Paying for College — Finding the Money
There’s no doubt that early planning and saving help when paying for college, but other resources are available so that you aren’t paying 100% of those college costs on your own. Finding them may take some time and effort, but the results are very beneficial.
Where the Money Is Found
- You and your student have the primary responsibility.
It is the federal government’s philosophy that the parent(s) and student share the responsibility of paying for college. Not everyone shares that opinion, but nevertheless, it isn’t the college’s or university’s job to completely fund your student’s postsecondary education. - The federal government can help.
When families complete the Free Application for Federal Student Aid — commonly called the FAFSA — they are essentially applying for all of the federal student aid programs. The federal aid programs consist of grants for students who demonstrate high financial need, as well as work study and loans. If you live in Iowa, you and your student can receive free individualized assistance completing the FAFSA from an advisor at ICAN by scheduling a FAFSA appointment. - Your state can help.
Almost every state education agency has at least one grant or scholarship available to residents. The Iowa legislature funds multiple grants and scholarships for Iowa students, as well as various loan repayment programs. The Bureau of Iowa College Aid administers them as the state’s financial aid agency and is well-known among Iowa high school counselors. It’s worth checking into the requirements for all of Iowa’s state programs. Completion of the FAFSA is required, and many of the Iowa aid programs also require completion of the Iowa Financial Aid Application. If questions arise, seek assistance from a college’s financial aid office or directly from the Bureau of Iowa College Aid. - Your student’s college can help.
Most schools offer some assistance in the form of grants or scholarships, but it differs greatly among them. Pay close attention to the criteria needed to receive them, such as financial need from FAFSA completion or a certain grade point average or test score. It may take some digging on the school’s website, but start with the scholarships offered through the admissions office since those are awarded upon college acceptance and are based upon your student’s high school performance. Research other departments on campus, as well as the college’s Alumni Foundation. A good starting point on the school’s website search engine is scholarships or financial aid. - Private and national organizations can help.
Many local organizations and businesses are willing to support a student’s dream of attending college by offering various scholarship opportunities. Your student’s school counselor may already have compiled a list of them. National scholarship searches exist, but make sure they are reputable and do not charge a fee to search for scholarships. Check first with your school counselor and then a college’s financial aid website.
Understanding the Bottom Line
- Exhaust all funding resources before using your own.
The first step in finding money for college is completing the FAFSA to have your student’s eligibility for federal aid considered. The federal government is the primary source of financial aid for college, and the majority of colleges will direct families to complete the FAFSA as the first step in the financial aid process. Your student will benefit from gaining federal aid eligibility. The form uses a prior-prior tax year methodology, which eliminates the need to complete your current tax return before the FAFSA can be completed. For example, to apply for financial aid for the 2025–2026 academic year of college, families will use their 2023 federal tax return when the FAFSA becomes available. Federal Student Aid has assured Congress that the 2025-2026 FAFSA will be ready December 1, 2024, which comes after a very challenging and delayed 2024-2025 FAFSA cycle. College financial aid offices are well-versed in the FAFSA and financial aid processes and can be contacted for help with questions and concerns. They understand the process is overwhelming and confusing and are willing to assist their students and parents. Once the FAFSA is complete, search scholarship databases for any grants or scholarships funded by outside organizations and entities that are not affiliated with colleges. - Understand the Student Aid Index (SAI).
Within the FAFSA are several complicated formulas that analyze all of the data placed into it, with special concentration on the income and assets of both the parent(s) and student, the number of household members, the age of the older parent, and other data elements. All of this inputed data results in the SAI, which is a formula-based index number ranging from -1500 to 999999. FAFSA results are sent to all of the schools your student listed on the FAFSA. Their financial aid offices are all working with that same number to determine the financial support you many need. The SAI is not the dollar amount of aid that will be received, what your family is expected to provide, or the final financial aid offer. - Understand what you have to pay.
Think of the FAFSA as the foundation of financial aid, then expand the net to include all other resources that may be available to your student. Once those are summed up, see how many college costs will be paid using all of those funding resources. Check the final figure and discuss with your student who is responsible for paying it and how it will be paid — with savings, work earnings, a college savings plan, loans or a combination of some or all of those. - Create your personalized formula.
The FAFSA has formulas and so can you! Refer to this month’s first article regarding the cost of college and review our notes about cost of attendance, direct and indirect costs. Create a formula to follow as your student researches different schools, as well as during the years your student attends college. We’ve included a worksheet with this article, which you are welcome to use at your discretion.
What You Can Do
- Compare different schools.
Knowing how costs and financial aid procedures differ between colleges will be an education for you and place you miles ahead of others. Get to know the lingo, and then you’re an expert when you begin visiting different colleges. - Research various savings vehicles.
It isn’t too late to start saving. Numerous options are available with a few of the most popular being 529 college savings plans, UGMA/UTMA accounts, Coverdell Education Savings Accounts and Roth IRAs. Tax benefits exist within them, and for Iowans, the ISave 529 plan (formerly College Savings Iowa) is available through the state treasurer’s office. - Don’t compare your student and your family to everyone else.
Every student planning to attend college is unique, just as their family’s financial situation is unique to them. The goal is to have a successful outcome, no matter which path is chosen or which school is attended. The reward comes with the achievement of the individual’s personalized goal.
Next Steps
Be sure to complete the survey questions at the end of this article to be entered into the 529 deposit giveaway!
Additional references, handouts and talking points are available in the right sidebar to use at your leisure. They may prove beneficial to reference now or after receiving future emails — we’ll leave it completely up to you. Use our emails like a recipe for a successful outcome — assemble the recommended ingredients and then follow accompanying directions to add flavor and depth.