Many parents pay for college with a combination of savings and financial aid. By learning the basics, you'll be able to understand how the financial aid process works, properly fill out aid applications, and compare the aid awards your child receives.
What is financial aid?
Financial aid is money distributed primarily by the federal government and colleges in the form of student loans, grants, scholarships, and work-study jobs. Loans and work-study must be repaid (through monetary or work obligations), while grants and scholarships do not. A student can receive both federal and college aid.
Financial aid can be further broken down into two categories: need-based, which is dependent on your child's financial need, and merit-based, which is awarded according to your child's academic, athletic, musical, or artistic merit. Most financial aid is need-based.
How is financial need determined?