A beginner's guide to financial aid

Financial aid is money that helps pay for college or career school. It comes from the federal government, your state, the colleges themselves and private organizations. The forms and acronyms can feel like a lot at first, but the process follows a clear order: apply, compare what you are offered, and accept what makes sense for your family. This guide walks through the basics. Program rules and dates change, so confirm details on the official pages linked below.

What is the FAFSA, and who should file it?

The Free Application for Federal Student Aid (FAFSA) is the main form for federal aid. According to Federal Student Aid, any student who wants to be considered for federal, state and school aid should complete it, regardless of income. Many states and colleges use FAFSA information to award their own grants and scholarships too.

• It is free. The first F stands for free. You should never pay a website to file it for you. The official form is on studentaid.gov.
• You need an account. You and each parent or other contributor who adds information need your own StudentAid.gov account. Never share your login with anyone.
• You apply every year. Use the FAFSA form that matches the school year you are applying for.
• Deadlines vary. There is a federal deadline, and states and colleges set their own, often earlier. Some state and school aid is limited, so filing early helps.

Do you need the CSS Profile?

Only if a college or program you are applying to requires it. The CSS Profile, run by the College Board, is a separate application that some colleges, schools and scholarship programs use to award their own nonfederal aid. Check the CSS Profile site for the list of participating schools and programs, and check each college's financial aid page.

The CSS Profile has a fee, and fee waivers are available for eligible families. The College Board publishes the current waiver rules on its site, so check there before you start.

What is the difference between grants, scholarships, work-study and loans?

Grants and scholarships are gift aid that generally does not have to be repaid. Work-study lets you earn money for school through a part-time job. Loans are borrowed money you must repay with interest. Knowing which is which helps you understand what each school is really offering you and what it will cost later.

• Grants generally do not have to be repaid. Federal Student Aid notes exceptions, such as owing a refund if you withdraw from school. Federal grants include Pell Grants.
• Scholarships are gifts that do not need to be repaid. They come from schools, employers, nonprofits, community groups and many other organizations, and they may be based on merit, need, talent or field of study.
• Work-study lets you earn money for school through a part-time job. Your award depends on when you apply, your financial need and your school's funding.
• Loans are borrowed money that you must pay back with interest. Federal loans and private loans have different terms, so read them closely.

How does state financial aid work?

Many states run their own grant and scholarship programs, and each sets its own rules and deadlines, which are often earlier than the federal one. Your state grant agency is the best place to start. Some states use the FAFSA to decide state aid, while others require an extra form or application.

California is one example. The California Student Aid Commission considers students for a Cal Grant based on a completed FAFSA or California Dream Act Application, a verified GPA on file with the commission, financial need and the college attended. Other states have their own programs, so check yours directly.

How do you compare financial aid offers?

After you are admitted, each school sends an official aid offer. Line the offers up side by side and sort every item into gift aid (grants and scholarships), work-study or loans. Then compare the net price, your cost of attendance minus grants and scholarships, rather than the total aid figure each school shows.

The most useful number is the net price: what you would pay for a year after subtracting grants and scholarships. Before you apply, each college's net price calculator on its website can give you an early estimate. If an offer is not what you expected, contact the financial aid office. They can explain how it was determined.

What are the financial aid steps for this year?

Create StudentAid.gov accounts, find every deadline that applies to you, and submit the FAFSA for the right school year. Check whether your colleges or scholarships need the CSS Profile or a state form, run each college's net price calculator, compare offers by aid type, and report outside scholarships to each school.