How Much Financial Aid Does the Average Student Receive?

The percentages are high -the numbers of undergraduates who are on some type of financial aid. In fact, about 70% of students in undergraduate programs receive it in some form. This aid comes from four sources:

• Federal – Based upon financial need
• State – Based upon financial need
• Institutional – Aid from the school itself, usually private institutions, and based upon need
• Scholarships – Based upon academic record and other criteria

Obviously, the aid package for each student will vary. And the types of financial aid above do not include student loans, either government or private.

Factors Affecting Financial Aid Amounts

The two factors that impact aid are the cost of tuition and fees of individual schools, and the level of financial need that a student (and his/her family) have. We can try to find averages, but this is tough to do.

1. Tuition and Fees Costs

The higher the cost of the school, the larger amount of financial aid award, both from governments and from the school itself. A student who attends Harvard and who can demonstrate great financial need, for example, will receive far more in aid than a student attending a community college with the same level of financial need. This type of aid is determined by family financial information provided on the FAFSA form.

The average tuition at state institutions in 2016 was $20,090 per year. The average aid package brought that tuition down to $14,210.

At some of the more prestigious schools, students might find it rather astounding that tuitions costs can be brought down to an average of about $20,000, due to both the larger amounts of government financial aid and to those institutions’ aid packages. In many cases, in-house aid is “need-blind,” meaning that students and their families do not need to demonstrate financial need to qualify for those in-house aid programs.

2. Demonstration of Financial Need

This is what the FAFSA form is all about. Parents must compete this form that details all family income, along with a lot of other detailed information, such as how many family members live in the household, tax returns, etc. Unfortunately, FAFSA does not take into account a lot of the debt that a household may have. Thus, a family that has large medical debt or that is caring for an elderly relative has no way of showing that on the application form.

Even with demonstration of need, the amount of aid is also based upon the tuition and fees of the college to which a student is applying, and the actual aid is disbursed by that school.

There is a method of appeal if a student/family believes they have circumstances that should be considered, and it is up to the school to determine if more aid should be given. Students and their parents do not often realize that there is an appeals process, but it can be important to research how that is accomplished if the aid amount is not enough.

Now…Those Student Loans

Lots of people categorize student loans as a part of “financial aid.” The caveat, however, is that they must be paid back, and there is no getting out of it except under special circumstances. Even a future bankruptcy does not relieve a former student of the repayment obligation.

Students are cautioned about loans, because they can impact many years of adult life. In fact, the average student loan debt upon graduation with a Bachelor’s degree is now a whopping $37,172. This debt impacts the ability to make major purchases, such as a car and a home, and the entire economy is going to feel the weight of the cumulative debt of student loans.

There are some things that students can do to offset loan debt:

1. Work Part-Time While in School: This is a common option. The more income a student can acquire from work, the less s/he will need to borrow.
2. Begin Payments While Still in School: If they have part-time jobs, students can begin to make payments before they even graduate.
3. Forgiveness Programs: Students who enter certain fields of employment can earn reductions in student loan debt, for every year they continue in certain “critical” employment fields. Students should check these out – a few years in an important service field can trim lots of debt.

The Bottom Line

There is no way to know in advance exactly how much financial aid do independent students get and how much in loans you will need in order to make that dream of a degree become reality. What you should know is this: there is aid out there; there are student loans to be had. Your job is to find the school that is right for you and your career goals and then to aggressively pursue every option for aid. You want to graduate with as little debt as possible, so that your post-schooling lifestyle is more to your liking.