Financial Aid •
Updated November 19, 2021
8 Facts About Financial Aid in 2021
Learn about 8 facts on financial aid that can help you get the most financial aid to pay for college.
Financial Aid Analyst
A huge part of planning for college is figuring out how to pay for it.
About 86% of first-year undergraduate college students get some type of financial aid to help make ends meet.
Still, every year over $2 billion in student grants (free money that you typically don’t have to pay back) goes unused!
To help you make the most of the available financial aid, let’s review 8 financial aid facts that you need to know.
1. Some financial aid is free money
College isn’t cheap, and many families can’t afford to pay for all college expenses. But, student loans should never be your first choice—eventually, you have to pay that borrowed money back.
When looking for financial aid, first seek free money (scholarships and grants) and earned money (work-study programs). You should only consider borrowed money after you’ve exhausted those two types of financial aid.
You can qualify for free money by showing a financial need or some form of achievement—even something as crazy as making the coolest duct tape prom dress.
Free money is free financial aid because you don’t have to pay it back as long as you attend school part-time.
Let’s review the two types of free money: grants and scholarships.
A grant is free money often based on financial need. To qualify for grants, you show that your and your family’s income aren’t enough to pay for college.
Grants are available from state governments, colleges, and private organizations.
Many grants come from the federal government. For example, the Federal Pell Grant is a federal grant of up to $6,495 for undergraduate students.
Other federal grants are available for students pursuing specific careers. The Teacher Education Assistance for College and Higher Education (TEACH) Grant is a federal grant for undergraduate and graduate students in eligible schools who are pursuing a career in teaching.
A scholarship is another type of free financial aid that you don’t have to pay back after graduation.
Schools and private organizations offer scholarships to attract students to a specific school or to pursue a career in a specific field or industry.
You can qualify for a scholarship based on many factors, including:
Area of study
Race or ethnicity
While all grants require you to prove financial need (you need additional help to pay for college expenses), not all scholarships do.
2. You can work and keep your financial aid
When you receive free financial aid, such as a grant or scholarship, you’re still able to work and keep your financial aid.
As long as you attend your school at least part-time, you’re eligible for free financial aid.
You may also be able to work to earn more financial aid.
Earned money is another type of financial aid for students with financial need. Work-study jobs are available to eligible undergraduate and graduate students.
Every year, about 18% of students earn financial aid through work-study jobs! Work-study jobs are available on and off-campus.
Universities, local nonprofit organizations, and the federal government employ students through work-study jobs.
Keep in mind that most work-study jobs pay an hourly minimum wage. On average, undergraduate students earn $1,794 per year through federal work-study jobs.
You can only work up to the number of hours that would equal your federal work-study award. If you want to work additional hours, you'll have to earn an additional federal work-study award.
FAQs about work-study jobs
Let’s look at some frequently asked questions (FAQs) about work-study jobs.
Does receiving a work-study award guarantee me a job?
No, you still need to find an eligible job.
Landing a work-study job is a first-come-first-served process, so plan to apply for jobs as soon as you find out about your award. There are jobs available on and off-campus.
Do earnings from a work-study job affect my next year’s FAFSA?
No, you can deduct what you earn from your work-study from your income reported on your FAFSA.
Will my work-study job carry on to next year?
Not necessarily. First, you have to complete a FAFSA every year. You can continue on a work-study job only if you receive a work-study award next year.
Plus, your current employer would need to rehire you.
3. Need-based financial aid is available in all sizes
A common misconception about need-based financial aid (free financial aid for students with financial need) is that it's only available to students with very low incomes.
This misconception may explain why the number of students completing the FAFSA continues to decline—68% of families completed the FAFSA for the 2020-2021 school year.
The reality is that the federal government had $32 billion in federal grants in 2020—$2 billion went unused in that year.
In 2020, the average federal grant was $5,179 per year. Need-based financial aid is available in all sizes.
A Federal Pell Grant for undergrad students ranges from $639–$6,495 per year. The average amount for this type of financial award is $3,900.
The federal government decides how much money you receive using your expected family contribution (EFC).
Even if you weren’t eligible for a Federal Pell Grant due to a high EFC, you might still qualify for other types of grants.
For example, the Iraq and Afghanistan Service Grant is free money for students who had a parent or guardian who died during military service in Iraq or Afghanistan.
You need to submit your FAFSA every year to find out what need-based financial aid you qualify for.
4. The FAFSA deadline varies per state
Every year, you’ll need to complete your FAFSA to be eligible for free and earned money.
The federal FAFSA deadline is June 30 of the academic year that you attend. So, the FAFSA deadline for the 2021–2022 school year is June 30, 2022.
Your school’s state affects that deadline. If you were planning to attend a school in Connecticut, the FAFSA state deadline was already in February 2021.
Here’s a map showing the 2021-2022 FAFSA state deadlines across the US.
In addition to the federal and state deadline, your school may also have a different deadline.
If you’re going to school in North Carolina, North Dakota, or Oklahoma, you’ll want to complete the FAFSA for the 2021–2022 academic year as soon as possible after October 1, 2020! Schools in these states assign financial aid on a rolling basis until funds are gone.
While the best date to fill out the FAFSA is as soon as possible, check with your school’s financial aid office to learn more about school and state-specific deadlines.
5. You can enter up to 10 colleges in your FAFSA
You have to fill out a FAFSA every year. Each year, you can list up to 10 colleges.
All of those schools will receive a report on your FAFSA that year. It’s a good idea to include all schools that you’re considering to save time in the application process.
For federal financial aid, the order of the schools in your FAFSA doesn’t matter.
But the order of schools in your FAFSA is important in certain states. Some states use only your top choice for awarding financial aid. Other states award financial aid regardless of the order of your school choices.
Let’s provide more details on how the order of schools in your FAFSA affects your financial aid.
School in first place: Massachusetts, Michigan, Pennsylvania, West Virginia
Schools in first 2 places: Connecticut
Schools in first 3 places: Vermont
Schools most likely to attend in first places of list: South Carolina, Illinois
School order doesn’t matter: Alabama, Alaska, Arizona, Arkansas, California, North Carolina, Colorado, North Dakota, South Dakota, Delaware, District of Columbia, Florida, Georgia, Hawaii, Indiana, Iowa, US Virgin Islands, Kansas, Kentucky, Louisiana, Maine, Maryland, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Jersey, New York, New Hampshire, New Mexico, Ohio, Oklahoma, Oregon, Puerto Rico, Rhode Island, Tennessee, Texas, Utah, Virginia, Washington, Wisconsin, Wyoming
When you get a student aid report (a summary of the federal government’s review of your FAFSA that schools use to create a financial aid package offer), you may make changes to your FAFSA and add more than 10 colleges.
6. The FAFSA isn’t the only application to seek financial aid
The College Scholarship Service (CSS) Profile is another application to seek non-federal financial aid at some private schools.
Unlike the FAFSA, the CSS Profile has a $25 fee, plus an extra $16 per each added school report.
Filling out the CSS Profile is a worthwhile investment—83% of students at 4-year private colleges receive some form of financial aid.
About 200 schools require a CSS profile as an aid assessment tool. Here’s that list of schools.
Financial aid can also come from your state’s department of education or other education agency. Contact your state agency for more details because options vary from state to state.
7. A financial aid offer isn’t set in stone
Your financial aid offer isn’t final until you accept it. Think of the first financial aid offer as the beginning of a negotiation.
Even if you get a “no” the first time, you may still try to negotiate or appeal your financial aid award.
If your financial situation changes dramatically, you go through a major life event (e.g., death of a parent or spouse), or you made an error in your FAFSA, your school’s financial aid letter won’t match your current financial needs.
If any of these apply to you, you should try to appeal your financial aid.
Tips for appealing financial aid
Find out if there’s a deadline and the name of the financial aid officer. Submit your financial aid appeal to your school’s financial aid office as soon as possible.
Write a financial aid letter. Break down the reasons for your appeal in detail.
Include necessary supporting documentation. Strengthen your case by including supporting documents that back up each one of the reasons that you mention in your letter.
Proofread your letter and review the entire package. Reduce the chances of delaying your appeal due to accidental errors.
Review our full guide on how to appeal your financial aid letter.
8. Some student loans don’t start accumulating interest from day 1, but all private loans do
Once you’ve covered all your options for free financial aid and work-study jobs, you’ll have to figure out how to pay for the rest of your college expenses.
At this point, you can consider taking a student loan. You’ll have the option to borrow money to pay for college from the federal government or private organizations.
If you have to seek a student loan, start with federal subsidized loans (also known as direct subsidized loans because you borrow directly from the federal government).
Why? With a federal subsidized loan, the US Department of Education will pay for the interest of the loan while you attend school part-time. You won’t have to pay interest until after you graduate and a 6-month grace period ends.
Unlike a federal subsidized loan, all private loans aren’t subsidized—they accumulate interest from day 1.
By choosing a federal subsidized loan over a loan without a subsidy, you’ll save years’ worth of interest while you complete your degree.
Knowing that you have financial aid can help you make the most of your studies. A strong financial aid package not only helps you cover your college costs, but it enables you to focus on school—not on school bills.
As you can see from this list of financial aid facts, the financial aid process can change from year to year.
With Mos, you can take the guesswork out of your financial aid application and find out every state and federal aid program you’re eligible for.
This can be the difference between earning $13,000 and $42,000 more per year than what you’d receive if all you did was complete the FAFSA.
If you want to get the most financial aid available to you, visit Mos.com today. We’re here to help.