Financial aid is often the lifeline to college affordability. With the cost of college attendance rising at a pace much higher rate than inflation, more students must rely on grants, scholarships, and loans to pay the bill. In many cases, the amount of financial aid received is a deciding factor on where your child or grandchildren attends.

Financial aid varies across schools and students, based on multiple factors and will play a role in the financial stability of the student after earning a degree. Students saddled with high student loan debt, often find it difficult to achieve the financial freedom expected, even with a higher paying job.

There are five key factors to understand before applying for financial assistance.

1. FAFSA Is the First Place to StartThere is no fee for completing the FAFSA (Free Application for Federal Student Aid), and it is a mandatory form for all need-based federal, state, and school financial help. The federal application sets the maximum limit of aid the student can receive, based on financial need.You can submit the FASFA to multiple schools, allowing you to apply for financial aid independent of college acceptance. This strategy will allow you to compare schools based on the financial package offered. Some universities require a separate financial aid application in addition to the federal form.
2. Financial Aid is Either Merit-Based or Need-BasedMerit-Based financial aid solely considers the talents and achievements of the student. Academic performance, athletic ability, club participation, or other recognition accomplished by the student can qualify the student for merit-based aid, typically in the form of scholarships. Schools and private organizations offer merit-based assistance.A student might receive a scholarship for their GPA, playing the cello at a high level, or involvement with a non-profit group such as scouting. Athletes excelling in their sport are another common recipient of merit-based financial help.

   Find merit-based scholarships through high school guidance counselors, websites specializing in scholarship searches, or the university the child hopes to attend.

   Need-Based financial aid focuses on family and student need, rather than ability and talents. Schools use, affordability formulas, typically centered around the FASFA form. Students can tap into need-based financial aid in the form of private, federal, and state grants, scholarships, or loans.

   Private schools can have access to large endowments allowing low to middle-income students to afford higher school costs. In some cases, you might have lower out of pocket costs at a more expensive university due to a better financial aid package.

   After qualifying for need-based scholarships and grants, families can often bridge the gap with student loans.

   In addition to these sources, students might qualify for work-study, which is a program offered by the Federal government, employing students part-time. The program allows a student in need of additional financial support to earn money to cover some living expenses while in school.

   Free Versus Borrowed Aid. Grants and scholarships do not require re-payment, where loans you typically begin paying back after leaving school. Finding private scholarships can reduce the need to borrow money to pay for college. Loans can make up the difference between the cost of attendance and free financial assistance.

3. Four Main Sources of Financial AidWhen applying for financial aid, you will receive a package which could include a combination of up to four sources of assistance. Understanding their differences will have a long-term impact on your child’s financial well-being, long after completing school.The federal government offers both grants and loans to students in need. Aid focuses on need-based help with special programs for low and middle-income households. Congress sets loan rates each year and loans do not require repayment while attending school.

   Many state governments offer incentives to students attending in-state schools, in the form of grants and scholarships. The aid offered can be based on the student's residence or financial need.

   College and Universities offer endowments, fellowships, grants, and scholarships to help cover the cost of schooling. Programs include both merit and need-based help. Colleges and universities often give preference to early applications due to limited funds.

   Private Organizations and companies provide both scholarships and loans to pay for school and typically does not rely on school financial aid packages. Scholarships can be need or merit-based. You can locate private scholarships through scholarships websites, individual companies or organizations, or the school.

   Private loans can cover a family’s out-of-pocket costs, in addition to gaps in financial aid beyond federal limits. Federal loans must meet a stricter need-based formula than private options. However, private organizations typically grant loans with higher interest rates, may require repayment while in school, and do not provide the same benefits as their federal counterparts.

4. Meeting Deadlines Will Impact the Amount of Aid You ReceiveFile early. Financial aid applications are due by specific dates depending on the school. In many cases, schools offer aid on a first-come-first-serve basis, benefitting early filers. You can apply for financial aid before filing taxes, and update information after filing your return.You can also apply for financial aid simultaneously with a college application or prior to applying to a particular school. Your child’s high school guidance counselor or college financial aid officer can help you complete the process.

   You may file the FAFSA as early as January 1^st, for the following fall and spring semester. Federal financial aid resets each June 30. It takes approximately a month from the time of application to the financial aid award letter supplied by the school.

   Scholarship deadlines vary throughout the year, giving students ongoing opportunities to win additional money for the upcoming year. In some cases, you can win scholarships years in advance of attending college.

5. You Have the Right to Appeal Financial Aid DecisionsIf you find yourself short of funds, you have the right to appeal the financial aid decision. You can build a case due to extenuating circumstances or show your financial situation changed after submitting the application or filing taxes.You appeal directly to the college through a written or verbal process, dictated by the school.  Begin by asking for a review of the financial aid offer, and provide reasons for the requested adjustment to the award letter. Schools address appeals on a case-by-case basis.

If you are burdened with high amounts of credit card debt and are struggling to make your payments, or you’re just not seeing your balances go down, call Timberline Financial today for a free financial analysis.

Our team of highly skilled professionals will evaluate your current situation to see if you may qualify for one of our debt relief programs. You don’t have to struggle with high-interest credit card debt any longer.

Call (855) 250-8329 or get in touch with us by sending a message through our website https://timberlinefinancial.com.