Apply for federal financial aid, state aid, grants and scholarships. The interest rates on federal loans are relatively low, and there are grants and scholarships available as well that do not require recipients to pay back. Most aid programs require students to demonstrate financial need based on their parents' income. Others are merit-based. Cast a wide net when it comes to applying for financial aid to maximize the potential of receiving an award.
Review the federal financial aid requirements. To receive aid, students must demonstrate financial need in most cases. Students must have a high school diploma or equivalent, be a U.S. citizen or eligible non-citizen, be accepted or enrolled in an approved school, show satisfactory academic progress, have a valid Social Security number, and file a Free Application for Federal Student Aid (FAFSA). Eligible students cannot be in default on a prior student loan.
Submit a FAFSA. This form will determine a student's financial need and eligibility. It is free, so file an application regardless of the family's income. Most students qualify for some degree of aid. To file, have handy the family's most recent income tax returns and be prepared to answer extensive questions about income, assets, family size and other information. Have information like Social Security numbers and birthdates ready to expedite the process. The earlier a student files, the better the chances of receiving aid.
Research financial aid award options. Financial aid is awarded in the form of loans, grants and work-study programs. Grants, like scholarships, are need- and merit-based gifts that do not require repayment. The most common grants in the U.S. are the Pell Grant, Federal Supplemental Educational Opportunity Grant, SMART Grant and Academic Competitiveness Grant. Loans must be repaid, but federal-loan interest rates are traditionally much lower than those of private loans. Perkins, Stafford and PLUS loans are the most common federal loans. Work-study programs arrange for tuition, fees, room and board and other educational expenses to be paid in exchange for the students working a campus job. Determine which of these options is best for the family's needs based on their ability to repay.
Use the FAFSA4caster on the FAFSA website to estimate financial aid awards. This forecaster is designed to give a fairly accurate representation of what a family might receive based on income, assets and other factors.