If you don’t have your head wrapped around the basic terms and facts, figuring out how to pay for college and applying for scholarships can be a little complicated. OK, a lot complicated. But don’t worry. We’ve got you covered–this section is bursting with all the financial aid info you need!
Financial Aid Glossary
Financial aid: Money given to students to help pay the costs of education (includes scholarships, student loans, grants and work studies).
FAFSA: Filling out the Free Application for Federal Student Aid (FAFSA) allows students to see which federal grants, loans and work-study aid they’re eligible for.
Grants: Money offered to students as a one-time gift—they do not have to be paid back—by the federal or state government, your college or technical school, private companies, and/or nonprofit organizations.
Pell grants: Federal money that does not have to be paid back; only awarded to undergraduate students who display exceptional financial need.
Scholarships: Money given to students per semester or school year that does not have to be paid back. Some have spending restrictions. Available through many channels.
Student loans: Money lent by a bank, college or the government that must be paid back with interest.
PLUS loans: Federal student loans that are meant for parents of dependent undergraduate students. Must be paid back with interest.
Loan forbearance: An agreed upon time when you’re allowed to stop making payments or reduce your monthly payments (up to 12 months).
Loan deferment: When a lender (or federal government mandates) allow you to temporarily stop making student loan payments. For example, since the start of the pandemic, there's been a pause on federal student loan repayment (this grace period officially ends Dec. 31, 2022).
Work study: Federal work-study programs allow undergraduate students to earn money and pay for school by working part-time (money does not need to be paid back, obviously, as you earned it!).
Eligibility: How much financial aid you're able to get; based on a calculation considering your expected cost of attendance (COA) and any expected family contributions (EFC).
Cost of attendance (COA): The expected amount it will cost you to go to college, including tuition and fees, room and board, as well as the cost of books, a personal computer, supplies, transportation, and more.
Expected family contribution (EFC): The funds your guardians can realistically contribute to your tuition (not that they are required to); calculated using a legally established formula, including your family's taxed income, untaxed income, assets, and benefits.
Steps for Filling Out the FAFSA
Filling out your Free Application for Federal Student Aid (FAFSA) can be intimidating, but this seven-step guide will help you check one more thing off your college
- Create your FSA ID. You’ll simply need to create your account username and password so that you can access your FAFSA form and sign it online. It’s an easy, 10-minute process. Your legal guardian will need to create an account too.
- Start the form! The 2022-23 FAFSA, which is for students wanting to start college between July 1, 2022, to June 30, 2023, launched on October 1; make sure to select “I am a student and want to access the FAFSA form;” then log in with your FSA ID.
- Fill out your demographic information. This section on the form is for your basic information, such as your date of birth, name and social security number. Don’t forget to fill out your legal guardian’s demographic information too.
- List the schools you are applying to (and considering). Include every school you’re thinking about applying to, it doesn’t hurt to add as many as possible. The school's officials can’t see this list, and if you decide to not apply later, they will just disregard your form.
- Fill out your dependency status. There are 10 questions you can find on studentaid.gov/apply-for-aid/filling-out/dependency to help you determine if you are an independent or dependent.
- Fill out your financial information. To make this step as simple as possible, studentaid.com recommends using the IRS Data Retrieval Tool to import your tax information.
- Sign and submit. You and your legal guardians will sign the form; once complete, you're all done!
Important Date - FAFSA DEADLINE
For academic year 2022-23: June 30, 2023
What to Have Ready
The FAFSA asks questions about you and your finances, so have the information below handy:
- Social Security number
- Cash, savings and checking account balances
- Alien registration number
- Investments other than the home in which you live
- Federal tax information or tax returns
- Records of untaxed income
Interested in an Associate Degree?
The ARFuture Grant may cover your tuition!
What it is: The ARFuture Grant is one of Arkansas’ newest financial aid programs, and it was created to boost Arkansas’ workforce by supporting non-traditional students.
What it covers: Tuition and fees for qualifying certificate and associate degree programs at Arkansas public institutions.
Who can get it: Available to students enrolled in STEM or regional high-demand areas of study. Must be a graduate from an Arkansas high school, home school, GED program, or anyone who has a high school diploma and has lived in Arkansas for the last three years (and has not yet earned an associate degree). Complete the FAFSA by the deadlines below.
What are the high-demand areas of study? Find a list at sams.adhe.edu
Student Loan Perks & Pitfalls
Taking out a student loan is a big step, and people rarely talk about it until it’s too late. Here’s the truth about student loans (the good and the bad) to help you make an informed decision.
- You’ll be able to go to college.
- They’re easy to get (no credit check).
- There are specialty loans for specific schools and degree programs in Arkansas.*
- They help you build credit.
- You can focus on school; you won’t have to work at the same time.
- You can use loan money for tuition, books, school supplies, room and board, laptops, etc.
- You have a long time to pay them off.
- In special cases (like for Arkansas teachers), student loans can be forgiven.
- Sometimes payments can be deferred; you can apply to take a break from monthly payments.
- You start your adult life with debt.
- If you don’t graduate, you still have to pay them back.
- Compounding interest makes these loans very expensive in the long run.
- You have to choose a degree carefully to ensure you’ll earn enough to pay them back.
- You’ll have to wait to enjoy some luxuries in life while paying them back.
- If you don’t make payments on time or you default on the loan, you’ll ruin your credit score.
- Even if loan payments are deferred, the compounding interest continues to accrue monthly.
*Visit the Arkansas Student Loan Authority website to learn more about local speciality loans (asla.info)
Student Loan Debt in:
► $11.7 billion - Total outstanding student loan debt in Arkansas
► $31,118 - Average student loan debt owed by Arkansans
► $227 - Average total monthly student loan payment in Arkansas
► Arkansas is one of the top 10 worst states for student loan delinquencies. Nine percent of all student loans are in default.
► $1.7 trillion - Total student loan debt in the U.S.
► $37,358 - Average federal student loan debt in 2022
► 1 in 5 - Americans are still paying back their student loans
► 22 million - Estimate number of Americans who owe at least $20,000
► $393 - Average student loan monthly payment, according to research from the Federal Reserve Bank of New York
► 11% - Of new graduates default on their loans in the first 12 months of repayment—eek!