Financial Aid Mistakes to Avoid

Mistake Number 4: Submitting an Incomplete or Inaccurate FAFSA

The road to financial aid begins with the FAFSA (Free Application for Federal Student Aid). This document determines the types of financial aid you will qualify for at any particular school. It's also used to determine the amount you or your family will be expected to contribute toward your education.

Every student should submit a FAFSA. While many forms of financial aid must be paid back, many others don’t! So even if you don’t want a student loan, it’s a great idea to complete the FAFSA and see what aid is available.

When you complete your FAFSA, the financial aid office at your school will determine what forms of aid (and how much) you’re eligible to receive. This ‘award package’ may include scholarships, grants, federal work-study, and student loans.

Take your time and complete the FAFSA properly. According to the Department of Education, most FAFSA forms they receive are incomplete or have been filled out incorrectly! Don't make this mistake.

Fill-out and submit your FAFSA online at There, you'll find helpful online tools that can speed and ease the process. Filing an incomplete or invalid FAFSA will drastically delay the financial aid process.

Mistake Number 3: Procrastination

Finding financial resources for your education will take time. Even filling out the FAFSA can be a bit challenging. So don't wait until the last minute. Fill out your FAFSA and get your scholarship applications in on time.

Remember: Your FAFSA is due AFTER January 1st. Get it in as soon as possible AFTER that date! If you’re late, don’t panic. Most students have until June 30th to submit their FAFSA.

But be aware, some financial aid programs are awarded on a first-come, first served basis. So you have nothing to gain by waiting.

Mistake Number 2: Falling for Scholarship and FAFSA Scams

Do not pay for scholarship information. Scholarships are considered "free money" (meaning that, unlike loans, they don't have to be repaid). So apply for as many as you can.

But if a company or web site tells you that you can pay for school with scholarships alone, they're probably trying to sell you something.

Chances are good that any private scholarship(s) you receive will cover only a portion of your education costs. Also, the scholarship(s) you receive will be counted as a source of income and will be subtracted from other financial aid awards you may have otherwise received from your school.

Bottom line: Save your money and do your own research.

In addition, do not pay to have your FAFSA completed. The FAFSA is in-depth and it takes time to complete it accurately, but you can do it!  Again, make use of the online form and resources provided by the government at

Mistake Number 1: Assuming That Financial Aid Is for Someone Else

Even if you're grades aren't perfect, you're not an athlete, and you're not a member of the debate club… there are scholarships out there for students like you!

And remember: Even if your family can afford to pay for your tuition, it’s likely that you and your family have access to low-interest government loans. These loans definitely beat credit cards and are sometimes a better deal than taking money out of savings or other investments.

Government loans are a sensible way to cover education expenses, so don't discount them as a viable option.

More About Financial Aid
The following is a summary of the major federal financial aid programs that are available from the federal government. Remember that the first step you need to take toward receiving financial aid is to complete your FAFSA (Free Application for Federal Student Aid).

The FAFSA will be used to determine your eligibility for most of the programs listed below and should be submitted as soon as possible after January 1. Your FAFSA can be completed online at If you are a dependent student, you will need your parent's income information to complete the FAFSA, so plan ahead.

To learn more about these specific aid programs, contact the financial aid offices at the schools you wish to attend. Be aware that different schools have separate financial aid deadlines and that these deadlines often do not perfectly align with admission and tuition deadlines.

Federal Pell Grant
Pell Grants are the foundation of most financial aid award packages. Unlike students loans, grants do not have to be repaid and are made available based on your level of financial need. Amounts available can vary each year depending on government funding for this program.

  • Designed for undergraduate students
  • Annual award limits vary
  • Both full-time and part-time students are eligible
  • Grant funds do not have to be repaid

Federal Supplemental Educational Opportunity Grant (FSEOG)
The FSEOG is a grant designed for undergraduates who demonstrate significant financial need. Students who also have Pell Grants are given priority. These grants are made available on a first-come, first-served basis, so it’s possible that not all eligible students will receive this grant. Check with your school’s financial aid office and do your best to meet their deadlines.

  • Designed for undergraduate students
  • From $100 to $4,000 available annually
  • Grant funds do not have to be repaid

Federal Work-Study
This program allows undergraduate and graduate students to work and earn money toward their education expenses. If you’re eligible to participate in this program, you’ll earn at least minimum wage and sometimes more depending on the type of work. The program encourages community service or employment that is related to your area of study.

  • Earn money while attending school
  • Work on campus or off campus
  • Work hours determined by your financial aid office

Federal Perkins Loan
The Perkins Loan offers a low, fixed interest rate of 5% and is available to both undergraduate and graduate students. The government funds this loan and participating schools act as the lender.

  • Undergraduates may borrow up to $5,500 annually ($27,500 maximum)
  • Graduate students may borrow up to $8,000 annually ($60,000 maximum)
  • Make no payments until 9 months after you graduate or drop below half-time enrollment
  • Up to 10 years to repay
  • Repayment may be postponed with a deferment
  • Loan funds must be repaid

Federal Stafford Loan - More Loan Details
The Federal Stafford Loan is widely available and is a cost-effective way to cover your education costs. There are two versions of this loan: Subsidized and Unsubsidized. The subsidized version of the Stafford Loan accrues no interest prior to repayment and is awarded based on your level of financial need. The unsubsidized version accrues interest prior to repayment and is available regardless of your level of need and dependency status.

  • Available to undergraduate and graduate students
  • Undergraduates may borrow from $3,500 up to $5,500 for their first year
  • Graduate Students may borrow up to $20,500 annually
  • Make no payments until 6 months after you graduate or drop below half-time enrollment
  • Low fixed interest rate
  • Up to 10 years to repay (extended repayment available)
  • Repayment may be postponed with a deferment
  • Loan funds must be repaid

Federal PLUS Loan - More Loan Details
The PLUS Loan (Parent Loan for Undergraduate Students) is a loan designed to help parents pay for their dependent child’s education. With this loan, parents can cover all of the costs related to your education including tuition, housing, food, transportation, books and all related expenses. Parents will need to pass a credit check to qualify.

  • Available to parents of dependent undergraduate students
  • Parents may borrow up to the total cost of attendance less other aid received
  • Low fixed interest rate
  • Repayment usually begins 60 days after full disbursement
  • Loan funds must be repaid

Private Student Loans

Private student loans can be a good option for borrowers with current income and excellent credit history, or borrowers who have a cosigner who can meet these requirements. Private student loans are typically offered by banks or other private lenders. These loans can typically cover all remaining education-related expenses and may offer a better interest rate than federal Direct Loans in some cases. 

  • Available to undergraduate and graduate students
  • Students usually can borrow up to the total cost of attendance less other aid received
  • Competitive fixed and variable intereset rates based on your good credit
  • Repayment usually begins 6 months after leaving school
  • Loan funds must be repaid