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The average cost of college at an in-state public school for the 2018-2019 school year was $25,890.
If the number gives you sticker shock, don’t panic. Qualifying for financial aid can help you offset your education costs and pay for school.
Here’s what you need to know about financial aid:
- Financial aid eligibility requirements
- Types of financial aid
- Beware: You could lose your financial aid
- How to apply for financial aid
Financial aid eligibility requirements
To qualify for federal financial aid, you need to meet the following requirements:
- Citizenship: You must be a citizen or eligible noncitizen of the U.S. with a valid Social Security number (if you’re from the Republic of the Marshall Islands, Federated States of Micronesia, or the Republic of Palau, this requirement is waived). Both independent and dependent students are eligible for aid.
- Education: You must have a high school diploma, a General Education Development certificate, or you must have completed a homeschooling curriculum.
- Enrollment: You need to enroll in an eligible program as a student seeking a degree or certificate.
- Academics: You must maintain satisfactory academic progress, meaning you’re fulfilling the minimum requirements needed to advance toward graduation.
- Finances: To be eligible for federal financial aid, you can’t owe a refund on federal student grants or be in default on a federal student loan.
- Selective Service registration: Male students that are not currently on active duty with the U.S. military must register with the Selective Service System.
Types of financial aid
The financial aid letter typically includes the following forms of aid:
- Federal and state grants: You might be eligible for some state or federal grants. Grants are a form of gift aid, meaning they don’t typically have to be repaid. Grants are usually based on financial need.
- Institutional aid: The school itself might also offer you grants or scholarships. Scholarships, like grants, don’t have to be repaid. But scholarships are usually based on merit, such as your academic or athletic performance.
- Work-study programs: Some schools offer a work-study program. With this option, you work a part-time job related to your field and use your earnings to pay for a portion of your educational expenses.
- Federal student loans: To pay the remaining balance of your tuition, the financial aid letter will list what kinds of federal student loans you can borrow. You could qualify for subsidized loans — where the government covers the interest charges that accrue while you’re in school and during your grace period — and unsubsidized loans.
While the financial aid letter is helpful, it’s not fully comprehensive. You can find other financial aid options on your own. For example, you could qualify for private scholarships offered by nonprofit organizations or companies. You can find scholarship opportunities on FastWeb.com, Scholarships.com, or you can shop around for private student loans to fill the gap that federal financial aid doesn’t cover.
Beware: You could lose your financial aid
While you may have qualified for financial aid in the past, you’re not guaranteed to get the same amount, or the same type of aid, in the following years. Federal aid requirements can change from year to year, and other circumstances can affect your eligibility.
Here are a few reasons you could lose financial aid:
- Your family’s income increased: If your family’s income increased after getting a raise or a new job, you might no longer qualify for federal or state grants or subsidized loans.
- You defaulted on your loans: If you previously took out federal loans and defaulted on them, you’ll need to get out of student loan default before you can borrow any more.
- Your grades went down or you didn’t complete enough credits: If your grades slipped, you failed a class, or you didn’t complete enough credits, you might not satisfy the academic progress requirement and lose your federal aid eligibility.
- You were arrested for a drug offense: If you’re arrested for a drug offense and convicted, you’re ineligible for federal aid until your sentence is served.
How to apply for financial aid
Qualifying for federal financial aid isn’t as difficult as you might think. However, to be eligible for financial aid, you must complete the Free Application for Federal Student Aid (FAFSA) by its deadline. You can fill out the FAFSA starting on October 1, and it must be submitted by June 30.
The government and schools use the FAFSA to determine your Expected Family Contribution (EFC) and decide what aid you’ll qualify for.
Financial aid is often distributed on a first-come, first-served basis, so it’s a good idea to complete the FAFSA as soon as possible so you get all of the aid you’re entitled to receive.