There is no denying it - colleges are getting more expensive with eachpassing year.  Education beyond high school, however, is still anexcellent investment.  The financial aid process can betime-consuming, confusing and frustrating, though with the right amountof research and planning, it doesn't have to be.

In this brief overview of the financial aid process we will coverthe different types of financial aid and how to apply for financial aid.

Types of Financial Aid
There are three basic types of financial aid for families:

1. Scholarships and Grants
2. Federal Student Loans
3. Alternative Loans

1) Scholarships, Grants and Work Study
Scholarships are awards from a private source that do not need to bepaid back.  They can be merit- or need-based and are an excellentsource of financial aid for college.  The Career and CollegeResource Center at HPSH is a great place to start looking forscholarships - Ms. Levine is an excellent resource!  There arealso resources on the web like www.fastweb.com

Grants are federal, state or institutional sources of student aid thatdo not have to be paid back.  There are many different types ofgrants, including:

• Federal Pell Grant: need-based grant from $400-$4,050
• Academic Competitiveness Grant (ACG): for students who havecompleted rigorous secondary curriculum, meet GPA requirements, thefreshman/sophomore award ranges from $750-$1,300
• National SMART (Science And Mathematics Access to RetainTalent) Grants: enrolled in a science or math degree program, juniorand senior grant awards up to $4,000
• Federal Supplementary Educational Opportunity Grant (SEOG):limited funding, priority given to students with exceptional need,awards range from $100-$4,000
• Minnesota State Grant: for MN residents enrolled at an eligible MN school, awards range from $100-$8,000
• Institutional Grants: grants given by colleges and universities to students with financial need

The Federal Work Study Program is money students can earn whileattending school by working on campus or for a non-profit.  Moneydoes not have to go directly to tuition, but can be used for living andschool expenses.

2) Federal Student Loans
Families may be eligible for Federal Student Loans which must be paidback.  Loans include: Federal Perkins loans, Federal Staffordloans and Parent Loans for Undergraduate Students (PLUS) loans.

Loans may be subsidized or unsubsidized.  With a subsidized loanthe government pays the interest while the student is in college. Students/families are required to pay the itnerest with an unsubsidizedloan.

3) Alternative Loans
Unfortunately, the above programs may not cover all of the cost ofcollege.  Alternative loans are from banks and other privatelenders that students and families use to cover remaining costs. These loans generally have higher interest rates and are less flexiblethan the federal loans.

How to Apply for Financial Aid
It all starts with the Free Application for Federal Student Aid (FAFSA), which can be completed online at www.fafsa.ed.gov beginning in January of the student's senior year.

Before you log on to complete your FAFSA, you will need to gather together the following materials:

• Social Security Numbers
• Driver's License
• W-2 forms and other records of money earned in the previous year
• Student's Federal Income Tax Return for the previous year
• Parents' Federal Tax Return for the previous year
• Records of untaxed income: Social Security benefits, TemporaryAssistance to Needy Families, Welfare, and/or Veteran Benefits Records
• Current bank statements
• Current business and investment and mortgage information;business and farm records; and stock, bond and other investment records
• Alien registration or permanent residence card (if you are not a US citizen)

To complete the FAFSA online, follow these steps:

• If the student worked in the past year, the student's W-2(s) and income tax forms (1040, 1040A or 1040EZ) are needed.
• If the student lives with both natural parents, and they arecurrently married, W-2 forms and income tax records for both parentsare needed.
• If the student lives with one natural parent who is notcurrently married, the W-2(s) and tax returns from the parent thestudents lives with for most of the year are needed.  If divorcedparents share equal custody, then use the W-2(s) and tax returns fromteh parent who provides more money to the student for support.
• If the student lives with one natural parent and one step-parent, W-2(s) and tax returns from both will be needed.

1. Request a PIN for the student and parents at www.pin.ed.gov
2. Figure out exactly whose tax forms will be needed to complete the FAFSA:
3. Complete the FAFSA at www.fafsa.ed.gov
4. List all the schools to which you are applying on the FAFSA, so those schools can access your FAFSA.

Your FAFSA will determine your Expected Family Contribution (EFC) - the amount the government believes the student and family can afford to pay for college each year. 

Based of the EFC and the college's Cost of Attendance (COA), the school determines your financial need.  It is basic math - let's look at an example:
    COA College X    $20,000
    Your EFC            -$5,000
                             =$15,000 (Your financial need)

College X will then put together a financial aid award package thatlists a variety of options to help you meet your financial need whichmay include federal grants/loans, work study, and institutional grantsor aid.