Understanding Financial Aid College Exploration

Financial Aid Vocabulary Scholarship—an amount of money meant to cover tuition, possibly books. In some cases, they may pay for living expenses. They may come from a variety of sources, and they do not have to be paid back. Some scholarships are renewable, which means that each year, you may qualify for the scholarship, depending upon your grades and possibly credits earned. Some scholarships are one-time, which means that you get them your first year, and that’s it. You will have to apply for new ones the next year.

Financial Aid Vocabulary Grant—an amount of money given based on family income. Grants do not need to be paid back, and you may be able to qualify for them annually. Pell Grants: Awarded by the federal government, based on income and the cost of your tuition.

Financial Aid Vocabulary Loan—money that is only yours for a little while. Loans generally cover your living needs and your tuition and books. However, in the end, you will have to pay back loans with interest, which means that you will pay more than you thought you borrowed! This is okay! Loans are the most common form of financial aid, but it is necessary to be smart and stay on top!

Financial Aid Vocabulary There are several types of loans: Stafford Loans: These loans are guaranteed by the federal government. They come in two forms— Subsidized Loans: The interest on these loans is paid by the government until 6 months after you graduate. Unsubsidized Loans: Interest is accumulating from the day you borrow the money.

Financial Aid Vocabulary Private Loans: Given by banks and other institutions. Usually have higher interest! These may come as part of your financial aid package. They can be very helpful in meeting your needs, but look over them carefully to see what they’ll cost you in the long run!

Financial Aid Vocabulary Perkins Loans: Granted to students with exceptional financial need. Their interest rates are typically lower. **Interest Rates: The amount the bank charges you for the convenience of giving you a loan. Interest rates may vary depending upon your credit and the economy.**

Financial Aid Package Applications FAFSA: Free Application for Federal Student Aid You must fill this out if you want financial aid from the government. Most schools use it to determine scholarships and grants.

The FAFSA The FAFSA looks at your entire family income. Your parents will need to show their tax information, and so will you. Schools look at how many children are in your family and what your family expenses are. They use this information to figure out what is called the Expected Family Contribution, the amount the school imagines your family can contribute each year you are in school. You may disagree with this expected contribution – most people do. However, it’s not really something you can argue.

The FAFSA You fill out the FAFSA every year! One time is not enough! So, your situation may change, and your financial aid package will reflect that. If a parent loses a job, you will get more money the next year. Remember, you are always using LAST YEAR’s tax information, which may be good or bad… It’s just the way it is.

Financial Aid Package Applications TASFA: Texas Application for State Financial Aid Available for students who live in Texas, but are not documented. To qualify for TASFA, students need to live in Texas for three years before their graduation. If you qualify for the TASFA, then you will qualify for in-state tuition, even though you aren’t technically a legal resident of Texas! To read more about the TASFA, go to You need to talk to your counselor to make sure you get all the information you need. Eventually, your counselor and your teachers will help you put this application in order.

Final Notes on Financial Aid Each school makes its own decisions about financial aid. You may get no scholarships at one school and a full ride at another. Everyone should fill out the FAFSA, because you may qualify for more than you think! Because schools figure out their own aid packages, private schools can sometimes wind up being cheaper than public schools. Be sure to stay open minded!!!