How to Fund College if you are not Rich

So you want to go to college, but you have little if any money in the bank. Your parents neither earn enough nor have the savings to pay your college education.

The future doesn’t look bright…or does it?

Surprisingly, being rich can be a huge disadvantage in the student financial aid arena! Every year, students from more modest backgrounds can and do get the funds they need for college.

Unfortunately, many more do NOT get the financial aid they deserve, often because they simply do not know how. In many cases, students from lower income families are the first generation to consider college, and so they and their parents are not as savvy about the process as they could be.

The truth is, each year, the United States Education Department offers over $80 BILLION (eighty billion dollars!) in student aid, through grant, loan, and work-study programs. For most of these student aid programs, top priority is given to students who can show financial need. In fact, the fewer assets you own, the less money you have, the less income you earn, the better you will do.

The first step in the financial aid process is to complete an application form called the FAFSA (Free Application for Federal Student Aid). This form is absolutely crucial, as it is your gateway to all the grants, loans, work-study programs, and even scholarships that will pay for your college education.

The FAFSA application must be submitted as early as possible, because funds are doled out on a first-come basis. If, for example, you plan to begin college in September 2007, you should submit your FAFSA form as early as January or February of 2007.

The FAFSA form requires you to provide information about your educational goals and financial situation, as well as your parents’ financial information if applicable. From this information, a certain mathematical formula will be used to determine how much you and your parents can afford to pay towards your education, a number called your EFC (Expected Family Contribution).

Once your FAFSA is processed, you will receive a document called the SAR (Student Aid Report). Your SAR will summarize the information you have given them, and will include that very important EFC (Expected Family Contribution) number. The lower your EFC, the more financial aid you are entitled to. This amount is not necessarily the amount of money you will personally need to pay, but the lower the better.

The SAR will also let you know if you are eligible for a Pell Grant, which is based primarily on need, and never needs to be repaid. The amount a student receives through the Pell program can vary, depending on need, as well as the estimated costs of attending the college you’ve chosen. For the 2007-2008 school year, the maximum Pell Grant is $4310.

Your FAFSA information, including your SAR and EFC, will be given to the college you plan to attend. The individual school’s financial aid department will then design an aid package, consisting of a combination of grants, loans, and work-study. Ideally, the package they offer you will cover your tuition and expenses, but if there is a shortfall (as sometimes happens), the college’s financial aid office will find a way to fill that gap. Believe that it is in the college’s own best self-interest to ensure you have enough money to attend!

So if you dream of going to college, but think that only rich kids can afford it, think again. Your humble beginnings may very well lead to a brighter future.

More information on FAFSA:

You can request a guide to United States student aid programs here: