Should I Apply for Financial Aid for College? Your Guide

Man placing coin in black piggy bank to save for college
August 28, 2023

Reviewed by:

Former Admissions Committee Member, Columbia University

Reviewed: 5/4/22

Financial aid is when you get the monetary assistance to help pay for college. Any student going to college should consider whether they need financial help and understand the debt definition associated with it.

“Should I apply for financial aid?” stands as one of the most critical questions for college besides school selection. Every prospective college student should make this decision carefully, considering their situation in life and where they want to be in the future. College tuition, board, and more have increased steadily over time, on top of all the other fees students need to pay. 

Most people cannot afford the starting price of college every semester. If a college’s price tag is more than you and your family can afford to pay, you should consider your financial aid options to help lessen the burden of tuition. 

There are many factors that determine your eligibility to receive financial aid and how much you will receive overall. Once you know your eligibility and how much you’ll receive, you can talk with your parents and plan how to pay for costs not covered in your financial aid package.

Who Can Apply for Financial Aid?

So, who can apply for financial aid? The short answer to the question of who can apply is every American citizen and the people who are becoming a citizen. More specific factors determine who can apply for the FAFSA. Still, some of the more basic ones include green card holders, people with Arrival-Departure Record, battered immigrant status, or a T-Visa. 

In order to complete your FAFSA, you need the following: 

  • High school diploma or equivalent
  • An active application to college
  • U.S. social security number

Since immigration processes take enough time that it might make you miss deadlines, the U.S. government keeps people in mind through this. Regardless of who you are, you should strive to achieve high grades to ensure you remain eligible for FAFSA (and give yourself a better chance of acceptance to the school of your dreams). 

Outside of the FAFSA, there are other options for aid. Student Aid service offered by the government offers a parent plus loan program. A payment plan feature may be able to help your parents pay off your loans over time. 

Keep in mind that the parent loan has a different interest than the general FAFSA loans. The direct loans the student takes out will have a lower interest rate of about 3.73.%, while the direct PLUS loan for parents has about a 6.28% interest rate. 

Besides direct government loans, there are many different loan companies that can help you pay off the remainder of your loans, as the FAFSA usually doesn’t cover everything. However, expect  interest rates on these to be higher. These loans are considered private and owned by the company that offers them. Loans like this are much more likely to fluctuate with economical situations. 

There are many scholarships available that can lessen the burden of your tuition and other costs, and even some that can be used to pay off student loans. There are tons of opportunities for scholarships, and most colleges offer them. If your grades are good enough, your college of choice may offer you a full ride to cover costs such as tuition, board, books, and more. However, there are thousands of scholarships available with specific criteria, such as:  

  • Writing an essay
  • Showing some sort of merit other than grades, like leadership skills or participating in an organization

Many financial institutions will offer these, with varying amounts of money awarded. Make sure to research these to learn what they offer. You may be able to reduce the cost of college by applying for many scholarships.  

Should Wealthy Students Apply for Financial Aid?

Students who are in a good financial position may ask themselves, “Should I apply for financial aid?” From a general perspective, wealthy students may not have a need for financial aid for college. However, that may not take in the whole picture. Some students who come from “wealthy” families may still need financial assistance. 

There are numerous situations where students from wealthier backgrounds may need financial aid. For example, they may need financial aid because they are not getting enough help from their parents. This is why financial aid is important, as it can bridge those gaps for students that need the help. 

If your family has enough wealth that they could pay for college, you may consider doing so. But financial aid is always an option if the need arises. Remember, being in a good financial position doesn’t impact who can apply for financial support. 

Types of Financial Aid to Apply For

Types of Financial Aid

Financial aid comes in a few different packages. The types stand out by either being from a governmental or private organization, and whether you need to pay the aid back or not. Each program helps people with their unique needs and life situations and awards those that have substantially more debt or cannot afford what they have. 


The first type of aid comes in the form of loans. Your student loans will come due after you’ve graduated college and cover some (if not all) of what you owe. Loans enable you to pay off what you owe at an affordable rate over time.

Government loans are the most widely available, but some students seek personal loans. Either way, you will have to pay interest, an important point you should consider when deciding whether or not you want to take out the loans. If you can, you should consider prioritizing the aid packages awarded to you rather than loaned.  


Scholarships are a type of financial aid that offers free money that you do not have to pay back. Most scholarships come from organizations that award the student for personal aspects or achievements they have made. You can win scholarships through sports, academics, leadership, extracurricular involvement, and much more. 

Scholarships can be both large and small. The more you apply for, the more likely you will be able to pay off your college debt. Every little bit helps, as college is expensive, so don’t discount smaller scholarship opportunities.


Grants are government awarded money that you do not have to repay. You can apply for grants after filling out your FAFSA. Many grants are available for students with unique backgrounds and interests, such as teaching majors, military service awards, or students who have no other way to attend college outside of a government grant.  

Teacher Education Assistance for College and Higher Education (TEACH) Grants, or Iraq and Afghanistan Service Grants.

If you can’t find a way to pay for some of your college experience, a grant may help. Regardless of what type of grant you have, you must qualify for the FAFSA and reapply for it every year to keep receiving them. 


Work-study is another financial aid program that provides a job for a student to work while not attending classes. Work-study awards financial aid in exchange for the hours put into the job. Students can choose to work on-campus or off-campus for non-profit organizations. The program considers factors such as: 

  • The school 
  • Your needs
  • When in your college career you applied to work out how much the government is willing to give you in exchange

You can apply for work-study after the FAFSA as well.

When Should You Apply for Financial Aid? 5 Factors to Consider

when to apply for financial aid: factors to consider.

When the time comes to apply for aid, be it government-provided, from outside parties, parents, or scholarships, several factors go into the process. Timing, your achievements, and finances available all factor into when you should apply.

1. Always Fill Out Your FAFSA

Everyone should at least plan on applying for the FAFSA every year. Regardless of your financial situation and aid you’ve received, consider it as a necessity. The FAFSA only covers one year of tuition, so in order to receive aid money for the next year you will need to fill it out again and include any updates. 

The FAFSA’s deadline every year is October 1st. Most incoming freshmen complete the FAFSA for the first time as a part of the process of applying to college. Once the FAFSA comes out, think about how much you receive in loans and how that affects your decision to take it or not. How much are you paying? Will that be affordable after you graduate?

2. Consider What Your Merit Can Get You

Remember, any loans that are part of your financial aid package is aid you have to pay back–with interest. The more funding you can get from other sources can reduce the amount you will have to pay back later. 

If you’re planning on going into college, make sure to put as much effort into your grades as possible. Ultimately having a high GPA may give you better access to grants and scholarships. Merit can take you far in a college setting.

3. Apply All Your Scholarship Funding – It May Cover Everything

If you have a good GPA, the number one thing you can do is apply to as many scholarships as possible. Every bit of that money is free, whereas you have to pay student loans back. If you have good enough grades, some colleges may even offer you a full ride and cut off tuition and maybe even more of the fees you need. Not having debt can put you in a good position. 

Ultimately you may not need the loans if you can get enough scholarships. However, don’t expect to get there without putting in a lot of effort. 

4. What Kind of Fiances Do You Have? Can You Afford Everything?

If you are from a financially poorer household, applying for aid may end up being a necessity. However, keep in mind that what you can get out of aid may depend on the tax bracket you fall into. 

A student could get virtually nothing in some cases, even in the lowest tax brackets. Make sure to do your research and apply to colleges that would accept you. Keep in mind that they are a business and are looking for people with the capacity to pay them back. Having enough merit can take you far, as you may be able to break college barriers. 

5. View Your FAFSA – Can You Afford the Loan Interest Long Term?

Once you review your FAFSA, one of the more critical steps is to keep track of it and current interest rates. When taking out student loans, the timing in an economic sense can drastically change the rates you can get on your loan. In bad economic periods, you may not be able to get a loan. On top of that, interest rates may be a factor in what kind of loan you can get. 

Keep track of your loans closely and monitor when you should put larger payments into your loans.

FAQs: Financial Aid for College

Students may not know all about financial aid when starting their college applications. Here are some common questions that may answer some of yours. 

1. When Should You Apply For Financial Aid? 

The general guideline for college applicants is to apply to schools first, then fill out your FAFSA. 

The FAFSA gives you financial aid based on your need to go to your accepted college.

2. Is It Worth Applying to FAFSA? 

Applying to FAFSA is generally worth it for most students. Even if filling it out is a pain, you may be eligible for more financial aid than you realize. Remember, there are other types of college financial aid available through FAFSA too. 

3. Does Financial Aid Affect Admissions Decisions? 

Applying for financial aid may or may not impact your admissions decisions. If a school has need-blind admissions, they consider your ability to pay when making a decision. However, some private universities may factor in your ability to pay. 

4. What Types of College Financial Aid Do You Need to Pay Back? 

You may have to pay back some forms of FAFSA, but not others. Typically students are expected to pay back private and school loans with interest. Other types of school financial aid you receive, such as grants and scholarships, usually don’t need to be repaid. 

5. Can You Get Financial Aid For Two Colleges? 

No, you can't get financial aid for two colleges simultaneously, at least not federal student aid. If you're transferring to another college, you should check with your new school to see if the financial aid you had will transfer. 

6. Should I Apply For Financial Aid As an International Student? 

Although international students aren’t eligible for federal aid through FAFSA, they may be eligible for institutional aid. If a school offers financial aid to international students, they may need to fill out other forms such as the CSS Profile or the ISFAA. But, do you pay back financial aid for college as an international student? The answer again depends on the type of aid you receive: loans need to be repaid. 

7. Will the FAFSA Cover All of My Tuition?

 Most of the time, FAFSA will not cover the entire cost of your tuition and other expenses. One of the most common financial aid issues for college students is that they may be “too poor for college, too rich for financial aid.” To lessen the burden of this college student financial aid issue, you can look for merit-based scholarships and look for schools that offer significant tuition discounts. 

8. What Percentage of Students Receive Financial Aid? 

Recent data shows that 86% of first-time, full-time undergraduate students were awarded financial aid. A higher percentage of first-time students received some type of financial aid if they attended a private nonprofit institution, at 90%. 

Final Thoughts 

If you’re wondering if you should apply for financial aid, the answer is generally yes. You should consider applying for the FAFSA and other financial aid regardless of your financial status. Eligibility depends on your background, grades, and your family’s financial history. 

The packages that the government lends will come due after college, but the money can help here and now be more affordable for you. If you use other forms of loans, consider prioritizing them based on interest rates.

If you can, applying to as many scholarships as you’re eligible for is a spectacular way to pay for tuition and other costs. 

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