Financial Aid: Commonly Asked Questions
August 29, 2007
by Paulina Mis
You will find that, as you go out in search of money to fund your post-secondary
education, a lot of questions are going to surface. Naturally, being that
we are the largest independent and dedicated resource to scholarships and financial
aid on the web, we have a lot of answers. Below, we have a list of some of the most
common questions, along with their answers. If you don't find an answer to your
question below, check out our Scholarship F.A.Q. page.
How can the average student find financial aid for college?
Students searching for financial aid should begin by filling out a FAFSA and by applying for
scholarships. FAFSA submissions can earn students thousands in aid.
Many students are worried that their parents’ average income will impede their search
for financial aid. That’s not true. Restrictions on availability are not as strict
as students think. Even if students are ineligible for free grants, they may receive
aid in the form of government loans: these carry much lower interest rates than
private loans. Scholarships are another great funding option. There are countless
scholarships out there, and many are not merit based. There are the normal, everyday
student scholarships, and then there are the
downright kooky scholarships. To find both , students can perform a free
search at Scholarships.com.
With over 2.7 million scholarships, they are bound to find something.
Are scholarship searches reliable?
Some of them are. Naturally, Scholarships.com
is not only legit, but also the best way to find the most current information about
scholarships. Not only are we on the up-and-up, but we make sure all the awards
listed on our site are as well. If they so much as charge an application fee, we
don't list them. Students should definitely be wary of services that ask for money.
There is no need to pay to for a scholarships search. Scholarship providers are
giving money away, not hiding it. Students should also stay away from websites that
claim to do all of the work. Most scholarships require students to submit personal
information, information that only students will know. Any site that suggests otherwise
may be attempting to
Will scholarships affect my eligibility for financial aid?
They may. The government takes student awards into consideration when offering aid.
However, students should not be deterred by this. The effects are not likely to
be great. Many schools use student money to offset loan eligibility, not to offset
free grant awards. Students who believe they may not be eligible for much aid can
benefit greatly by applying for scholarships. Contrary to beliefs of certain celebutantes,
more money equals fewer problems.
Are graduate students eligible for financial aid?
Yes and No. Graduate students are eligible to receive money in the form of scholarships,
grants, fellowships and assistantships, but they are not eligible for the government
However, graduate students need not worry; there is plenty of non-loan aid out there.
Myriad scholarship and outside grant opportunities may be found at
Scholarships.com. Many graduates may also receive school grants, fellowships
and assistantships; these are usually merit-based. Loans should be used as a last-case
My parents have saved for my education; will this affect my eligibility for aid?
Yes. However, this should not discourage parents and students from saving. Free
school grants are capped at $4,300 for the 2007-2008 year. Assuming that students
will receive the full amount—many don’t—they may still be lacking. Those who save
should set up an account in a guardian’s name. Less than 6% of parents’ assets are
considered to be potential college contributions. The percentage increases significantly
if students own the money. Parents might want to consider using student money to
buy college necessities such as laptops and living extras before submitting their
I didn’t receive enough government aid. What can I do?
You have options. Students who did not receive sufficient aid can try to speak with
financial aid administrators. They may be willing to help—especially if a students’
financial situation has recently changed (e.g. job loss or new medical bills). Students
may also apply for scholarships and grants, year round. As a last resort, students
may apply for loans.
How do I know which lender to choose?
Students who choose to seek out additional aid through loans are likely to find
preferred-lender lists at their college. Lists are generally generated based on
low interest rates and service quality. However, students should always perform
personal research. There have been issues with colleges receiving incentives for
placing lenders on
preferred-lender lists. When researching, students should compare interest
rates, on-time payment benefits, penalty charges and additional fees.
What is the difference between loans, grants and scholarships?
Grants and scholarships are both free monetary awards: they do not need to be repaid.
Grants may be offered without service requirements (Pell Grants) or with research
requirements (usually the case with graduate students). Scholarships are awards
that may be awarded based on merit, talent, major, ethnicity etc. They are not restricted
to top students. Plenty of average-student scholarships are out there. Loans need
to be repaid, with interest. The government offers the best interest rates on loans.
Government guaranteed loans and completely private loans tend to be more expensive.
What’s this I hear about 529 Plans and Roth IRAs?
Students and parents who can put college money aside should take advantage of student
savings account tax incentives. Certain accounts are especially created with students
in mind. Oftentimes, the deposited money can grow tax-free. Some accounts, though
not created for students, offer tax breaks if funds are used for college. The most
popular savings account options are the
529 Plan and the
Roth IRA. Additional options include the
Coverdell and the
Are there any other things I can do to lower college costs?
Aside from scholarships, FAFSA, fellowships, and tax breaks, students may consider
working. Students who are eligible for Federal Work Study may look into part-time
job options. Federal student jobs are usually flexible when it comes to scheduling.
Non-federal jobs are usually plentiful on campuses as well. Because there are so
many potential workers, the 10 fast-food joints on each block may be willing to
accept odd hours if someone is around at all times.
Are there any tax incentives for attending college?
There best known tax incentives are those for 529 savings plans. Many parents don’t
realize that there are more breaks out there. The
Hope Credit and the
Lifetime Learning Credit will allow parents to reap some benefits from
this college piggybank drain.
How can I increase my chance of landing scholarships?
There are plenty of ways to increase the chances of winning. One of the best is
applying for very specific scholarships. Students are more likely to win if the
award is restricted to those within a certain city or major.
Scholarships.com helps students find these types of scholarships. Based
on profile answers, Scholarships.com can show students a listing of scholarships
they are eligible to win.
To increase the chances of winning, students should also apply early. Some scholarship
programs receive submissions from many applicants. Students who apply early are
less likely to have applications lost in a pile of submissions. Last but not least,
students should remember to pay attention to all regulations. They should only apply
for scholarships they are eligible for and should always remember to proofread their