Wondering How to Pay for College? Here’s an Overview of Types of Aid Available.

By Published On: June 29, 2021

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

Students of any age may be eligible for 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 or state aid, 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 in need-based aid.

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: Grants and Loans.


Grants may be available from the federal and state government. Some not-for-profits and private organizations offer grants too.

If you are awarded grant money, you won’t usually need to worry about repaying it, unless you drop out of school or your eligibility criteria changes.

There are different types of grants available, each with its own criteria. For most, you will need to demonstrate financial need.

It is worth researching to see if you are eligible for other grants. Federal grants available to undergraduate students include:

Federal Pell Grants: These are usually only awarded to undergraduate students who don’t hold a previous degree-level qualification. There are occasional exceptions for some post baccalaureate teacher training programs.

Pell grants are also reserved for students who demonstrate exceptional financial need.

The maximum amount available in 2021-2022 is $6,495 for the year. The actual amount will depend on your exact circumstances, including the schools you apply to, whether you are studying full-time or part-time, and your Expected Family Contribution (EFC).

Iraq and Afghanistan Service Grant: This grant is specifically aimed at prospective undergraduate students who have a parent or guardian who died during military service in Afghanistan or Iraq after the events of 9/11.

If your EFC is too high and you aren’t eligible for a Pell Grant, you might be able to get an Iraq and Afghanistan Service Grant instead.

You’ll only be eligible if you were under 24 at the time of their death or were enrolled in college at least part-time.

The grant is equivalent to the maximum amount of the Pell Grant, but there are reductions in place because of the 2011 Budget Control Act. For awards paid out before October 1, 2021, the maximum amount is $5,983.34.

State Grants: Many states also offer grants for eligible undergraduate students who are residents in the state. In Illinois, residents with financial need can apply for the Monetary Award Program (MAP).

Undergraduate students with an EFC of less than $9,000 may be eligible for the MAP Grant, as long as they and their parents are residents of Illinois. The grant will only be awarded if you attend an in-state school.

The grant only covers up to 135 credit hours, which is usually around four and a half years of full-time study. The amount of the MAP Grant is determined annually by the state legislature at the time of the state budget approval.


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 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 – it could be a few hundred dollars or your entire tuition.


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 subsidized and unsubsidized loans are 2.75% for undergraduates and 4.30% for unsubsidized loans 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.

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.

Subsidized loans are available to undergraduates with financial need. Students with no need, as defined by the Department of Education, will be eligible for an unsubsidized loan.

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 student, 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 Graduate PLUS Loan to cover expenses up to the Cost of Attendance.

Additional information on subsidized, unsubsidized, PLUS and alternative loans can be found here: https://www.cuchicago.edu/admission-aid/undergraduate-admission-aid/loans/

FAQs on Federal Student Aid and the FAFSA

What is the FAFSA?

The FAFSA (Free Application for Federal Student Aid) is used to determine your eligibility for federal student financial aid.

When should I file the FAFSA?

Complete the FAFSA each year, as soon as possible after October 1. Students will be required to report income information from an earlier tax year. For example, on the 2021-22 FAFSA, students (and parents, as appropriate) will report their 2019 income information, rather than their 2020 income information. Financial aid packages can only be offered to students who have completed the FAFSA. Because the FAFSA takes 3-5 business days to process, be sure to file at least two weeks before the end of your enrolled class(-es); otherwise, financial aid may not be able to be processed for that term.

Concordia’s priority awarding deadline is March 1st of each year. FAFSA applications filed after this date will be processed; however some types of financial aid may no longer be available.

Note: All Adult Degree Completion students who are Illinois residents should complete their FAFSA by early December, or risk being denied Illinois MAP Grants due to state budget limitations. The Illinois Student Assistance Commission (ISAC) sets the FAFSA submission deadline for MAP grant consideration. It is generally December 1—or earlier—each year.

Where do I get the FAFSA application?

Complete the FAFSA online at studentaid.gov. To make sure that Concordia University Chicago receives a copy of your FAFSA results, make sure you list our school code: 001666. This application is FREE. If you are asked to pay a fee for processing, you have accidentally gone to the wrong website.

What types of documents are needed in order to complete the FAFSA filing process?

You will need records of untaxed income, Federal Income Tax Returns, W-2 forms, bank statements and investment records for both parents and students.

When should I expect my financial aid award letter to arrive?

Only students who have been admitted to Concordia University Chicago are eligible to receive a financial aid award. Financial awards will be offered within 7 to 10 business days after the FAFSA results are received in the Office of Financial Aid. Once the student’s financial aid file is completed, he/she will receive notification in the mail.

Why should I file the FAFSA if I do not think I will be eligible for assistance?

We encourage all students to file the FAFSA in order to determine their full eligibility for all types of financial assistance. In order to be considered for any federal, state and low-interest loans, you must file the FAFSA. If you plan to apply for private scholarships, many agencies and organizations require the FAFSA to be filed in order to be considered for their scholarships. And, in the event anything dramatically changes with your family’s finances during the academic year, you may contact the Office of Financial Aid for discuss the possibility of a professional judgment. 

Where should I look for other sources of financial aid?

Many local organizations and businesses provide grants and scholarships to help students attend college. Websites like FastWeb and the Illinois Student Assistance Commission’s website are excellent resources for additional information on scholarships.

Explore potential sources in your community, as well. Your church, employers and/or local chamber of commerce or other community groups may have information not widely publicized online.

What kind of help is available on the Internet from the Department of Education?

Additional information about Federal Student Aid and related documents are available online:

  • https://studentaid.ed.gov
  • https://collegescorecard.ed.gov

Will the government give me a tax break?

Many parents and/or students qualify for an educational tax credit. For more information on these tax credits, please visit the Internal Revenue Service (IRS) website for additional details or contact the IRS directly at 800-829-1040. You may also consider checking with a professional tax preparer.


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.


Looking for more information on financial aid? Check out our infographic, “Financial Aid FAQs.”

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