Financial Aid 101: The cost of college and how to pay


The total cost of college depends mostly on the type of school your student will attend. Your budget and financial aid are also a big part of that equation. 

Let’s review the five main expenses that make up college costs:

1. Tuition and fees

This is the cost of your student’s degree program and usually accounts for the biggest chunk of college expenses. 

College tuition and fees

2. Room and board

Room and board costs include housing or rent, food or meal plans, utilities, and parking expenses. Whether your student lives on or off campus, room and board is another substantial expense.

College room and board
3. Books and supplies

This is the cost of course materials such as required books for assigned readings and other college learning supplies. 

College books and supplies

4. Travel and transportation

Travel expenses can be high for students attending an out-of-state university. If your student stays closer to home or plans on living off campus and commuting to school, there are still transportation costs between home and class to consider.

5. Other expenses

Personal expenses are a part of daily living for students and can add up, especially in areas where the cost of living is higher. These costs generally include your student’s cell phone bill, streaming services such as Netflix or Hulu, and personal care items.

College expenses

Total college costs

Total cost of college

Types of financial aid

Simply put, financial aid is money that can help your student pay for college. Need- and merit-based financial aid comes from the government, colleges and universities, and other organizations. Merit-based financial aid is awarded to students with an above-average GPA or who excel in sports or any other special area. Need-based financial aid is given to students who demonstrate a need for financial assistance to help pay the full cost of college. 


A grant is money your student does not have to pay back. Common types of grants include:


Scholarships are another form of financial aid that doesn’t have to be repaid. Scholarships are often awarded for academic performance, but can be given based on need as well. 


Loans are borrowed money used to help pay for college expenses that aren’t covered by other forms of financial aid. Loans have to be repaid. Both federal and private loans are available to parents and students. There is a limit to how much federal loan money a single student may receive, but they usually have lower interest rates. Private loans offered by banks and credit unions are not funded by the government and are more likely to have higher interest rates.

Direct PLUS Loan is a federal college loan.


Students eligible for need-based financial aid can participate in Federal Work-Study. Work-study programs enable students to pay for college by working on or off campus. Students work a set number of hours per week and are able to schedule their hours around classes.

Applying for financial aid

To qualify for federal financial aid, students must complete the FAFSA (Free Application for Federal Student Aid). The FAFSA is a form that provides the federal government with the financial information of students and parents to help determine what kind of financial aid a student qualifies for. The FAFSA requires tax information to apply.

The CSS Profile is an online application for non-federal financial aid. The CollegeBoard CSS Profile collects your financial information and is submitted to selected colleges for a $25 fee. Fee waivers are available based on particular circumstances.

Other ways to pay


There are several kinds of savings accounts that can help pay for college; the most popular is the 529 Plan. An education savings plan designed to help families set aside funds early for future college costs. 


Serving in the military comes with education benefits. There are numerous programs designed to help service members and their families go to college before, during and after their service commitments. From officer training programs to the Post-9/11 GI Bill and on-base education opportunities, military service is another way to pay for college.