What is Financial Aid?

Financial Aid is the financial help which is provided by the both public and private sectors to student for their educational expenses.This blog will help you know about what is financial aid?

Posted by Navya B on 16th February 2018

What is Financial Aid?

Financial Aid is the help or assistance provided by either the federal or private organizations in order to help students and their parents to pay the fees in the college or university.

Financial Aid directly provides money to the students to help them pay their college fees.

In the process of financial aid, a complete financial support is given to the students which include expenses like tuition fees, books, lab work expenses, accommodation, supplies, and transportation.

Few Universities which provide Financial Aid

  • George Washington University

  • Aspen University

  • Claremont Lincoln University


Do you have to pay back Financial Aid?

Financial aid is a form of help given to students to pay fees and support their academics. All the Financial aids need not be paid back, only some aids need to be paid back, some need to be earned and few aids are awarded.

There are three ways of returning the amount given to you as a financial aid.

  • Some organizations do not ask for returning the amount of money you seek help towards your academics.

    • You might be thinking how someone will give you money free of cost without even expectation of returning, it’s simple.

    • There are many companies and trusts who will offer money to these private organizations and they don’t take the money back, or they will have some deals in between them.

  • The second way is you should pay back, and there are two ways of returning the money. A student or parent/family can either pay back the money after the given period of time.

    • This is something similar to taking the loan from the banks.

  • Lastly some financial aid organizations mostly the private ones give you money and support for your degree completion and later on the student should earn money and payback to the organization. Even this procedure has some time limit.


Different types of Financial Aid

Financial Aid is broadly divided into four categories

  • Grants

    • It is basically the amount of money given to students and their family members to support their education expenses.

  • Loans

    • It is the amount of financial support given to students as loan and should be repaid.

  • Scholarships

    • It is the financial aid given to students as a gift based on some eligibility criteria for few students and it need not be repaid.

  • Work-study

    • Federal systems provide part-time jobs to students so that they get help to earn their educational expenses.


How to get Financial Aid

You need to apply for a financial aid to get help from the federal system and submit the application. The procedure to apply for federal financial aid is

Step 1

  • You need to apply for an FSA ID or FAFSA ID, this ID identifies each student/ parent uniquely and will make sure there are no malpractices.

  • This Id or identification process is done online, so, therefore, it is an electronic identification of each person.

Step 2

  • The next step is the student or parent should submit the FAFSA application form. The submission should be done before the deadline and all the eligibility criteria and requirements are verified online.

  • After the last date is over, a student won’t be able to apply for any financial aid. Be punctual in applying the submission forms.

Step 3

  • A student should submit the CSS form to the responsible office or Profile if asked or necessary.

Step 4

  • Then the next step is to apply for the scholarships, there are a number of scholarships, one can choose the one which suits a student depending on the eligibility criteria.

Step 5

  • You will review the student aid report and if any mistakes and reports online. You can log on to their account make the changes.

Step 6

  • The next step is to compare the status of the awards you have received and choose one among the ones the students and schools/colleges have received.

Step 7

  • The school will mention applying for loans, if so please do so as early as possible.


Where does Financial Aid come from?

There are basically four sources that provide money/cash/financial help to the student for their studies and completion of the degree. They are:

  • The Federal Government

  • The State Government

  • Various Colleges and universities

  • Numerous Private Organizations/Functionalities.

Almost all the mentioned above sources participate equally to provide money and financial aid to students and 58% of the federal financial aid is in the loan form and it should be repaid within the given time of period. Private sectors also collect revenue for student support and allow it for the student educational help.


Conclusion

By now I expect people who have read this blog would have understood what exactly is financial aid? How does it help students? What all are the necessary criteria and requirements to apply for a FASFA financial aid scholarship.

After reading this article a student should be able to understand how to utilize the resources all around and use them to make a better future to excel well in their education as well as their professional career.


FAQ

  1) Do you have to pay financial aid back?


When it comes to financial aid they are of three types - grants, scholarship and loans and you have to pay according to there terms.

Grants - Government usually gives grants based on financial need, not merit-based and according to US Department of Education grants are known as “gift aid” because they are your money to keep; grants do not have to be repaid. Eg: Federal Pell Grants, TEACH Grants, Iraq, and Afghanistan Service Grants, etc.

Scholarships - They are also a form of gift aid that need not be paid back. Eg: Hope scholarship, Fulbright scholarship.

Loans - Loans are the money that you borrow and that has to be paid back with interest. In loans such as Subsidized loans, the govt will pay your interest till you are in college. Eg: Stafford Loan, Federal Perkins Loan, Direct subsidized loan, Direct subsidized loan.

  2) How much do you get from financial aid?


Your financial need is calculated on the basis of:

Cost of attendance - Expected Family Contribution = Financial need.

You won't receive more than your financial need.

  3) What is Financial Aid to be used for?


Traditionally they are used for attending college, the funds can also be used for transportation and other educational expenses.

  4) Do you have to pay back financial aid if you drop out?


Students who are dropouts are required to pay back a portion of their federal-aid funds such as the Pell Grant.