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February is financial aid awareness month, and those students who are getting ready to embark on the journey to college will have a lot of decisions to make, including their parents. Students will have to decide what school they are going to attend, what major they will choose as well and whether they should live on or off campus. But of all these decisions, and perhaps the most difficult one that has to be made, is how a college education is going to be paid for? Qualifying for financial aid can be confusing and often times frustrating.

Students who do not have the money available to pay for college often rely on financial aid. But, where to begin? You can celebrate financial aid awareness month by giving yourself the gift of financial literacy by educating yourself on student loans.  Student loan debt is at an all-time high in the country. Many borrowers do not understand the ramifications student loans have. It is in the student’s best interest to learn as much as they can about student loans before applying so that they are in the best position to make decisions about how much they borrow.

In order to achieve your education at the lowest cost possible, here are five things that most people don’t know about financial aid that can help make the process go smoother as well as help you avoid future financial hardship for both parents and students alike.

Look at Scholarships and Grants First

Often referred to as “gift aid” grants and scholarships are free money. While researching financial aid may not be the most thrilling, taking time to view all of the options available out there can really help you make an informed decision. Before you consider student loans, look into any scholarships and grants that you might be eligible for. Grants and scholarships can come from your state government, federal government, your college or career school as well as a private or nonprofit organization. There are tons of resources available; you just have to do a little research to find them and be sure to meet all deadlines! Even if you aren’t given a generous grant or scholarship, several small ones can add up and help you save on your college education. Educate yourself on the type of scholarships that your top schools of choice offer and apply for as many as you can!


This financial aid calculator offered through the Department of Education, allows students to estimate aid early on or before you fill out a FASFA form. To get a better picture of how much financial aid you might receive, you’ll need to include data from your tax returns as well information about your assets. This calculator also acts as a good warm up to filling out the FASFA application, since many of the questions on both forms are the same. If used effectively, this calculator can alleviate some of the stress that comes when determining a school. Being able to see the bigger picture of what your costs might be, may help you to narrow down your school choices and help you determine what school is the best financial fit for you. 


If you need to apply for financial aid, filling out the Free Application for Federal Student Aid (FAFSA) is essential. This form determines your eligibility for financial aid; it pays to file your FAFSA early! FAFSA can be considered a first come, first served pool at certain schools. If funding is limited and you submit your application at the very end of the process, this can really hinder your chances of receiving a strong financial aid package. Luckily, a brand new FAFSA app was just created with the intentions of simplifying the application process. 

Financial aid packages are negotiable

You may not have known this, but sometimes financial aid packages can be negotiated. Typically financial aid packages are determined by the information you filed on your FAFSA and other information included within the student’s application. You have to act fast if you want to make an appeal. Actions should be taken before the May 1st college deadline. One option available to you can be filing an appeal with the college you were accepted to. Many institutions have a special protocol on financial aid appeals, so make sure to follow their instructions. Be as specific as you can in your appeal form don’t be broad really explain your financial hardship. You can also use your grades, sports, and talents you may have as leverage. However, be sure to be courteous, polite and professional when communicating with your potential college financial aid office.

Federal Loans are better than Private Loans

If you can’t avoid taking out student loans, federal is better than private. Typically, federal student loans have lower interest rates and more flexible repayment options than private loans. Interest rates can make all of the difference when it comes to repaying your student loans. High interest rates can mean paying much more than you originally borrowed. Federal student loans can offer fixed interest rates and income-driven repayment plans that are usually not offered with private student loans. Before taking out a private or federal student loan, research as much as you can on the loan type and available repayment options.

If you’ve wondered how your student loan has impacted your credit, you can check your three credit reports for free once a year. To track your credit more regularly, Credit.com’s free Credit Report Card is an easy-to-understand breakdown of your credit report information that uses letter grades—plus you get a free credit score updated every 14 days.

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