Categories of Financial Aid

The purpose of financial aid packages is to level the educational playing field by providing students from disadvantaged families with financial assistance. Administrators hope to enable these students to receive a quality education, thereby opening doors to opportunities that can positively impact their family's fortunes.

People often associate financial aid programs with colleges offering full-ride academic scholarships to deserving yet financially challenged students. While these programs exist, there is a plethora of other financial aid opportunities, including:


Awarded on need basis

Don’t require repayment


Awarded for merit

Don’t require repayment

Subsidized Loans
Do require repayment

Based on need

Based on need

Work is required

Some financial aid offerings may mandate students to enroll in a designated number of credits each term or complete specific weekly tasks. On the other hand, certain options may entail partial repayment. Familiarizing oneself with the specifics of each product is essential to maintain compliance and avoid financial penalties.

While most student aid originates from the federal government, there are other organizations that contribute to providing financial aid.

Received aid amount

While students may express curiosity regarding the types and workings of aid programs, their primary concern typically lies in determining the expected amount of financial assistance. Although the answer depends on the student's specific circumstances, certain statistics can shed light on this matter.

Financial aid can also be provided by schools, and an analysis of grants for law schools by U.S. News and World Report reveals that the award amounts can vary greatly depending on the selected institution.

The state in which a student resides can have a substantial impact on the availability of financial aid, as demonstrated by statistics from the Brookings Institute.

Comprehending the Discrepancy

While financial aid undeniably assists students in pursuing their desired education, it is common for these programs to encompass a significant gap. This means that students often have to rely on unsubsidized or private loans in addition to their financial aid.

The information presented in this graphic clearly shows that students receiving financial aid tend to accumulate higher borrowing than their counterparts without aid. This can be attributed to their increased financial requirements, compelling them to seek additional sources of funding to cover their expenses.

Optimizing Financial Assistance

When it comes to securing financial aid, nearly all avenues require students to complete the Free Application for Federal Student Aid (FAFSA), which assesses their financial need and eligibility. While the majority of students promptly embark on this task at the beginning of the year, a chart from the U.S. Department of Education illustrates that some individuals unwisely procrastinate before initiating the process.

One Third

One-third of students fill out a FAFSA in the first quarter

Three Fifths

Three-fifths of applications are complete by the second quarter

Five Sixths

Five-sixths are complete by the end of the third quarter

Dealing with frustration

In situations where financial aid packages do not meet all expected expenses, families can take proactive steps such as researching alternative funding options, engaging in discussions with the educational institution for potential revisions, encouraging part-time work opportunities or work-study programs, exploring private loan options, and making necessary adjustments to the student's budget and expenditures.

  • Schedule a meeting with the financial aid officer, and bring all pertinent financial documents to that meeting.
  • Be polite, but firm, about the family’s need for additional aid.
  • Show documentation from other schools, if the student’s been provided a more generous financial package at a different institution.
  • Follow up the meeting with an email message, reiterating key points.
  • Fill out formal appeal paperwork, if applicable.

While smaller schools may face financial constraints, taking a diplomatic approach to negotiations could prove fruitful, especially with larger institutions that may be willing to explore alternative financial packages.


Qualifying for student financial aid: How?
Demonstrating a serious financial need through your financial information is crucial to qualify for student financial aid. The amount of aid awarded is typically higher for applicants with greater need, while those with lesser need receive a proportionate amount. Additionally, being a legal U.S. citizen with a valid SSN, no loan defaults, and a minimum high school education are prerequisites.

Different financial aid options explained briefly.
Available financial aid programs include federal, institutional, and private options. Federal aid stands out due to its borrower-friendly terms and low interest rates. Institutional aid focuses on exceptional academic achievements and severe financial need. Private aid programs come with stricter conditions and higher interest rates. It is advisable to exhaust federal aid first and explore other avenues only if further assistance is necessary.

When to submit financial aid forms?
After January 1st of senior year, it is best to file the FAFSA promptly, while the PROFILE can be submitted earlier than that date for advantageous results.

Filing no later than March 1st is essential if you expect to qualify for need-based financial aid. Numerous states and colleges utilize this deadline to determine eligibility for state and campus-based aid. Missing this deadline could make you ineligible for such aid, regardless of your demonstrated need. Be diligent in meeting this important deadline.

How to complete financial aid form without finished taxes?
Make a reasonable estimate using last year's tax return and submit the form(s) as soon as possible to secure a favorable position in the financial aid queue. You can later revise the form with more accurate information without any negative consequences, making early filing beneficial.

Filing: Electronically or by regular mail?
We highly advise submitting the FAFSA and CSS/PROFILE forms electronically for optimal results. Electronic filing ensures faster processing, increased responsiveness, and greater convenience for colleges. If you choose to file by regular mail, remember to keep a copy of the form and obtain a Certificate of Mailing at the post office to confirm the date of mailing. Avoid using Certified or Registered Mail or any service that necessitates a signature upon receipt.

Received something from IDOC. What now?
IDOC, a widely adopted service by colleges, examines tax return data to primarily focus on real cash flow, identifying potential "phantom losses" on the tax form while discounting factors like depreciation and carryover losses from stock sales and other transactions.

Family business or farm: Consequences?
When filing a PROFILE, you will need to complete a Business/Farm supplement akin to a multi-year Schedule C on your 1040, in addition to the information provided on the FAFSA.

In case your current year's income is expected to be different from the one reported on the financial aid forms, it may be necessary to make adjustments and provide updated information.
When your income rises, postpone reporting it until the end of the calendar year on the next FAFSA and PROFILE. However, if your income decreases, contact the college's financial aid office after the student's admission to discuss your new, reduced income and obtain guidance on navigating the appeal process.