Financial aid
Financial aid is essential for many students seeking to attend college, with approximately 72% of undergraduates receiving some form of assistance, averaging over $14,000 per student in the 2019–20 academic year. The sources of financial aid are diverse, including federal programs like Pell Grants and Direct Loans, as well as support from state governments, nonprofit organizations, and individual colleges. Financial aid can be broadly categorized into merit-based and needs-based types. Needs-based aid is particularly aimed at low- and middle-income families, while merit-based aid is awarded based on achievements such as community service or academic talent.
The application process for financial aid typically involves completing the Free Application for Federal Student Aid (FAFSA), which assesses family income and savings to determine eligibility. Recent legislative changes, like the FAFSA Simplification Act, aim to make this process more accessible. Additionally, various strategies are available for students to minimize loan debt, including part-time work, military programs, and community college tuition initiatives that have gained traction in numerous states. Colleges may adopt either need-blind or need-aware admissions policies, affecting how financial need influences acceptance decisions and fostering diversity among student populations.
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Financial aid
Most students need some form of financial aid in order to attend college. According to data released in 2023 by the National Center for Education Statistics, an estimated 72 percent of undergraduates received financial aid during the 2019–20 school year, with the average amount per student at just over $14,000. Student aid can come from a number of sources, including scholarships, grants, loans, and work-study employment. The federal government provides financial aid through several programs, including Pell Grants and Direct Loans. Students can also receive aid from state governments, nonprofit organizations, or the private funds of individual schools. During the 2019–20 academic year, 55 percent of undergraduates received federal aid, while 23 percent received aid from state governments and 28 percent received aid from institutions.
Overview
High school guidance counselors usually advise students to develop a list of colleges to which they will apply. When developing this list, students need to weigh their choices carefully and consider whether they want to go to a private college, a community college, or a state college to obtain their education. Ivy-league schools with name recognition, such as Dartmouth, Harvard, and Yale, will cost substantially more than a smaller state university and thus necessitate more financial aid. The average student loan debt from private universities was about $60,000 for a bachelor’s degree in 2023, according to the Education Data Initiative, though it can rise much higher.
The two main types of financial aid students can apply for are merit-based and needs-based. Needs-based financial assistance depends upon the family income and is especially set up to assist low- and middle-income families. Merit-based financial aid gives students the opportunity to earn financial assistance in the form of an award or grant based upon community service, recommendations, and/or essay writing talent.
The federal government offers several kinds of grants, which are a kind of financial aid that does not have to be repaid under most circumstances. One type of federal grant is a Pell Grant, which is awarded to those with documented financial need. In the 2024–25 school year, the maximum amount awarded for a Federal Pell Grant was $7,395. Other federal grants include Federal Supplemental Educational Opportunity Grants (FSEOG) and Iraq and Afghanistan Service Grants, for students who had a parent or guardian die in Iraq or Afghanistan while serving in the military. There are also grants available through organizations such as the Veterans of Foreign Wars (VFW), Kiwanis, and grant websites such as Fastweb.
Filing a Free Application for Federal Aid, or FAFSA, form the year they apply to college is how most students obtain some form of needs-based financial aid. The FAFSA will ask for the parents' or guardians’ and child’s income, and also count savings and 529 plans (college savings plans) for the expected family contribution (EFC). In late 2020, Congress passed the FAFSA Simplification Act, with the goal of reducing the number of questions and making the application easier for students to complete. One major change to the form scheduled to take effect for the 2024–25 school year was changing the term EFC to Student Aid Index (SAI). The change was meant to reflect the amount a family can afford to pay rather than the amount they are expected to pay. The FAFSA Simplification Act also altered the methodology used to determine a family's SAI, removing such factors as the number of family members attending college. Furthermore, the Act increased eligibility for Pell Grants to more students.
Students eager to owe as little as possible after college have options to work part-time or join certain military programs, such as the United States Coast Guard (USCG) or Reserve Officers' Training Corps (ROTC). In exchange for several years of service, the military will finance a student’s education. If a student obtains federal financial aid and does not find the right job after graduation, repayment options allow the student to either defer or lower payments over time. During the 2020s, many states began passing legislation to offer free tuition at community colleges. Such initiatives developed in part amid overall declining enrollment during the COVID-19 pandemic. By 2024, at least 31 states offered statewide or state-sponsored free college tuition programs. The administration of President Joe Biden likewise pushed for legislation that would make all community colleges free for two years.
While most colleges consider a student's need for financial aid when evaluating applicants during the admissions process, other schools take a need-blind admissions approach, meaning they do not consider students' financial status when making admissions decisions. Such schools tend to admit more students in need of financial aid than colleges without need-blind policies. Advocates of need-blind admissions believe such policies help colleges achieve greater diversity in their student bodies.
Bibliography
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