At Strategies For College, we strongly encourage parents to start planning their financial strategy for their student’s higher education before their senior year of high school. This process involves quite a bit of research and should include a careful, honest assessment of your family’s financial situation. The goal is to develop a plan for college that results in the best possible educational experience for your student without putting your family into unmanageable amounts of debt.

This is a brief guide to some of the common financial terms and concepts that you will most likely come across as you begin the college application process.



The Free Application for Federal Student Aid (FAFSA) is a form that your family must fill out every year to qualify for need-based financial aid from the United States government.

The FAFSA essentially determines how much money a family should be able to contribute annually to their student’s education bill. This figure was previously referred to as the Expected Family Contribution (EFC) but going forward, it will be called the Student Aid Index (SAI).

Usually, the FAFSA is made available to families to fill out at the beginning of October. In 2023, this date was pushed back to December because of the FAFSA Simplification Act. With this act, the federal government has overhauled several elements of the FAFSA with the goal of increasing eligibility for more students. The new FAFSA will be shorter and easier to fill out and will use a different way of indexing a family’s finances, with a formula that takes into account each student individually rather than as a household.


CSS Profile

The College Scholarship Service Profile (CSS Profile) is another form that your family may need to fill out in addition to the FAFSA depending on the schools to which your student is planning to apply. Generally, the colleges and universities that require the CSS Profile use it to determine whether you’re eligible for institutional financial aid—in other words, financial aid directly from the school itself, rather than from the government. This form is administered by the College Board and is more detailed than the FAFSA; it also costs $25 to submit to the first school, then $16 per school after that. Those fees can be waived if your family income is under $100,000 per year.


Different Types of Financial Aid: Scholarships vs. Grants vs. Loans

Some kinds of financial aid need to be paid back (loans), while others function as a “gift” that typically does not need to be repaid (scholarships and grants). Financial aid can come from many different sources, such as the federal and/or state government, the university itself, or private organizations (i.e. philanthropic groups, corporations, civic/religious organizations, etc).

Scholarships and grants, including merit awards, are financial aid provided by the school itself or another private institution. Institutional merit-based financial aid is typically a four-year scholarship that is guaranteed as long as a student keeps their GPA above a certain threshold. This is awarded based on the student’s overall profile, and not dependent on any need-based aid eligibility. At SFC, we use the List Hero software to determine the student’s competitive position within the applicant pool and indicate where they will likely receive merit-based aid.

Students can also look into their eligibility for other independent scholarships from private financial aid programs. These organizations generally have earlier deadlines, so it’s worth starting your research as soon as possible. Students should ask their high school guidance counselors about local scholarships and other independent financial aid programs.

The government provides money in the form of low-interest loans with the expectation that borrowers will eventually pay them back, typically beginning six months after the student has completed college. Students take these loans in their own name without a cosigner. Parent PLUS loans are typically at a higher interest and must be paid by the parents beginning immediately. When deciding on your student’s college list, SFC recommends schools that will not require your family to take out huge loans.


Work Study

The Federal Work-Study program is a form of financial aid that allows students to work part-time at their university. The government (and sometimes the school) contributes the funding to pay the student’s salary. This money does not automatically go toward the student’s tuition or other school-related fees; rather, it goes directly into their pocket the way a paycheck from an outside job would. A student’s eligibility for the work-study program is determined by the Student Aid Index that was established when submitting the FAFSA. Students may choose work-study employment over a regular part-time job because it can be easier to incorporate into their schedule when it comes to school breaks.


Our Bottom Line

Many families approach the college application with a mindset that revolves around “How can I afford to go to this particular college?” At SFC, we suggest that you consider a different question—“How can I identify the schools that fit our family’s budget?”

By establishing a limit on how much your family wants to spend on college, SFC counselors are able to find the colleges and universities that will fit your student’s personal preferences, academic performance, and your family’s budget. We firmly believe that there is a school for every student who wants to attend college, and paying for this school does not have to result in financial chaos.

With the right planning, your student will not only be able to find those schools but also apply to them with confidence.

For a more comprehensive explainer, consider The New York Times’ interactive “How Do I Pay For College?” feature as another good place to start, or try this “Financial Aid 101” video from Macalester College.