyzed and reported to the colleges and scholarship programs you have specified. They then use the report to help determine your financial aid award.

If you have a unique family situation, your custodial parent should fill out the answers to the CSS Profile questions. A custodial parent is the one you’ve lived with for the majority of the past 12 months or has provided the most financial support. Your non-custodial parent may also be required to fill out the information, but that will be determined by how you answer each question. It is better to have their documents and financial information with you to avoid all the chaos and any delay. 

Are you wondering what a fee waiver is? It is when an institution charges you a lower fee than usual. Certain students will directly be qualified for a fee waiver which depends on the answers given to the questionnaire. Here are some situations in which your fee may be waived.

  • If your family annual income is less than $45,000.

  • If you are qualified for an SAT fee waiver.

  • If you are an orphan or ward of the court under 24 years old

Institutional Documentation Service (IDOC)

It is a service that collects family financial documents and distributes them to institutions on account of the student. All U.S. citizen applicants (including prospective and returning students) must submit supporting tax and income documentation directly to the IDOC service. Schools will select you for this service, you do not have to apply for it like FAFSA OR CSS.

While the CSS Profile and the FAFSA take your information and they then send a report to the college, the IDOC enables you to directly submit authorized documents to schools through their safe portal.

You will be asked to upload particular year tax returns, W-2 forms, and other financial aid documents for yourself and all of your parents. Parent documents are uploaded by following the same process as the student.

It is important to make sure that the information is given promptly regarding your family in order to avoid processing delays. You will be asked to verify family information when you first sign in to your dashboard, so take enough time to ensure the details given are correct. 

If you are required to submit documents through IDOC, you will be informed by the College Board or CSS Profile Account to do so. You can not sign in until and unless you are asked to do it by the college board. Once you sign in, you can view your financial aid deadlines, upload necessary financial aid documents and track down submitted documents.


We have finally arrived at the conclusion that financial aid to the students is of great help. So to conclude, here are a few points in brief.

  • Analyze and make a strategic plan of how much extra money you would require to pay for your college.

  • Be aware of all the different kinds of financial aid that are available in your state or provision. Also, you should know which is a suitable option for your situation. 

  • Submit your applications to FAFSA and CSS and also to IDOC if you are asked to and determine your eligibility for the aids. 

  • Receive the award.

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