What is Financial Aid?

9 Feb

Raysha Duncan, Financial Aid Administrator & Purdue Alumna
www.purdue.edu/mymoney

what is financial aid - open road

So you’ve filed your FAFSA or are considering filing your FAFSA and you’re wondering…what exactly does this get me anyway? Filing your FAFSA makes you eligible for two main types of aid: gift aid and self-help aid. Some schools require that you file a CSS Profile to be eligible for their institutional scholarships. That is not required at Purdue, so I’ll just be covering what we award through the FAFSA, since that is the only application required.

Gift Aid

This refers to all scholarships and grants, or, to put it more simply, all the types of aid that you don’t have to pay back.

Grants are typically need-based aid awarded from either the federal government or your state. The most common grant is the Federal Pell Grant. This is a need-based grant awarded to students with lower Expected Family Contributions (EFC).

Scholarships can be need or merit-based and students can get them from various sources. Typically, students receive scholarships either from their university or from a private donor. There are websites such as www.scholarships.com and www.fastweb.net to help students find all kinds of private scholarships. There are some pretty obscure scholarships out there, so if you look hard enough, you may even find one that fits your eccentric hobbies. Be sure and apply for a lot of different scholarships, but never pay to apply for a scholarship. If you’re being asked to pay to apply, then it’s probably a scam.

For information on grants and scholarships available to Purdue students, please visit the Division of Financial Aid’s website.

Self-Help Aid

This type of aid consists of loans and Federal Work Study. Loans are the most common type of self-help aid; they’re also the only type of financial aid that really makes it on the news. Students are expected to pay back their student loans once they have graduated and depending on what type of loan you take, there may be interest accruing on it while you’re in school. Federal Student Loans consist of Perkins Loans and Stafford Loans. Parents may also have the option of taking out a Parent PLUS Loan to help cover any remaining costs that the student has; Parent PLUS loans are taken out in the parent’s name, so the parent is the one who is expected to pay them back. Students also have the option of taking out private student loans, which are loans they apply for through a third-party lender and are then sent to their college.

It’s important to remember that ALL LOANS HAVE TO BE PAID BACK, so always try to borrow as little as possible so you aren’t burdened with huge loan payments once you graduate college.

 

Purdue students will want to file their FAFSA by March 1st to meet Purdue’s priority filing deadline. Incoming freshmen to Purdue who filed their FAFSA by this date or “on-time” can expect to receive their financial aid award mid-March and continuing students at Purdue who filed “on-time” can expect to receive their financial aid award mid-June. Feeling anxious? You can also check out the CollegeBoard Net Price Calculator to get an estimate of the aid you might be eligible for at Purdue.

The Purdue University Division of Financial Aid has also created a step-by-step guide on How to Apply for Financial Aid checklist on their website.

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