Your Guide to College Financial Resources: FAFSA, Scholarships, Grants, and Student Loans
By: Milka Yohannes
Paying for college doesn't have to feel impossible. The truth is, there's a lot of money out there to help - you just need to know where to look. Whether you're a high school senior about to apply for aid or a current college student trying to make ends meet, this guide breaks down the key financial resources available to you: FAFSA, scholarships, grants, and student loans.
FAFSA
The Free Application for Federal Student Aid (FAFSA) is your gateway to almost every type of financial help - federal grants, work-study, loans, and even scholarships. Completing the FAFSA each year informs colleges and the federal government how much aid you qualify for based on your family's financial situation.
You'll need:
Your FSA ID (a personal login for both you and your parent/guardian)
Social Security or Alien Registration Number
2024 tax information (for the 2026-2027 FAFSA)
Current account balances
A list of up to 20 colleges you want your info sent to
The FAFSA for the 2026-2027 academic year is now open at studentaid.gov. It is important to keep in mind that submitting it early can mean more aid, since some programs run on a first-come, first-served basis.
After submission, you'll get a FAFSA Submission Summary showing your Student Aid Index (SAI) - the number schools use to determine how much aid you may receive. It also provides an estimated aid amount, but here's where many students get confused: that estimate is not a guarantee. Each college builds its own financial aid package based on your FAFSA data and their available funds. Even if FAFSA shows you might qualify for maximum aid, your actual offer could be lower depending on the school's policies, costs, and budget.
Scholarships
Scholarships are one of the best ways to fund your education because you don't have to pay them back. They're awarded for things like academic achievement, leadership, athletic talent, community service, or even unique personal backgrounds.
There are four main types:
Merit-based: Given for academic or extracurricular excellence
Need-based: Determined by your family's financial situation (often using FAFSA info)
Institutional: Offered directly by your college
Private: Sponsored by companies, nonprofits, or community groups
Apply for as many as possible - smaller awards add up fast. Sites like Fastweb, Scholarships.com, and College Board's BigFuture are good places to start. Do not be afraid to ask your school's financial or counseling office for local scholarships, as they tend to be easier to win.
Grants
Grants are another form of free money, but they're based primarily on financial need rather than merit, such as grades or achievements.
The biggest grant programs in the U.S. include:
Federal Pell Grant: For undergraduates with significant financial need
Federal Supplemental Educational Opportunity Grant (FSEOG): For students with exceptional need (funds are limited, so apply early)
State Grants: Many states have their own grant programs for residents who attend in-state colleges.
Your FAFSA determines your eligibility for all federal and many state grants automatically - no separate application needed.
Student Loans
When scholarships and grants don't cover everything, student loans can help fill the gap. Unlike free aid, loans must be repaid, usually after you graduate.
There are two main categories:
Federal Loans: Offered through the U.S. Department of Education. They typically have lower interest rates, flexible repayment plans, and protections like income-based repayment or deferment.
Private Loans: Offered by banks or lenders. These usually depend on your credit score and don't have the same borrower protections as federal loans. They typically have higher interest rates, which can sometimes lead to you paying more money than you have borrowed.
Whenever possible, start with federal loans before considering private ones - they're safer and more manageable long term.
Direct Subsidized vs. Unsubsidized Loans
If you're offered federal student loans, you'll likely see two types - Direct Subsidized and Direct Unsubsidized. Understanding how they differ helps you borrow smarter.
Based on financial need (you must complete the FAFSA).
The government pays your interest while you're in school and during grace periods.
Lower long-term cost since interest doesn't accrue while you're enrolled.
Not based on financial need - anyone can qualify if they file the FAFSA.
Interest begins accruing immediately, even while you're in school.
Still a better option than most private loans because of flexible repayment and forgiveness programs.
Borrow only what you need, and stay on top of interest to avoid surprises later.
Final Thoughts
Navigating college costs can feel complicated, but once you understand the tools available - FAFSA, scholarships, grants, and loans - the process gets much easier. Start early, stay organized, and apply for every opportunity you can. Every form you fill out brings you one step closer to making college affordable.