How Financial Aid Applications Work

With all the different steps involved in various types of financial aid applications, it can be easy to get confused.
With all the different steps involved in various types of financial aid applications, it can be easy to get confused.
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It's no secret that college tuition costs are skyrocketing. From 2004 to 2009, tuition at private universities rose 15 percent, and at public schools the increase was 20 percent. Yet increases in financial aid have more than kept pace with rising tuition. The net cost of an education, after subtracting grants and federal tax benefits, actually went down by $1,100 at private colleges and by $400 at state colleges over this same period [source: College Board: Trends]. For many students, financial aid can be critical to covering the costs of education. To obtain it, it's important to know when, where and how to apply.

Start thinking about aid applications early. Some scholarships require you to participate in clubs or service activities for a number of years. Because there are so many different financial aid opportunities out there, the sooner you start looking, the better.


Go for grants and scholarships first. This is "free money," or funds that offset your college expenses and that you don't have to pay back. A student loan, which must be repaid, may also be part of your financial aid package, but getting scholarships can help you to avoid debt.

Need-based aid is given based on your or your family's ability to pay for college. Merit-based aid is given for things like academic excellence, participation in athletics and other achievements. You can search for opportunities using online scholarship search engines, like those at, or These free sites filter the hundreds of financial aid opportunities and point you toward those that are suitable for you.

Many of the scholarships you can apply for are competitive -- there's a limited amount of money, and it's usually awarded to the most qualified applicants. That's why it's important to pay close attention to your application. Applying properly and avoiding mistakes can put you ahead of the others who are seeking the same money.

Read on for suggestions about filling out aid applications to maximize your chances of getting help with college expenses.


Preparing to Apply for Financial Aid

A search may point you toward dozens or more scholarships for which you qualify. Before you begin applying, you'll want to sort them out. Look at the amount of each award, how likely you are to win it, how much work is involved in applying and when the deadline is. You should try to apply for every scholarship and grant you're eligible for. Don't neglect the smaller awards -- they may be less competitive than larger ones.

Next, get organized. Begin by preparing your resume. This will be a complete list of academic, professional and volunteer achievements and should include the following:


  • Education
  • Academic awards
  • Other honors
  • Extracurricular activities
  • Work experience
  • Volunteer and community service
  • Skills and hobbies -- anything from gardening to car mechanics
  • Travel experiences
  • Accomplishments -- it might be starting a business or raising children

Gathering all this information in one place will make it easier to fill out application forms. You will also want to create a summary of financial information for yourself and your family, and have an up-to-date copy of your school transcript ready.

Also, some scholarship applications may require an essay, so prepare a personal statement before you begin the application process (about 500 words is a typical length). You may have to modify its length or emphasis for individual scholarships, but having the basic ideas and wording prepared is easier than starting from scratch with each application. We'll cover essays more in the following pages.

Applications come in a variety of formats. These days, most are available online. Some grants have no formal application form but require only the submission of an essay. For all applications, read the instructions and make up a checklist including the materials you'll need to submit and when the deadline is.

When applying for a private, merit-based scholarship, think about who is giving out the money. For example, an award from the Veterans of Foreign Wars is likely to be determined by an older panel of judges. The David Letterman Scholarship at Ball State University, on the other hand, which an emphasis on creativity, is judged by telecommunications faculty and grad students [source: Ball State University]. Keep the judge and the purpose of the award in mind when applying.

Next we'll talk about the heart of the matter, filling out the application.


Filling Out the Application

The most important form you will fill out is the Free Application for Federal Student Aid (FAFSA). The information you provide will be the basis for need-based grants and loans, whether from the federal government or individual colleges. You begin by filling out a short form that assigns a Personal Identification Number (PIN) to you.

The FAFSA asks for basic information, such as your Social Security number, citizenship and college enrollment status. If your parents or someone else lists you as a dependent for tax purposes, then you will usually be asked to provide information about their income and assets as well as your own.


The purpose of the FAFSA is to calculate a figure representing how much money your family is expected to contribute to your education. This amount is known as the Expected Family Contribution (EFC). It will be reported to you on your Student Aid Report (SAR), which will be sent to you after you file your FAFSA. The information on the FAFSA will be the basis of the package of grants, work-study opportunities, and loans that you may be offered.

You can file the FAFSA beginning Jan.1 of the year for which you're applying for aid. You should try to finish it as soon as possible. Many college financial aid deadlines are March 1, but some might be earlier [source: College Board: Handbook]. You can read more about the FAFSA in How the FAFSA Works.

Next, you may turn to applications for private scholarships. Always follow directions carefully. Making a simple mistake, like failing to list your current grade in school or leaving out the year you joined a club, can disqualify you. Neatness and grammar count, and be absolutely sure of your spelling. Also, don't leave any blanks. If you don't need to answer a question, write "not applicable."

Read each question carefully. When working online, you can cut and paste sections of your resume into the application form. But if the question asks you to list four academic honors and your resume includes seven, be sure to alter your answer according to the directions. When submitting the application, be sure to include only what's asked for. Don't send additional information, and don't include attachments unless they are requested -- they may make your application harder to handle or even disqualify you [source: Scholarship Help].

Once you've completed the application, check over your answers thoroughly. Your name should appear on every page in case the pages become separated. Make sure you file the application before the deadline. If it's an online application, print out a complete copy. If you're mailing it, ask for delivery confirmation from the post office to be sure it arrives. You should make a copy of all the information that you send with each application.

In the next section, we'll take a look at the most common steps for completing the application process.


Completing the Application Process

Many scholarship applications require you to write an essay. It may be in the form of a personal statement, or it may be one or a series of questions requiring essay answers. Sometimes, the essay may be the entire basis of the award. For example, the United States Institute of Peace offers up to $10,000 in scholarship money for the best essay on topics such as "Governance, Corruption and Conflict" [source: USIP].

Some scholarship competitions involve making videos rather than writing essays. For example, the Bridgestone Safety Scholars contest offers a $5,000 scholarship for the best video about automobile safety [source: Bridgestone Safety Scholars].


Know what the judges are looking for. Usually, they want the entry to give a sense of how well you can organize and express your ideas. Start with an outline -- don't rely on a stream-of-consciousness approach. Your personal statement should provide a good picture of who you are, with a strong emphasis on your talents and passions.

You might also want to begin thinking in advance about responses for some of the most common essay questions, such as the following:

  • What are your educational and career goals?
  • How will you use your skills to give back to the community?
  • Why is community service important?
  • What person or event most influenced you?

Apply the principles of good writing, and keep in mind that the judges will be reading hundreds of similar essays. Try to make yours stand out by grabbing the reader's attention in the first paragraph and using specific details and vivid examples. Keep it focused.

Pay close attention to the criteria: Always stay within the minimum and maximum length, and provide the information in the format requested. You should write several drafts and carefully proofread the final one. Pass it on to a teacher or parent to critique before you send it.

Another important step toward completing your application may be to obtain letters of recommendation. You'll want to ask for one from an adult who's not related to you but who knows you well. It could be a teacher, job supervisor or community leader. Make sure the person likes you and is willing to take the time to write. If you can, choose someone relevant to the award -- a science teacher to recommend you for an engineering scholarship, for example.

No one likes to be rushed, so ask for the recommendation several weeks in advance. Also, give the person your resume, even if he or she knows you well. The information will make it easier for the person to write the letter and avoid errors. About 10 days before the deadline, call the person to see whether the recommendation has been sent.

On the next page, you'll learn about applying for a student loan.


Applying for a Loan

The package of financial aid from your college may include a loan. Beginning in 2010, all federal student loans are made directly from the Department of Education, not through private banks [source: FSA: Stafford Loans]. The amount of these loans is determined by the information on your FAFSA. Your parents can also receive loans to pay for your college costs through the government's PLUS program.

If you decide to use a federal Direct Loan, you will undergo a credit check. If you have an adverse credit history because of overdue debts or unpaid bills, you may still be eligible. You will need an endorser, which is someone who agrees to repay the loan if you do not.


As part of the loan application process, you will receive entrance counseling before the money is paid out. This information will help you to understand your obligations. It may be offered in person by your college, or you may complete the counseling online.

Next, you will have to fill out a Master Promissory Note (MPN). The MPN is a legal document in which you promise to repay your loan, along with any interest and fees, to the Department of Education. It will explain the terms and conditions of your loan. You can fill out the MPN online, but you must complete it in a single session, so make sure you have at least 30 minutes to devote to it and have gathered all the needed information [source: FSA: Master Promissory Note]. You will need to provide your employer's name and two references.

If you need to borrow more money than is offered through the federal programs, you can approach a private lender, such as a bank or credit union. The application process for private loans varies among lenders. Some banks let you apply online, and others require paper forms. You will fill out a private loan self-certification form. This affirms that you have been advised that free or lower-cost federal financial aid is available and that a private loan may reduce your eligibility for federal, state or college aid [source: FSA: Information for Financial Aid Professionals]. Once you are granted a private student loan, the bank will ask you to sign a promissory note accepting the terms of the loan and agreeing to repay it.

Student financial aid is a complicated subject, and the information on the next page may help you further navigate the process.


Lots More Information

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More Great Links

  • Andrews, Eva-Marie. "The Search for Scholarships," 2007, page 18.
  • Ball State University. "Letterman Scholarship: Information and Guidelines." (accessed May 20, 2010)
  • Bridgestone Safety Scholars. "Contest Guidelines." (accessed May 20, 2010)
  • College Board, The. "Getting Financial Aid Handbook. The College Board, 2009, page 43.
  • College Board, The. "Trends in College Pricing." (accessed May 21, 2010)
  • Federal Student Aid (FSA). Information for Financial Aid Professionals. "Private Education Loan
  • Applicant Self-Certification." (accessed May 21, 2010)
  • Federal Student Aid (FSA). "Master Promissory Note." (accessed May 20, 2010)
  • Federal Student Aid (FSA). "Stafford Loans." (accessed May 21, 2010)
  • Project on Student Debt, The. "Keeping College Within Reach." (accessed May 20, 2010)
  • Scholarship Help. "Preparing the Application." (accessed May 21, 2010)
  • Student Loan Borrower Assistance. "A Resource for Borrowers,
  • their Families and Advocates." (accessed May 20, 2010)
  • United States Institute of Peace. "Governance, Corruption, and Conflict -- 2010-2011 Contest." (accessed May 20, 2010)