Are Financial Aid and Scholarships the Same Thing?

When conversations about paying for college initially take place, terms like “scholarships” and “financial aid” are oftentimes used interchangeably. Generally speaking, they are both methods used to pay for school. However, they are very different. Scholarships are distributed to or won by students, and the money that is given never has to be paid back. Financial aid is a different matter. Some of the money is free for students to use to pay for college, while student loans, which are oftentimes lumped in with the financial aid package that colleges distribute, must be paid back after graduation. Still have more questions about scholarships and financial aid? That’s perfectly fine! Below, we dissect even more differences between the two as well as prepare you for the next steps toward paying for college with scholarships and financial aid.

Scholarships

How do I apply for scholarships?

There are a variety of ways to apply for scholarships. First, colleges typically award merit scholarships along with an admissions decision. Admissions committees assess a student on the whole, taking into account their grades as well as their school and community involvement, to determine a merit scholarship amount to award at the time that they are notified of their acceptance. In addition to institutional scholarships, students can search for scholarships by their location, intended major, extracurricular activities, and more. The best place to search for these types of scholarships is Fastweb. Needless to say, there are millions of scholarships out there, and we help students take the “search” out of their scholarship search by matching them to relevant opportunities based on their qualifications. Finally, students can ask their high school counselor, teachers, or mentors about scholarship opportunities that are local to them. Though Fastweb does feature scholarships by location, there may be an opportunity closer to home that we don’t know about quite yet.

How do I qualify for scholarships?

Some scholarships have very rigid qualifications, like a perfect GPA. Other awards have no specifications at all! Each scholarship is different, so it’s important to read the fine print. Don’t apply for every scholarship you come across; it may be a complete waste of time if you don’t meet the requirements. On the other hand, apply for every scholarship that you come across that you do qualify for! Like we always say here at Fastweb, the more scholarships you apply to, the greater your chances of winning one. You can ensure that you qualify for many scholarships by working hard in your classes, increasing or maintaining a great GPA, and getting involved in a variety of extracurricular activities and community projects. Scholarship committees want to reward students who are hard-working, motivated, and interesting.

When should I apply for scholarships?

You can start applying for scholarships as early as your freshmen year of high school – and keep applying through your last year of school, whether that’s your senior year of college or your last year of graduate school. There is no hard start or end date on either side. Check Fastweb frequently for new scholarship matches; we’re constantly updating our database. Also, it’s important that you update your profile frequently as well. The more we know about you, the better we’re able to match you to relevant scholarship opportunities.

Financial Aid

How do I apply for financial aid?

Applying for financial aid is a bit simpler in that you just need a few forms in order to do so. The first, and most important, is the Free Application for Federal Student Aid, otherwise known as the FAFSA. Generally speaking, the FAFSA asks questions about your family’s financial circumstances in order to determine how much your family can contribute toward a college education. Your answers are plugged into a formula that determines your EFC, or Expected Family Contribution. Colleges are notified of your EFC; and from there, they design a financial aid package that hopefully meets your needs. Your financial aid package will be sent sometime in the spring, and you’ll be able to compare offers from all universities to which you applied. Some states and colleges may require a supplemental form in addition to the FAFSA. These supplemental forms tend to ask more questions than the FAFSA and give room for families to elaborate on financial circumstances that aren’t so black and white. The FAFSA is undoubtedly important, but so are these forms. Don’t neglect filling them out; it could lead to less financial aid dollars.

What types of financial aid are available?

There are a variety of types of financial aid. First, students may qualify for grants, which are free money that can be used to pay for college. Sound familiar? Unlike scholarships, though, this type of financial aid is distributed on the basis of financial need and not on merit. Grants can come from the federal and state governments as well as colleges. Work study is another form of financial aid that enables students to work a part-time job where earnings cover college-related expenses. Typically, the job market is limited to campus, but the Department of Education is overhauling this program to include jobs off-campus as well as apprenticeships, internships, and clinical rotations. Finally, student loans are considered financial aid, though that is debatable given that these forms of aid must be paid back after graduation. Nonetheless, if you do have a gap between what you can afford to pay for college and what college costs, student loans are a low-interest rate financing option. If federal student loans are not enough to pay for college, students can borrow with private student loans.

When should I apply for financial aid?

Each year, the FAFSA becomes available on October 1. This is typically the kickstart to the financial aid application process. It is recommended that students complete the FAFSA as soon as possible after the release date. This is because most states award financial aid on a first-come, first-serve basis; meaning the sooner you apply, the greater your chances of getting the financial aid you need to pay for college. Though the FAFSA has a 20-month application cycle, which means the due date isn’t until June 30 the following year, it’s to your benefit to at least turn in the application before your state’s FAFSA deadline. Again, many states encourage you to send in the application as soon as possible, while others won’t have deadlines until early spring. Supplemental forms from states and colleges are also due as soon as possible – or in early spring. You will have to check with your financial aid administrator on the exact timing. Though there are some pretty big differences between financial aid and scholarships, they both have the same use: to help you pay for college. You should pursue both avenues in order to pay your tuition and graduate college with minimal student loan debt.