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How to Get the Most Financial Aid

Start the Search: Financial Aid
A couple of good scholarships are a smart way to lighten the load.
A couple of good scholarships are a smart way to lighten the load.
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There are two basic ways to break down the world of financial aid: need-based awards and merit-based awards. The former are generally geared toward people with financial issues, while merit-based awards are typically reserved for students who excel in some academic, artistic or athletic area.

Regardless of which type of award you're after (or if you hope to receive both types), it's a good idea to start tracking down potential financial aid opportunities early, before crucial deadlines slip by. High school students, for example, should begin the search during the spring semester of their junior year. There are lots of online databases with scholarship listings, and guidance counselors and libraries can also serve as good jumping-off points. Scholarships and grants can be awarded for any number of factors including financial need, academic or athletic excellence, first-generation college students, minority status, enrollment in a specific major, and certain community or religious affiliations.

Different grants, scholarships, fellowships and work-study programs not only have highly variable deadlines -- they also have limited amounts of funds -- another reason students should start checking around as soon as possible to maximize what they can receive. One good way to avoid pitfalls like these is to register with free databases like FastWeb or, which allow students to fill out detailed questionnaires and receive personalized lists of applicable financial aid opportunities. They also offer services like e-mail updates when new opportunities are posted or when deadlines are approaching. Then it's time to start filling out applications and crossing fingers.

At the end of the day, if students still lack necessary funds after collecting aid, loans remain a possibility. The federal government offers loans, such as the Stafford and Perkins Loans (for students) and the PLUS Loan (for parents). Federal loans are widely recommended as the first and best choice, followed by private loans offered from banks.

Some students and their parents can also explore other avenues like applying for tax credits such as the Hope Scholarship Tax Credit and the Lifetime Learning Tax Credit. Depending on whether they're eligible and what their circumstances are, some money may be subtracted from the amount they owe in taxes.

On the following page, we'll cover the next major step you'll want to take while applying for scholarships, grants and a whole lot more.