A degree is an investment in your future. But the cost of attending college can make you hesitate, especially if you have other responsibilities. 

 The good news is that there are options available to help you cover the costs of studying. Scholarships and grants cover an average of 25% of college applicants’ fees, and student loans are also available to help you bridge any funding gaps. 

Even if you are a mature student, you will usually be eligible for some financial aid. The information you need to provide changes if you are over 24, but there is no age restriction on most forms of student aid.

Understanding the financial aid process is essential to make sure you get the help you need. With the right package in place, you can feel secure in your decision to pursue further learning.

What Is Financial Aid?

Financial aid is designed to make college more accessible, by helping you cover the costs of studying. It might come from federal, state, or school funds, depending on the type of financial aid you are eligible for.

There are several different types of financial aid. Some need to be paid back, others are a gift and don’t need to be repaid.

Before we look at the different types of aid available, there are a few terms that you need to understand:

Cost of Attendance (COA): The cost of attendance is the average amount it costs to study a particular program at a specific school. It is calculated based on tuition, fees, accommodation, books and other supplies, transport, and other personal expenses. The amount varies depending on the school and other factors, like whether you live on campus or commute.

Expected Family Contribution (EFC): When you apply for student financial aid, the federal government calculates how much you or your family can afford to pay towards college. This is then deducted from the cost of attendance to work out your financial need. It determines the maximum amount you are eligible for in need-based aid. 

Financial Need: The financial aid you are eligible for is often determined based on your financial need. This figure is calculated by taking the EFC away from the cost of attendance. It determines how much need-based aid you can apply for. 

As an example, if the COA for the program you are interested in is $38,000 and your EFC is calculated at 10,000, your financial need would be $28,000 and that would be the maximum amount of financial aid you would be eligible for.

Most schools have calculators you can use to help you research the possible financial assistance you could get and how much you would end up paying for your degree. 

Dependent Versus Independent Students: The financial aid you can apply for depends on whether you are considered a dependent or independent student.  

If you are under 24 and don’t have extenuating circumstances (such as being married, a parent, in foster care, emancipated, or homeless), you are considered a dependent student. There is an expectation that your family will be helping you out with the cost of college. This will affect your financial need calculation and the amount you can borrow from federal loans.

Independent students are those who are over 24, have dependent children, have served with the military, or are otherwise not supported by their parents. You can see a fuller list of the criteria here. Independent students aren’t expected to provide information on their parents’ financial situation.

Types of Financial Aid

There are two main forms of financial aid: Needs-based and merit-based.

Needs-based aid is awarded based on your financial situation and includes grants, loans, and work-study programs. Some scholarships also use need as a factor in determining how much aid to award.

There are some other financial aid programs available for military families or to cover the cost of international study. But the main forms of student aid are as follows:

1. Scholarships

Like grants, scholarships are gifts of money, which means you won’t normally need to repay them. Many scholarships are based on both merit and need, while some are only based on merit. You’ll usually need to meet eligibility criteria, such as outstanding academic, athletic, musical, or artistic achievements.

Scholarships are offered by a wide range of institutions, including schools themselves, nonprofits, employers, religious groups, community groups, and private companies. Both undergraduate and graduate scholarships are available.

Many scholarships are aimed at a specific group of people. The amounts can vary hugely – it could be a few hundred dollars or your entire tuition. 

There are also details of external search sites that can help you find other scholarships.

2. Loans

Unlike grant or scholarship money, loans must be paid back, along with interest. Loans can come from banks or private organizations, but there are also federal student loans available that usually have lower interest rates. 

For 2021, the interest rates on federal loans are 2.75% for undergraduates and 4.30% for graduate or professional students.

There is also a 6-month grace period after you graduate or stop studying before you need to start paying back federal loans

There is an aggregate federal loan limit for graduate and professional students of $138,500, with no more than $65,500 in subsidized loans. Your loan amount cannot exceed the aggregate loan limit. This amount also includes any loans you’ve accrued while completing your undergraduate degree. More information on the aggregate loan limit can be found on the studentaid.gov website. 

Before deciding to take out a loan, consider carefully whether you will be able to repay it. Many students use loans to cover part of the cost of study and it can be an affordable way to invest in your future. But you will need to pay the money back once you finish your studies. Check the terms of the loan carefully to make sure you understand the interest rates and repayment terms.

There are both subsidized and unsubsidized student loans available from the U.S. Department of Education. 

Subsidized loans are available to undergraduates with financial need. There are no financial eligibility criteria for unsubsidized loans and undergraduate, graduate, and professional students can all apply.

Graduate and professional students, as well as parents of dependent undergraduates, can also apply for a Direct PLUS Loan to cover expenses not covered by other forms of financial aid. This type of loan requires a credit check.

If you are an undergraduate, your maximum loan will be between $5,500 and $12,500 per year, depending on your year of study and whether you are a dependent or independent student. 

If you are a graduate or professional student, you can borrow up to $20,500 in unsubsidized loans and could also apply for a Direct PLUS Loan to cover further expenses. Additionally, graduate or professional student loans are not income based, so you can qualify for aid regardless of your income

Loans that you take out that exceed the cost of tuition get sent to you as a refund. This is still borrowed money, so be sure to take out only the amount of loans you need. Building a budget will help you determine your costs and needs.


Financial aid can make a real difference in your ability to afford your education, so don’t hesitate to apply. There are a variety of options to best fit your financial needs, and no matter what your financial situation is, you are likely eligible for at least some form of aid if you need it. 


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