How to Pay for College: Decoding Your Financial Aid Package

Let’s keep it real. The first step to paying for college is having honest conversations about how much debt you can realistically gain while going to school. During your college search, you will notice that every college offers a different financial aid package. Give yourself room to explore all options.

We know this part can get a bit confusing. That’s why we’re here to help you decode the financial aid process and better understand what’s right for you.

There’s a lot of ground to cover – let’s dive right in.

  • FAFSA: Free Application For Federal Student Aid

Getting financial aid starts with filling out your FAFSA application. This will help determine your eligibility for opportunities like federal grants and loans.

Here’s what you’ll need to know to get started:

  • The application is totally FREE!
  • It takes about 20 minutes to complete.
  • Aim to submit the application in October of your senior year of high school.
  • You can file a form via, myStudentAid mobile app, or manual PDF.
  • Colleges will use your results to create an award letter detailing what financial aid support you’re qualified for.

PRO TIP: Get in front of the line! There is a limited amount of aid available which means it could run out if you miss the deadline. Estimate your potential award letter before submitting an application with the fafsa4caster tool.  

        First time filling out the FAFSA? Here are some tips to get you started:

  • You and one parent will need to create a FSA ID.
  • You’ll need to gather some info about your parents.
  • Use the blue and white question mark icons to help guide you along the way.
  • List up to 10 schools to receive your information automatically.

3 Tips for the FAFSA to Maximize Financial Aid

Video courtesy of The Bemused: Making Sense of Money
  • Scholarships and Grants

Did someone say free money? Scholarships and grants are a crowd favorite because you don’t have to pay them back!

Photo courtesy of Google.

Though sometimes people think they are the same, there is a difference between the two options:

  • Grants are need-based and are offered to students who show financial need on the FAFSA.
  • Scholarships are merit-based and are given to students for academic, athletic, or artistic ability.

PRO TIP: Get a head start! There are scholarship opportunities available for students as early as sophomore year. What are you waiting for? Kick-start your search with these sites:


5 Tips to Get College Scholarships

Video courtesy of Girl With Drive
  • Federal Loans AKA Stafford Loans

Student loans can be scary and harder to decode than the Game of Thrones plot twists. Don’t worry – we’re here to help you understand all of your options.

  • A loan is when you borrow money from a bank with the deal to pay it back.
  • Since they’re taking a risk lending this money, they charge a monthly fee. That is called interest.
  • You will have to sign a promissory note, or contract, before committing to anything.
  • You’re required to take entrance counseling, a quick quiz, before signing to make sure you understand the agreement.
Photo courtesy of Google.

There are different types of loans you can take out. You might see these on your award letter:  

  • Subsidized loans are need-based. They don’t collect interest while you’re attending school. This means the amount you borrow at the beginning will remain the same after graduation.
  • Unsubsidized loans are NOT need-based and DO collect interest while you are attending school. You have the option to pay the monthly fee while in school. If not, your end debt will grow.
  • Federal PLUS Loans are offered to parents who show financial need. Your parents can request consideration through Make sure you file for FAFSA first!
  • Perkin Loans are also need-based. They offer a fixed 5% low-interest rate.

3 Minute Guide to Student Loans

Video courtesy of The Financial Diet.

Things to keep in mind:

All of these options offer “fixed” interest rates. A fixed interest rate means the amount charged every month for borrowing this money will not change. This makes it easy to predict any future payments.

Now what about private loans? These won’t show up on your college financial aid package since they are issued directly through private lenders like banks or Sallie Mae. You will need to contact them directly to learn more about their options.

PRO TIP:  Is your brain fried yet? We understand this is a lot of information to process at once. We recommend you sit with a college financial aid advisor to review all of your options thoroughly.

Image courtesy of Google.
  • Federal Work-Study

Think of this as a part-time job on campus to help you with the day-to-day costs of being a college student. So when that iced coffee before class craving hits – you have money to cover it.

  • You receive a paycheck based on how many hours you worked that week. Just like a job!
  • Remember, it is not meant to cover large costs like tuition and housing.
Image courtesy of Giphy.

PRO TIP: Whether you believe you’re eligible for these options mentioned above or not, don’t take yourself out of the game! To learn more about financial aid, visit our Rutgers Financial Aid video library.