The words "financial aid" written on notebook paper

Learning starts here.

In this section, you’ll learn about key financial aid terms and language, types of financial aid, and how to qualify for aid.

Glossary

When learning about financial aid, you’ll come across many new terms and acronyms. These are the ones we think are most important to know. Studentaid.gov offers a full glossary here.

  • FAFSA stands for Free Application for Federal Student Aid. It's a form that students must fill out to apply for financial aid from the federal government, such as grants, work-study, and loans.

  • This stands for College Scholarship Service. The CSS Profile, like the FAFSA, is a form you’ll complete about your family’s finances. Many schools use the CSS Profile to award institutional financial aid – grants and scholarships that come from the school and not the government.

  • EFC stands for Expected Family Contribution. It’s a calculation used by the federal government to determine a student's financial need. It is based on the family's income and assets and is used to determine how much financial aid a student is eligible for. It will be replaced by SAI (Student Aid Index) for the class of 2024.

  • SAI stands for Student Aid Index. Beginning with the class of 2024, the government will replace EFC with SAI. It will be a simpler and more accurate calculation of what students can expect to pay for college.

  • The Cost of Attendance, or COA, is the estimated total cost of attending a college or university for one year. It includes tuition, fees, room and board, books and supplies, and other expenses.

  • Net price is an estimate of the actual cost to attend a college–the amount you’ll pay each year–after aid you may qualify for is applied (scholarships, grants, etc.).

  • This is a term used to describe the difference between your family’s EFC/SAI and the Cost of Attendance (COA) for a particular school. If your SAI is $1,000 and the cost to attend a school is $45,000, your demonstrated need is $44,000. This is important because some schools meet 100% of demonstrated need!

  • Grants are a type of financial aid that do not need to be repaid. They are typically awarded based on financial need and can come from the federal government, state government, or the college.

  • Scholarships are a type of financial aid that do not need to be repaid. They are typically awarded based on merit, such as academic or athletic achievement, or based on other factors, such as ethnicity or community involvement.

  • Need-based aid is financial aid that is awarded to students based on their financial need, as determined by the information provided on the FAFSA or CSS Profile.

  • Merit-based aid is financial aid that is awarded to students based on their academic or other achievements, rather than financial need.

  • A Direct Subsidized Loan is a federal loan that is based on financial need. It must be repaid. The government pays the interest on the loan while the student is in school, and for a six-month grace period after they graduate.

  • A Direct Unsubsidized Loan is a federal loan that is not based on financial need. It must be repaid. Unlike subsidized loans, interest on the loan builds up while students are in school.

  • Work-study is a program that allows students to work part-time on campus and earn money to pay for their education. The program is typically awarded based on financial need.

Types of Aid

There are several types of aid available to help with college costs and expenses. Understanding these types and sources of aid will help you make informed decisions and plan ahead. Visit www.studentaid.gov to learn more about types of aid!

Grants

Free Money! Grants are given by the government (like Federal Pell Grants) and colleges (like institutional grants). This is free money for your education that you do not have to pay back.

Scholarships

Free Money! Scholarships are given by organizations and colleges themselves. Often, scholarships are based on merit (your achievements — like grades, athletics, or music). They can also be based on identity (such as being a Latinx student) or need (your ability to pay for college).

Work-Study

Federal work study is a government program that gives you an opportunity to earn money for college expenses by working a part-time job on campus or in the community.

Loans

Loans are money for college that must be repaid, with interest. Loans can be federal (from the government) or private (from a bank).

More on Loans

Loans come in many different forms. Let’s learn!

Federal Loans

These are loans given by the government. There are three types:

Direct Subsidized Loans
For undergraduate students with financial need. No credit check is required, and interest does not build up while you are in school at least half-time.

Direct Unsubsidized Loans
For any student. Interest does build up while you’re in school. No credit check is required.

Parent Plus Loans
For biological or adoptive parents of students. Interest does build up while the student is in school. Requires a credit check.

Private Loans

Always use federal loans first because interest rates are typically lower and more flexible repayment plans are possible. Many banks and credit unions offer private student loans. These tend to have higher interest rates than federal loans. They also require a credit check. If you want to explore private student loan options, we recommend this guide from Nerd Wallet.

Watch this video to learn more about student loans!

How to Qualify for Financial Aid

Wondering how colleges award this aid? Read the section below to learn about qualifying for financial aid.

You qualify for financial aid in one of two key ways: Merit or Need. Find out more about eligibility at www.studentaid.gov.

The government and colleges determine your eligibility for federal grants, federal loans, and school-based scholarships through two applications:

The Free Application for Federal Student Aid (FAFSA) 

An online application the government uses to determine your eligibility for different types of government aid like grants, loans, and work study. All U.S. citizen students should complete this. 

The College Scholarship Service Profile (CSS)

An online application 400+ colleges use to determine your eligibility for grants and scholarships. All students, regardless of citizenship, should complete this if applying to a school that uses it. See those schools here.

What is the FAFSA? Watch this video to find out!

Not a U.S. Citizen?

Because U.S. citizenship is required to complete the FAFSA, financial aid is more complicated for international and undocumented students. But it’s still possible to get aid for college! 

Oh, and one very important thing: 

There is no federal or state law that prohibits the admission of undocumented immigrants to U.S. colleges, public or private. Federal or state laws do not require students to prove citizenship in order to enter U.S. institutions of higher education. 

Also, If you’re worried about telling teachers and counselors that you’re undocumented, be aware that, by law, school officials cannot disclose personal information about students — including their immigration status. Find out more about the Family Educational Rights and Privacy Act at ab540.com.

Watch this video for answers to common questions about financial aid for non-citizens!

Resources for Non-Citizens