Paying for College: Aid, Grants, and Scholarships

Two systems, running on different logic, often at the same school.

Need-based aid is awarded on your family's financial circumstances. You demonstrate need by filing forms; the school calculates what it thinks your family can contribute and offers aid against the gap.

Merit aid is awarded on your record, regardless of need. It's how colleges compete for students they want. It typically goes to applicants above a school's median — which is why your likely schools are often where the money is and your reaches often aren't.

Most students receive some combination.

The four things in an aid offer

Award letters mix these together, sometimes deliberately.

1. Grants — need-based, not repaid. Real money.
2. Scholarships — merit-based, not repaid. Real money. Check renewal conditions; some require a GPA you may not hit.
3. Work-study — you earn it by working. Real, but you work for it, and it isn't applied to your bill up front.
4. Loans — borrowed, with interest. Not aid in any meaningful sense, despite appearing under the heading "Your Financial Aid Award" on nearly every letter.

Meeting need, and gapping

A small number of colleges commit to meeting 100% of demonstrated need. They tend to be selective and expensive-looking — which is precisely why sticker price is a bad filter.

Most colleges don't meet full need. The shortfall between your calculated need and what's actually offered is called gapping, and it's how a student ends up admitted to a school that's financially impossible. Assume it unless a school says otherwise.

A related distinction: need-blind schools don't consider ability to pay in admissions; need-aware schools may. Many are need-blind for domestic applicants and need-aware for international ones.

State aid is the most under-claimed money in higher education

Nearly every state runs its own grant and scholarship programs, and these are frequently the difference between an in-state public being affordable and being impossible. They're also badly publicized, and large numbers of eligible students never apply.

How to find yours, in order:

1. Search for your state's higher education agency or student achievement council. That agency's site is the authoritative source — not a blog.
2. Check whether your state requires a separate application beyond the FAFSA, and note its deadline. State deadlines are frequently earlier than federal ones.
3. Ask your school counselor. State programs are the thing counselors know best.

Outside scholarships

Worth some hours — not worth the hours most students give them.

Where the odds are best: local awards. Community foundations, rotary clubs, credit unions, your parents' employers, your own high school's scholarship list. Smaller amounts, dramatically better odds, because the applicant pool is your town rather than the country.

Where the odds are worst: large national essay competitions with tens of thousands of applicants.

Scams, plainly: never pay a fee to apply for a scholarship. Never pay for a scholarship search service — the free databases contain the same listings. A guaranteed scholarship is not a real thing.

The displacement problem nobody mentions: at some schools an outside scholarship reduces your institutional aid rather than your bill — you win $5,000 and the college subtracts $5,000 from its own grant. Ask each school directly how outside awards are treated.

If you can't file the FAFSA

Some students are ineligible for federal aid because of citizenship or immigration status. That doesn't mean no aid exists, and it doesn't mean college is out of reach.

• State aid applications that serve as alternatives to the FAFSA. A number of states operate these for students meeting state residency requirements.
• Institutional aid. Many private colleges award their own need-based and merit aid without regard to federal eligibility. Policies vary widely and aren't always published clearly — ask the financial aid office directly.
• Private scholarships that don't require citizenship.
• In-state tuition eligibility under state law, which in many states depends on where you attended high school rather than on status.

Policy here changes and varies enormously between states. Confirm anything you read — here or anywhere — against your state agency and the individual college. A school counselor or a legal aid organization can help you understand your own situation.

Where to go next

Start with the FAFSA — what to gather and when to file.