Many families are stunned when they see a college’s sticker price. Though tuition costs can feel overwhelming, financial aid can help make higher education more manageable.
According to the annual Sallie Mae/Ipsos survey, How America Pays for College, most families rely on income and savings to cover college expenses. The 2024 survey found that scholarships and grants—money that doesn’t need to be repaid—covered 27% of costs for the average family in 2023-2024, down from 29% the previous year.
At the same time, those families spent an average of 28,409oncollegein2023−2024,upfrom28,409oncollegein2023−2024,upfrom28,026 the year before, per Sallie Mae’s report.
Figuring out financial aid can be tricky, so here are answers to some common questions.
What Is Financial Aid?
Financial aid helps students and families pay for college expenses like tuition, housing, food, books, supplies, and transportation. It comes in several forms:
- Grants
- Scholarships
- Federal and private loans
- Work-study programs
For many, financial aid is the most confusing part of college planning. “I hate that for them,” says Kerr C. Ramsay III, a senior VP at High Point University. “But we’re here to help. Financial aid offices are the experts—this is their job—so students shouldn’t hesitate to ask questions.”
How Does Financial Aid Work?
Aid comes from federal and state agencies, colleges, high schools, foundations, and corporations. How much a student gets depends on federal, state, and school guidelines.
The type of aid determines whether it must be repaid, and students can accept or reject any offer.
“We always want students to prioritize gift aid—money you don’t have to pay back,” says Janet Turner from the University of Portland. “Try to get as much gift aid as possible to help cover costs.”
How Do I Apply for Financial Aid?
The first step is filling out the FAFSA (Free Application for Federal Student Aid). Schools and states use this to determine aid, usually based on household income from tax returns.
The FAFSA is available at StudentAid.gov. Normally, it opens October 1 for the next academic year, but due to updates from the FAFSA Simplification Act, the 2025-2026 form launched in November 2024—the second straight year of delays.
The federal deadline is June 30 each year (e.g., June 2026 for 2025-2026). But many schools set earlier deadlines.
Some private colleges also use the CSS Profile, a more detailed form that asks about medical or extra education costs. The first submission costs 25,withadditionalreportsat25,withadditionalreportsat16—but fee waivers are available for qualifying students (e.g., those from families earning under $100,000).
“The CSS Profile helps us assess need differently and allocate institutional funds,” says Taryn Anderson of Baylor University. “We still use the FAFSA but add the Profile to maximize aid.”
Some scholarships or private aid may require separate applications.
What Are the Different Types of Financial Aid?
There are two main categories:
- Need-based aid – Determined by family finances (via FAFSA).
- Merit-based aid – Awarded for talents, academics, or athletics, regardless of income.
Students may qualify for federal, state, or school-specific aid. Each college has its own policies for awarding funds.
Federal Aid Options:
- Loans – Fixed-rate government loans. Dependent undergrads can borrow up to 31,000;independentsupto31,000;independentsupto57,500.
- Grants – Free money, like the Pell Grant (max $7,395 for 2024-2025). Eligibility depends on the Student Aid Index (SAI) from the FAFSA.
- Work-study – Part-time campus jobs for students with financial need. Average earnings in 2023-2024: $1,615 (Sallie Mae).
Most state aid is for in-state students, though some (like Vermont) offer portable grants for out-of-state schools.
Experts recommend maximizing merit aid to bridge gaps after need-based aid. But not all schools offer it—some reserve it for top students or require a certain GPA.
Other aid programs serve specific groups, like ROTC (military training + scholarships) or GI Bill benefits for veterans and active-duty members.
“Never pay to search for scholarships,” Ramsay advises. “The best resources are free—and you shouldn’t pay to apply, either.”
What Should I Know About Deadlines?
Deadlines vary by school and state. For example:
- University of Iowa – February 1 (first-come, first-served).
- University of Michigan – March 31 (but filing by December 15 speeds up aid offers).
State deadlines are listed on the Federal Student Aid website.
“Apply early, especially for state aid—funds are limited,” Turner says.
How Do Schools Award Aid?
Each school has its own process. Some meet full need with aid (sometimes including loans), while a few (like Davidson College) offer no-loan packages.
When Will I Get My Award Letter?
Usually in winter or early spring—around acceptance time. This year’s timeline may shift due to FAFSA delays.
Can I Appeal My Award?
Yes, through a professional judgment review. Valid reasons include job loss, divorce, medical bills, or other financial changes after submitting the FAFSA.
“Many families hope for more aid,” Ramsay says. “Colleges want to help if circumstances change.”
Schools may request a letter explaining the situation. However, aid is based on income and assets—not just personal stories.
“We try to distribute aid fairly,” Anderson says. “But resources are limited, so grants depend on documented need.”