Financial Aid is a critical source of funds for students to afford college and powers the campus. Without financial aid, many students would find the gap between rising higher education costs and their budget too great, reducing their participation or enrollment.

College campuses, with the mission to support lifelong learning, leadership, service and responsible citizenship would find their resources dramatically diminished with fewer students with less aid.

Finally, campus commercial enterprises or auxiliary services, like the Campus stores & dining, restaurants, suppliers and service-providers, rely on students.  If students can’t meet their basic financial requirements like tuition and housing, it leaves little or no extra money for more discretionary spending at their businesses.

Who Gets Financial Aid and How?

A large majority of College students receive significant financial aid.  According to the National Center for Education Statistics (NCES), in 2016, 85% of students were receiving financial aid in one form or another.  In 2016-17, The College Board reports that undergraduate students received an average of $14,400 in aid per full-time equivalent (FTE) student, including $8,440 in grants from all sources, $4,620 in federal loans, and $1,340 in a combination of tax credits and deductions and Federal Work-Study (FWS).

Financial Aid Programs

Often, the money a student gets comes from a variety of organizations and programs, not one unified source. Here are a few examples:

Overhead view of a young man using a laptop.

1) Federal government loaning organizations include:

  1. Perkins Loan Program – a need-based funding organization
  2. Pell Grants – a subsidized program
  3. Federal Work Study (FWS) program –  funding for part-time employment

2) For-profit student loan organizations:

Navient (a division of Sallie Mae) , for example, provides loans to almost 12 million students across the US.  Loans come with different terms and different requirements and cover many costs that Federal programs and scholarships don’t meet.

3) Scholarships:

Scholarships are gifts. They don’t need to be repaid. There are thousands of types offered by schools, employers, individuals, private companies, nonprofits, communities, religious groups, and professional and social organizations. Some are merit-based.  Others are based on groups of affiliations. Some are available based on where the student, or their parents, work. Work and military programs also supply aid.

4) State Grants and Tuition Waivers

States offer merit-and need based programs.  Some states will waive tuition and enrollment fees as well as provide other assistance.  For example, the California Community Colleges Promise Grant permits enrollment fees to be waived. (Assistance for the purchase of books and supplies must be applied for separately)


College Board points out that financial aid makes up the difference between the cost of college and what a family can pay.  To determine a student’s eligibility, it’s best to start with the Free Application for Federal Student Aid (FAFSA) process.  FAFSA offers more than 13 million students with almost $150 billion in aid. Interestingly, even students who can afford to pay for their college tuition are encouraged to fill out the FAFSA application to discover if they qualify for some particular form of assistance from the US government.

Other resources include:

How Financial Aid Can be Used

People studying at tables in a library

The Federal Student Aid Handbook for college financial aid administrators explains how schools are mandated to calculate costs related to attending college or Cost of Attendance (COA) in a student’s budget. Allowable expenses are:

  • Tuition and fees
  • Room and board fees
  • Course Materials and Supplies
  • Transportation and miscellaneous personal expenses
  • Allowance for the costs of dependent care
  • Funding for first professional license or certificate
  • Study abroad programs approved by the college
  • Expenses related to a student’s disability
  • Loan fees for a Direct Loan and more

Keeping track of what spending is allowable and what spending is not is crucial.  Campus administrators are responsible for distributing the funds to certain schedules and for certain uses.  They maintain rigorous policies and procedures, typically within a campus Student Information System (SIS) and must report considerable details to the Financial Aid source.

Certain aid amounts are automatically applied to certain fees, like tuition and room and board. Other costs are typically paid out of the remaining balance only when it’s distributed to the student. However, some services like FA~Link allow students to access their funds early to buy course materials and other key services before classes start and in early weeks, often before any remaining balance is distributed to them.

How Financial Aid is the Fuel of a College Campus

US colleges and universities are giving students choices and keeping enrollment high thanks to financial assistance.  A flourishing campus thrives both academically and economically. Less-burdened students are more likely to to study, shop, eat, and play on the grounds of their university.  Further, active students are more likely to achieve student success, helping retention and creating a vibrant environment for future student recruitment.

FA~Link is one tool supporting the targeted flow of financial resources to the right places on campus. First, it can open the door for students to get their course materials before classes start without having to dig into tight budgets or delay until they have the funds. Next, we help the campus meet all their requirements for student use of Aid with campus merchants. We continue to learn more about how campuses who give students early access to their aid see more and more evidence of student success.

See our case studies for Johnson & Wales , Columbus State University and Santa Ana University for examples of how campuses and students win with FA~Link.

Contact us to learn more.