Financial Aid for Students 101

Preparing for college and navigating the financial aid process can be challenging for even the most academically minded high school student. With the cost of higher education continuing to rise, understanding your options early can uncover opportunities you didn’t know existed and make the path to college more affordable.

What is Financial Aid?

Financial aid is money that helps students pay for college expenses, including tuition, housing, books, and more. It helps make higher education more accessible, whether you’re attending a public university, private college, or community school. Most students don’t pay full price—aid helps bridge the gap between what college costs and what a family can afford.

In the sections below, we’ll walk through everything to help make sense of the process and find the best ways to pay for college.

Do Standardized Test Scores Matter in Financial Aid?

Most college-bound students take the SAT (Scholastic Assessment Test) or ACT (American College Testing) in the spring of their junior year of high school. These standardized tests are often used for college admissions, but they differ in content, structure, and scoring. Many schools have adopted test-optional admissions, meaning students can choose whether or not to submit scores. Others have gone test-blind, where scores are not considered at all. However, some institutions still require them or may use test scores to award merit scholarships—even if they’re not used for admission.

In Wisconsin and Minnesota, the ACT is the most common college entrance exam. The SAT is less common but can be helpful if you’re applying to schools outside the Midwest or to programs that prefer it.

Learn more about the differences between the SAT and ACT.

Strong ACT or SAT results matter most for merit-based financial aid—many colleges automatically consider applicants for scholarships based on test scores and GPA, and some offer guaranteed awards for certain score thresholds. For need-based aid like federal or state grants, standardized test scores have little direct impact, but a strong academic profile can sometimes lead to a better overall package.

Tip: Check each college’s testing policy carefully, especially if you’re aiming for scholarship opportunities where scores may still play a role.

What are the Latest FASFA Updates?

Each year, millions of students file the Free Application for Federal Student Aid (FAFSA) to apply for federal grants, work-study, and low-interest loans. While the application is straightforward, taking time to prepare before you start can make the process even smoother. Gather key financial information for yourself and your family ahead of time—having these documents ready can save both time and frustration.

What’s new with the FAFSA?

• Student Aid Index (SAI) has replaced the Expected Family Contribution (EFC) as the formula used to calculate how much aid a student may qualify for.
• Fewer questions and enhanced IRS integration mean a shorter, more streamlined application for most families.

Types of aid available through FAFSA include:

• Federal Pell Grants: Need-based grants awarded to undergraduate students who have not yet earned a bachelor’s degree. Students with the greatest financial need can use these funds to cover tuition, fees, and other college costs—and they never have to repay them.
• Federal Work-Study opportunities: A program that provides part-time jobs for students with financial need, allowing them to earn money to help pay for educational expenses. Jobs are often on campus or with approved community organizations, and the wages go directly to the student.
• Direct Subsidized and Unsubsidized Loans: With federal student loans, you borrow money and repay it with interest. For need-based subsidized loans, the government covers the interest while you’re enrolled at least half-time. Unsubsidized loans are available to most students regardless of need, but interest starts accruing as soon as the loan is disbursed.

Types of Financial Aid at a Glance

Don’t Forget About “Gift Aid”

Grants and scholarships are often called “gift aid” because they are free money – financial aid that doesn’t have to be repaid. Students can learn about grants and scholarships in several ways and these funds can significantly reduce the overall cost of college, and they’re available from a variety of sources:

• Federal (e.g., Pell Grants and the Federal Supplemental Educational Opportunity Grant)
• State (awarded based on residency and need)
• Institutional (offered directly by colleges based on merit or financial need)
• Private (through nonprofits, employers, or community foundations)

To find the right opportunities:

• Start with your college’s financial aid office.
• Use trusted scholarship search engines like Fastweb, Scholarships.com, and College Board’s BigFuture.
• Explore local and community-based scholarships offered by school districts, civic groups, religious organizations, and even parent employers.
• Check out scholarships offered by Forward Bank as part of your local search.

With research, persistence, and a focus on reputable sources, students can uncover a wide range of gift aid options to help fund their education—without taking on debt.

Beware of Scholarship Scams

A good rule of thumb: legitimate scholarships never charge an application fee or ask for personal banking details.

Evaluating and Appealing Financial Aid Offers

Financial aid packages vary, and the total dollar amount on your award letter often differs from what you’ll actually pay. It’s important to read each offer carefully and focus on the details that impact your out-of-pocket costs.

First, look beyond the total aid number and examine how the package is structured. Grants and scholarships are forms of gift aid—money you don’t need to repay—while work-study offers allow you to earn money through campus jobs. Loans, on the other hand, must be repaid with interest, and some colleges rely more heavily on loans than others to fill the gap.

To compare offers, calculate the net cost by subtracting gift aid from the school’s total cost of attendance (which includes tuition, housing, books, and other expenses). Two schools might offer the same amount of aid, but you could pay more out of pocket at one if more of its aid comes from loans.

What if your financial situation changes?

Life happens—and colleges understand that. If your family experiences a significant change in income or financial circumstances after submitting the FAFSA, you can file an appeal, also known as a Special Circumstances Review.

Common reasons to appeal include:

• Job loss or reduced income
• Medical expenses not covered by insurance
• Divorce, separation, or death of a parent

Contact the college’s financial aid office directly to request an appeal. They’ll often ask for supporting documents and may require a written explanation or a specific appeal form.

Next Steps for Navigating Financial Aid

Navigating financial aid might seem overwhelming at first, but with the right tools and a little planning, it becomes much more manageable. Start early, stay organized, and don’t be afraid to ask questions. Pairing your financial aid strategy with a solid plan for building a college budget can help you make the most of every dollar. The support is out there, and it can make a big difference in turning your college goals into reality.