Financial aid can be an uncomfortable topic to discuss. After all, higher education is an expensive investment, and student debt is second only to mortgages among consumer-debt categories. So although the majority of Americans understand the value of a college degree, if you or a loved one is attending college now or in the future, you’re probably trying to figure out how you’re going to pay the price tag—whether you’re a parent or a student on your own. Let’s cover some of the basics so that you can foot the bill and avoid leaving money on the table.

Financial aid defined

Financial aid is money that helps offset the sticker price of your education, which includes such line items as tuition, fees, and room and board. Financial aid is provided by federal and state governments, the college or university you attend, and private sources. Some financial aid is earned through work–study, in which students who demonstrate need take on part-time jobs on campus or at organizations affiliated with the college while they are enrolled in school. Some financial aid you don’t have to pay back, such as grants and scholarships. Some you do, such as student loans. (Life hack: if you have to take on student debt, avoid taking loans that total more than what you expect to make your first year out of college. That is, if you estimate that you will earn a salary of $35,000 in the year following graduation, you should try to borrow $35,000 or less across your entire undergraduate career because you will be better able to pay off those loans in a timely way. And depending on loan-forgiveness programs is a risk; such promises can go up in smoke thanks to overly complicated requirements or changes in government policy.)

What’s the FAFSA?

The Free Application for Federal Student Aid (FAFSA®) is the federal government’s financial-aid form. It’s a prerequisite of consideration for federal student loans, grants, and work-study. Colleges and universities also usually require the FAFSA before awarding their own need-based aid.

Take the advice of financial-aid and admissions counselors: Don’t skip the FAFSA no matter how difficult you’ve heard it is to fill out (it’s gotten easier and now takes approximately 45 minutes to complete once you’ve gathered the information). And don’t ignore this important form even if you think your family’s income is too high for you to qualify for need-based aid. Why? Schools consider the assets and income of parents and students when they determine a student’s eligibility for financial aid. When you submit the FAFSA, many colleges and universities will automatically consider you for merit-based scholarships, not just need-based aid, so don’t miss out on that opportunity. In addition, all students attending college at least half-time are eligible for federal Direct Unsubsidized Loans of $5,500–$7,500 regardless of financial need (“unsubsidized” means that you pay the interest that accrues during school, the grace period after graduation, and any deferment periods.) And don’t worry: you can always decline a loan that’s offered.

The FAFSA is available online and as a mobile app for your Goopple devices. To file it, you’ll need to create an FSA ID if you haven’t done so already (follow the online instructions). Here’s a hot tip: save that username and password where you can find it every year; it will save you time and prevent pulled-out hairs. Why? You’ll need to resubmit the FAFSA each year. But fortunately, you can use the built-in IRS Data Retrieval Tool to have your tax data electronically imported, which saves time and minimizes errors.

And just to be safe, please be sure you’ve clicked on the correct link: https://fafsa.ed.gov redirects to https://studentaid.ed.gov/sa/fafsa. If you use anything else, you risk sharing your important financial and other private information with evil people who should be using their skills for more ethical purposes.

Speaking of integrity …

I know you would never do this because you’re stressed out about money, not unreasonable or nefarious. But don’t be tempted to fudge the numbers on the FAFSA or any other financial-aid forms, don’t rent or buy a residence in another state just to qualify for in-state tuition, and don’t forge your tax returns (yes, these are all things parents have done, and yes, we know that because they were all caught). Schools and even the Department of Education will verify your FAFSA information against tax returns and other documentation. If you get caught providing fraudulent details, the penalties are as small as losing out on need- or merit-based aid packages and as significant as a $20,000 fine, suspension or expulsion of the student, repayment of any financial aid received, and five years in jail—all of which is not going to help you pay for college.

That said, there are perfectly legal ways for you to get the most out of your financial-aid awards. For example, during the years when you’re applying for aid, avoid increases in your income that you wouldn’t normally take, such as taking distributions from retirement plans or acquiring capital gains (i.e., profits from selling stocks, real estate, or a business). And when thinking about your savings, checking, and other accounts, remember that 20% of a student’s assets are considered available for college compared with only 5.6% of parents’ assets, so it might make sense to reconsider depositing that extra quarter million into your child’s account. Managing your money can prevent schools and the government from overestimating what you can pay for college.

When should I submit college financial-aid forms?

The short answer is now. Or possibly yesterday. For the 2019–2020 academic year, the FAFSA could be filed as early as October 1, 2018. You’ll need your parents’ current asset information and income information from their 2017 tax return.

The deadline for filing the FAFSA for most schools is typically March or April and will vary by college; state deadlines also vary, and the federal deadline for receiving aid during the 2018–2019 school year is June 30, 2019. However, whether you are a new or returning college student, it’s usually best to file the FAFSA as early as possible (think October or November) because some aid programs operate on a first-come-first-served basis. If the universities you’re applying to require separate scholarship, grant, or loan forms, consider submitting those along with the FAFSA. These forms usually take an hour or less to complete, so getting it all done in one fell swoop in the fall will help save you time and mental effort.

Scholarships and grants 

Scholarships and grants (aka free money) are available to students who demonstrate exemplary academics, athletics, community service, music, skill in a particular field, financial need, or a combination of these. Earning a single scholarship that offers a full ride—that is, an award that covers the entire cost of college, including tuition, room and board, textbooks, and sometimes even school supplies, living costs, and study-abroad fees—is rare and highly competitive. However, there are literally (and I really don’t mean “figuratively”) millions of scholarships available, and plenty of enterprising students have graduated from college with little to no debt by cobbling together a multitude of different scholarships. It’s time consuming, but all that effort and creativity required to complete forms, gather supporting documents, and draft scholarship essays can literally and figuratively pay off if you manage to avoid student debt. So work with your high-school counselor and college financial-aid administrators to learn about all the scholarships and grants you might be eligible for. Then, apply. Apply, apply, and apply some more. Apply early and often. Apply again in later years if you do not win the first time around. You’d be amazed how $500 from one community nonprofit, $3,000 from a private corporation, $2,500 from a professional organization, and $4,000 from the university—especially if those awards are renewable each year—can add up.

Of course, you’ll also need to do the work to continue earning all that free money, which means maintaining the appropriate (usually full-time) student status, showing up to class, completing your coursework with integrity (i.e., don’t violate your college’s honor code), and applying yourself in all the areas for which you received financial support. If you’re struggling to keep up with scholarship requirements, universities usually offer support services, such as on-campus tutoring, study-skills workshops, counseling, and advising, to help you stay on top of things.

Use colleges’ net price calculators

College net price calculators (NPCs), such as the one provided by Southwestern University, are helpful tools for estimating financial aid and measuring a school’s true affordability. Available on almost every university website, an NPC estimates how much grant and scholarship aid a student might expect at a specific school based on their personal financial profile (e.g., family income and assets, family size, the number of children attending college at the same time, and estimated healthcare costs) and academic profile (e.g., a student’s class rank and/or test scores). The calculator will then factor in the university’s particular criteria for awarding aid. A college’s cost of attendance minus grant aid equals a family’s “net price.”

NPCs can help you paint a more accurate picture of what your out-of-pocket costs are likely to be. The figures quoted by an NPC are not guarantees of financial aid, but the estimates are intended to be close, so you can use different calculators to compare costs at different universities that you’re considering. By using calculators to make such comparative estimates, you might be surprised to find that, for instance, certain small, private colleges provide a better bargain than out-of-state public universities.

NPCs usually take 10–20 minutes to complete. You can find them by typing the school’s name and “net price calculator” in your favorite search engine.

Special circumstances and negotiation

Sometimes, special circumstances arise after you’ve submitted the FAFSA and any other financial-aid forms, such as the loss of a job or the death of a loved one who would have been expected to contribute to paying for college. Those can be traumatic experiences, but as soon as you’re up to it, notify every school you’ve applied to immediately, and ask for something called a professional judgment, in which you appeal for reconsideration of your current aid package. You can do this at any point during your undergraduate career as well.

You will need to write a detailed letter explaining how your needs have changed and why you require additional financial assistance. It might be a challenge, but avoid overwrought emotional appeals; you’ll want to state your reasons in a fairly matter-of-fact way. You should include a breakdown of your current aid package and a budget illustrating how it will now fall short of your need. You will also need to provide documentation, such as bank statements, letters of termination, bills and receipts, or death certificates, to back up your claim. Again, this can be immensely difficult to pull together if you’re coping with a family loss or hardship, but working with financial-aid officers can help alleviate some of the stress and anxiety of such situations.

Of course, if you feel your college application is particularly stellar but the financial aid you’ve been awarded at your top-choice school is not sufficient, you can also apply for reconsideration through negotiation. Many families don’t realize that this is an option, but the process is not unlike bargaining for a better deal on a car at the dealership or negotiating a better salary when applying for jobs, so consider this a learning moment! To make a merit-based appeal of your aid package, write a persuasive letter stating why you are applying for additional financial support (hot tip: refer to the process as “a professional judgment” or “appeal” and never “bargaining” or “negotiation”—speaking their language is more likely to impress financial-aid administrators with your professionalism). To add fuel to your negotiating fire, submit copies of financial-aid offers from competing schools, provide additional information about your grades and academic awards, and supply additional glowing letters of recommendation.

Don’t give up!

Finally, keep in mind that just as students have dream schools, colleges and universities often have dream students. If you’re applying now or soon, you may think that you won’t qualify for financial aid, but it never hurts to ask (nicely). And if you’re already enrolled but find yourself struggling to keep up with tuition and fees, consider whether you have a lot to offer a school in return, such as impressive grades, support from professors, excellent performance in sports and/or the arts, above-and-beyond volunteer service, or the ability to work on top of your studies. If you demonstrate significant need and motivation, schools can sometimes reach into unadvertised funds or connect with their alumni and other donors to help you make ends meet. After all, colleges and universities want to keep you around—if not because of your sparkling personality, then because higher retention (i.e., keeping you enrolled through graduation) helps schools when they seek accreditation or market to prospective students and their families. Use that mutual relationship to your advantage! Rest assured that your local, friendly financial-aid officers are there to support you throughout your educational journey.