For most students, paying for college is easier once they know where the help comes from. It usually comes from four places: the federal government, your state, your college and private organizations. This guide explains the main types of help, how to fill out the FAFSA form, what changed for the 2026–27 school year and how to compare offers before borrowing money.
What Is Financial Aid?
Financial aid is money that helps you pay for college or career school. It can cover tuition and fees, but also housing, food, books, supplies and transportation. Financial aid falls into four categories:
- Grants: usually based on financial need, and you don't repay them unless certain conditions apply, such as withdrawing early.
- Scholarships: awarded for grades, talent, a field of study or other criteria, and never repaid.
- Work-study: a part-time job that lets you earn money while you study.
- Loans: borrowed money that must be repaid with interest.
Grants and scholarships are often called gift aid because you keep them. Loans and work-study are called self-help aid because you either earn it or pay it back. A smart plan uses every grant you can get first, then a campus job, and borrows only to fill the gap.
Types of Federal Student Aid
The U.S. Department of Education runs the largest financial aid programs in higher education. Federal student aid includes grants, work-study and loans, and you apply for all of them with one form.
Grants: Federal Pell Grant and FSEOG
The Federal Pell Grant is need-based aid for undergraduates who have not earned a bachelor's degree. For 2026–27, the maximum award is $7,395 and the minimum is $740, according to Federal Student Aid. Your award depends on your household's finances, your cost of attendance and whether you attend full time or part time. New rules that started July 1, 2026, also matter:
- You can't receive a Pell Grant if your SAI (explained below) is at least twice the maximum award.
- You can't receive one if other grants and awards already equal your full cost of attendance.
- Workforce Pell Grants now pay for approved short job-training programs that last at least 8 weeks but less than 15.
The Federal Supplemental Educational Opportunity Grant (FSEOG) helps undergraduates with exceptional financial need. Awards range from $100 to $4,000 a year. Each college gets a limited amount and gives it out until it runs out, which is one reason to apply early. Congress kept FSEOG funded for 2026–27.
Scholarships
Scholarships are gift aid you never repay. Many organizations offer scholarships based on academic merit, talent, community service, a planned major or your background. Colleges, employers, religious groups, local businesses and nonprofits all offer them. Even small awards add up. For example, a local business might fund a $500 award for students in your town. Several scholarships together can significantly reduce what you owe each year.
Most scholarships ask for an essay, so start drafts early and tailor each one to the prompt. If you want feedback on structure, our guide on how to write an essay walks through the basics. Never pay a fee to apply for a scholarship or to "find" one for you. Legitimate searches cost nothing.
Federal Work Study Jobs
Federal Work-Study gives part-time jobs to undergraduate and graduate students who show need. Jobs can be on campus or off campus, often with nonprofits or public agencies, and offer at least the federal minimum wage, or a higher state or local minimum where one applies. You receive your earnings as a paycheck, so it helps with everyday costs rather than reducing your bill up front. Not every school has enough funding for every student, so say you're interested in this program on the form.
Federal Student Loans
If grants fall short, Direct Loans from the U.S. Department of Education are usually the safest way to borrow. For undergraduates borrowing between July 1, 2026, and June 30, 2027, the fixed rate is 6.52%, with a loan fee of about 1.06%. On subsidized amounts, the government covers the interest while you're in school at least half time. Unsubsidized amounts start building it right away.
| Year in school | Dependent students | Independent students |
|---|---|---|
| First year | $5,500 (up to $3,500 subsidized) | $9,500 (up to $3,500 subsidized) |
| Second year | $6,500 (up to $4,500 subsidized) | $10,500 (up to $4,500 subsidized) |
| Third year and beyond | $7,500 (up to $5,500 subsidized) | $12,500 (up to $5,500 subsidized) |
| Total limit | $31,000 | $57,500 |
Big changes took effect on July 1, 2026. Parent PLUS borrowing is now capped at $20,000 a year and $65,000 in total for each student. Grad PLUS ended for new borrowers, and graduate and professional students now face new annual and lifetime caps. New borrowers also choose between a standard plan and the new Repayment Assistance Plan, which sets payments at 1% to 10% of income.
How to Fill Out the FAFSA Form
You must complete the Free Application for Federal Student Aid (FAFSA) to qualify for any of these programs, and most states and colleges use it too. The FAFSA is free to file at StudentAid.gov. Never pay a company to submit it for you.
What the Free Application for Federal Student Aid Asks For
The free application asks about your family, your finances and the schools you're considering. It uses your answers to calculate your Student Aid Index (SAI), a number schools use to determine how much need-based aid you can receive. The SAI replaced the old Expected Family Contribution. A lower SAI means you qualify for more need-based help, and some students qualify for a negative SAI.
Create Your FSA ID
Before you start, create a StudentAid.gov account, also called an FSA ID. Your FSA ID is the username and password you use to access StudentAid.gov and sign the form electronically. Every contributor needs their own account, including a parent or spouse who has to provide information. Set up accounts early, because the identity check process for new accounts can take a few days.
FAFSA Information You'll Need
Gather this FAFSA information before you begin:
- Your Social Security number and your contributors' contact details.
- Tax returns from two years before the school year. The 2027–28 form uses 2025 tax information.
- Records of savings, investments and any business or farm your family owns.
- A list of the colleges that should receive your results.
Most tax information transfers directly from the IRS into your FAFSA form once each contributor gives consent, which saves time and reduces mistakes.
Which FAFSA to Fill Out and When
Fill out the FAFSA for the school year you plan to attend. The 2027–28 FAFSA covers classes from July 1, 2027, to June 30, 2028. It opened on September 23, 2026, and the federal deadline is June 30, 2028, but state and college deadlines come much earlier. If you're taking summer classes, ask your financial aid office which year's form to use. Complete a new FAFSA every year you want aid.
After Submitting: Check Your FAFSA Status
Log in to your StudentAid.gov account after submitting to check your status. Since mid-2026, most online filers see their FAFSA Submission Summary right after submitting, though some wait one to three days. If you mail a paper form, allow about 7–10 days. The summary shows your SAI, your estimated Pell Grant eligibility and any issues to fix. Review it carefully, then watch your email for requests from the colleges on your list.
Who Is Eligible?
To be eligible for most government programs, you generally need to:
- Be a U.S. citizen or eligible noncitizen.
- Have a high school diploma or equivalent, or meet another approved standard.
- Be enrolled in an eligible degree or certificate program at a college or career school.
- Make satisfactory academic progress once you're in school.
Eligibility for need-based programs also depends on your financial need. Merit awards don't, so apply even if you think your family earns too much. International students usually can't receive federal aid, but many colleges have their own awards for them. Our international student survival guide covers other ways to settle in.
Student Loans vs Alternative Loans
Alternative loans, also called private student loans, come from private lenders such as a bank, credit union or online lender. Interest rates and fees depend mostly on your credit history, so many students need a cosigner, and that person is fully responsible if you don't pay. According to the Consumer Financial Protection Bureau, they may have variable rates and usually lack the flexible repayment options of government loans.
Use federal student loans first, then compare private lenders only if you still have a gap. Learn the rate, fees, repayment start date and what happens if you lose your job before you sign.
Aid From Your State Government and College
Your state government and your college can be just as important as federal programs. States and colleges may offer need-based grants and merit scholarships, and most use your FAFSA to determine who qualifies. A few large examples:
- Cal Grant (California): based on need and GPA.
- TEXAS Grant: need-based help for Texas residents at public universities.
- Tuition Assistance Program, or TAP (New York): based on what your family earns.
- Bright Futures (Florida): merit-based scholarships for strong high school records.
Colleges also award their own grants and departmental scholarships. Visit your school's financial aid page, check whether it needs extra forms such as the CSS Profile, and contact the office with any questions. Staff there can help you learn how to estimate your costs and which resources fit your situation.
Other Ways to Pay for College
- Emergency aid: many colleges offer emergency grants, food pantries or short-term help for unexpected expenses like rent or food. Ask your dean of students or financial aid office.
- Employer benefits: some employers provide tuition assistance or reimbursement. Under U.S. tax law, a company can give you up to $5,250 a year tax-free for courses or student loan payments.
- Savings and payment plans: families can save in a 529 plan, and many colleges let you split the bill into monthly payments.
- Free learning: you can take a course at no cost to explore a field before paying for credits. Our guide to free online courses lists good places to start.
How to Compare Financial Aid Offers
Each college sends an aid offer after you're admitted. To compare offers, add up the gift aid, then subtract it from the total cost, including housing, transportation and personal costs. What's left is the amount you'll pay through savings, work-study or loans. A school with a higher price can still cost less if it gives more grants. If your family's situation changes, such as a job loss, contact the financial aid office and ask for a review. The answers you get could change your offer.
Once you start classes, protect your aid by keeping your grades up and planning your time. Our guide to conquering the fall semester and this list of online resources every college student should know can help. If an assignment piles up, HomeworkDoer tutors can help through our essay writing help.
Frequently Asked Questions
Do I Have to Repay Financial Aid?
You don't repay grants, scholarships or work-study earnings. You do repay loans, plus interest. A grant may have to be repaid if you withdraw early or don't meet its conditions.
When Should I Submit the FAFSA?
As soon as possible after it opens. Some state and college programs give money first come, first served, so early filers often get more.
Can I Get Financial Aid if My Parents Earn a Lot?
Yes. Families at every income level can get unsubsidized federal loans, and many colleges give merit awards regardless of need. Filing the FAFSA keeps those options open.
What Is a Good Student Aid Index?
There's no single target. A lower SAI means more need-based aid, and an SAI of zero or below usually qualifies for the maximum Pell Grant.
