Your Guide to Financial Aid

Financial aid includes all assistance with paying for college such as grants, scholarships, work-study and loans.

Anna HelhoskiAugust 14, 2020
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Your Guide to Financial Aid

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Applying for financial aid is the key to getting help with paying for college.

Financial aid includes free money like grants, scholarships and work-study, as well as government loans that you repay. You’re likely to end up with a combination of sources, but you should always maximize all free aid before turning to loans. If you do borrow, choose federal loans before private options.

Financial aid: What's typical?

The type and amount of aid you receive will depend on what you’re eligible for. Here are the average amounts students receive and the portion of annual college costs those amounts typically cover, according to "How America Pays for College," a study released in 2020 by Sallie Mae and market research firm Ipsos.

Source

Amount

% of total

Parent borrowing

Federal parent PLUS loans

$899

3%

Private loans

$482

1.6%

Home equity loans or line of credit

$322

1.1%

Credit cards

$222

0.7%

Retirement account loans (including 401[k], Roth IRA or other IRA)

$200

0.7%

Other loans

$413

1.4%

TOTAL

$2,538

8.5%

Student borrowing

Federal student loans, such as direct, Stafford or Perkins loans

$2,514

8.4%

Private loans

$1,172

3.9%

Student credit cards

$150

0.5%

Student other loans

$207

0.7%

TOTAL

$4,043

13.5%

Paid by parents from

Parent current income

$7,180

23.9%

College savings funds, such as a 529 plan

$3,368

11.2%

Other parent savings or investments

$2,061

6.9%

Retirement savings withdrawal (including 401[k], Roth IRA or other IRA)

$463

1.5%

TOTAL

$13,072

43.6%

Paid by student from

Student current income

$918

3.1%

Student savings

$734

2.4%

Federal work-study

$338

1.1%

Other student savings or investments

$313

1.0%

TOTAL

$2,303

7.7%

Other sources

Scholarships (received from the school or outside organizations or businesses)

$4,661

15.5%

Grants (federal, state or school-based)

$2,965

9.9%

Relatives or friends (money that doesn't have to be repaid)

$436

1.5%

TOTAL

$8,062

26.9%

Total paid

$30,017

100%

The total amount of $30,017 is the average that families spent on an undergraduate education in 2019-20.

To help you navigate the complicated financial aid process, we’ve chosen articles below that address typical questions students have. They’ll even explain the jargon.

Start by finding the description that best matches where you are in the financial aid journey.

You think your family’s income qualifies you for free aid

You’re not sure how grants are different from scholarships or how to get either one

You want a part-time job in college that will help pay for school

You received the Pell Grant last year

You’re not sure how much you are allowed to borrow each year

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