Paying for College: The Financial Aid Puzzle | 01.27.10

Posted in FAFSA, Private Student Loans By Student Loan Network Staff

The cost of a college education is rising every year. This year the average cost of a private four-year school was $26,273, up 4.4% from last year, and the average cost of a public school was $7,020, up 6.5% from last year. For most families, paying for college is a struggle. If you feel like you do not have all the pieces of the financial aid puzzle, you are not alone.

On January 1st the 2010-2011 FAFSA (Free Application for Federal Student Aid) was released. The FAFSA is probably the most important part of the financial aid puzzle. If you are planning on attending college in the fall of 2010 you should be in the process of submitting this form. The FAFSA determines how much federal financial aid you are eligible to apply for. There are three basic types of federal student aid:

  • Grants: Grant money is financial aid that does not have to be repaid. Most grant money is based on financial need.
  • Work-study: Work-study money is earned through a job or near campus. Work-study money does not have to be repaid.
  • Loans: Loan money, including subsidized Stafford loans and unsubsidized Stafford loans, is awarded by the government and must be repaid with interest.

Federal financial aid can be a huge help when paying for college, but since most federal financial aid is awarded based on need, not everyone who files a FAFSA will be awarded sufficient aid to cover their education. So what happens when your federal Stafford loans and grants are not enough? Luckily, there are other pieces of the financial aid puzzle that can help you pay for college.

PLUS Loans are federal student loan options that are not based on financial need, but rather on credit. There are two types of PLUS loans; Parent PLUS loans and Graduate PLUS loans. If you are an undergraduate student, your parents can apply for a PLUS loan to help supplement the cost of your education. If you are a graduate student you can apply for a PLUS loan for yourself. With the federal PLUS loan you can borrow up to 100% of unmet financial need. PLUS loan money can also help you pay for educational costs not covered by your tuition including housing and supplies.

Some students choose to add private student loans to their financial aid puzzle. Private Student Loans are an alternative student loan option. Although you should always apply for federal financial aid before pursuing this option, private student loans have a few advantages. Private student loans are awarded based on credit rather than on need. You can use private student loans for any education related cost including textbooks, housing and transportation. If you are looking for a private student loan, the new private student loan comparison tool on can help you determine which lender and loan best meets your needs.

Because private student loans are based on credit, most students need a parent, family member, or close friend to cosign the loan. A cosigner is an individual who agrees to pay any debts if the primary account holder is unable to do so. This ensures to the lender that the loan will be paid back even if the student borrower does not have the funds to make payments.

The final, and quite possibly the best, piece of the puzzle is scholarships. Scholarships are favorable because unlike loans they do not have to be repaid. Hundreds of thousands of organizations around the country award scholarships to students based on their backgrounds, interests and accomplishments. is a website that helps you find and apply for scholarships that you qualify for.

Every student’s financial aid puzzle is put together differently. Many students take advantage of all of these financial aid options while some students only need to use one or two. Some student might qualify for more financial aid while other students might be awarded more scholarship money. Whatever your financial situation is, remember that all of these options exist to help you complete your education.

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162 Responses to “Paying for College: The Financial Aid Puzzle”

  1. Eziyi says on February 28, 2010 at 1:53 am:

    It helps .

    Reply To This Comment
  2. Kat says on February 27, 2010 at 11:01 pm:

    this was a lot of help.

    Reply To This Comment
  3. Ray says on February 26, 2010 at 7:17 pm:


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  4. chia says on February 26, 2010 at 6:41 pm:

    thank you! a lot of help!

    Reply To This Comment
  5. Gypsyb says on February 26, 2010 at 5:03 am:

    Thanks for the info…it's getting harder to find funding and our state may not be helping much this year.

    Reply To This Comment
  6. Chris says on February 26, 2010 at 1:05 am:

    this was very helpful so thank you

    Reply To This Comment
  7. Angelica says on February 26, 2010 at 12:27 am:

    its really easy to understand

    Reply To This Comment
  8. Kiera says on February 24, 2010 at 6:02 pm:

    Thanks so much for the info on financial aid. Was a great help!

    Reply To This Comment
  9. Jamsine says on February 24, 2010 at 1:02 pm:

    This is a great way to release stress from money problems!

    Reply To This Comment
  10. alexzummo says on February 24, 2010 at 2:42 am:

    this has helped me so much in realizing how applying for scholarships are so important as well as financial aid, I want to be a doctor so I know my college and medical school loans are going to be really big .

    Reply To This Comment
  11. Laterea Kandel says on February 24, 2010 at 1:24 am:

    This is a great informational article, I've learned more about financial aid in this article alone than I've found anywhere else.

    Reply To This Comment

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