Financial aid is money for education that comes from sources other than the family. It is meant to supplement what the family can contribute to the total costs involved in attending a college or university. The primary responsibility for paying a student's educational expenses belongs to the family. The choice of a college, however, should not be determined solely by family finances. A student and family should proceed through the college search process with information based not only on finances, but on the student's desire and ability to attend the college.
There are two basic types of financial assistance:
- Merit based - This is aid given to students in the form of grants and scholarships - gifts that do not have to be repaid. These are granted to students who excel in academics, sports, leadership, music, art, or dance.
- Need based - This is aid made available to families that can't pay the total cost of post-secondary education. Typically, need-based financial aid is made up of a variety of grants, scholarships, loans, and campus employment opportunities. The demand for need-based aid exceeds the supply. Therefore, most colleges limit their awards to students who demonstrate an actual need, based on the FAFSA (Free Application for Federal Student Aid).
By using the FAFSA, the financial circumstances of every family are evaluated in a consistent and equitable manner. As you complete the FAFSA, you will be asked to enter actual data about your family, your income, and your assets. To be sure all families are treated equally, some figures will be computed according to standardized charts. Using the actual figures you provide and the figures from the charts, an estimated family contribution will be calculated. Once the estimated family contribution is determined for you and your family, it will remain the same regardless of the college you choose to attend.
Federal Financial Aid
Eligibility for federal financial aid programs (with a few exceptions) is based primarily on need. In order to show need, the FAFSA must be completed and filed with the federal government as soon as possible after January 1st. Filing the FAFSA electronically is the preferred method. Detailed instructions are available.
State Financial Aid
Financial aid programs sponsored by the State of Texas are similar to federal programs in that each offers a variety of grants, scholarships, loans, and work study. The two programs differ in basic and obvious ways. The most obvious difference is that state financial aid programs are reserved (almost exclusively) for Texas residents who attend college in Texas. In some cases the school must be a public college. Less obvious differences also exist. For example, students from a rural county in Texas, or students who agree to work in a rural Texas county, may qualify for certain state sponsored grants or reimbursement programs. A good source is Financial Aid for Texas Students, published by the Texas Higher Education Coordinating Board.
Institutional Financial Aid
Institutional aid consists of non-federal and non-state aid programs administered by the college. Although available at practically every school, institutional aid varies greatly from college to college and from department to department within each college. The financial aid office at the college should be contacted for specifics. One piece of advice: apply early; late applicants may find that institutional aid is already dispersed. Institutional grants are usually based on financial need. Institutional scholarships are typically awarded because of the student's ability in areas such as leadership, academic achievement, athletics, or the performing arts. Most scholarships are renewable each year, but are usually contingent on performance level, satisfactory health, or, in the case of academic achievement, maintaining a certain grade point average. Many colleges offer employment programs similar to the federal work study program. Job positions may be awarded because of financial need, the student's qualifications, or a combination of the two. Very often these work study positions are related to the student's field of study. Some colleges have loan programs with low interest rates and favorable repayment terms. Application requirements vary from school to school.
Private Financial Aid
Private financial aid is non-federal and non-state aid that originates outside of the college. It requires a separate application. Private scholarships, although usually awarded according to academic standing and financial need, may also be based on criteria such as field of study, religious affiliation, group membership, ethnic background, or place of residence. Criteria can reflect whatever qualities the sponsors wish to reward. Sponsors include churches, high schools, local businesses, large corporations, foundations, and civic organizations. The employer of one of the parents may sponsor a scholarship exclusively for children of employees. Private loans are available according to the family's ability to repay the loan. Interest rates and repayment terms are determined by the lender. There are usually several options available such as the rate of interest, how the interest is calculated, and when repayment begins. In some cases a private loan can be guaranteed by a student loan corporation.
These websites offer useful information about financial aid and how to apply for scholarships, grants, and loans.