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Understanding financial aid and advice on how to work with the financial aid office

NOTE: The following discussion refers to practices in the United States. Please be aware that the practices where you choose to study may be different.

Also, while we strive to keep Idealist current, new developments are always occurring. Please use the information below as a general overview and jumping-off point.

A graduate education is a serious investment of your time and money—in yourself and your career. In addition to reading the articles in the Financing Your Graduate Education section of this resource center, it's important to know how to work with the financial aid office throughout the entirety of your application and enrollment process to ensure a positive experience and outcome.

Financial aid officers realize that choosing to attend their program is a significant decision that can have financial implications for at least the next few years and possibly for the rest of your life. Their job is to help you, and there are a number of things you can do to make that possible.

A few things to know beforehand

Understand types of financial aid

Financial aid awarded by schools can be split into two basic categories: need-based and non-need-based aid. Non-need-based aid can sometimes be referred to as "merit-based aid" when it is awarded based on the merit of a student's academic performance, community activities, or athletic talent.

Need-based aid is commonly granted in the form of work-study, grants, and—until July 1, 2012—subsidized government loans such as subsidized Stafford and Perkins loans, in which interest on the loan is deferred until after graduation. (After that date, however, subsidized loans became available to undergraduate students only.)

Non-need-based aid is commonly granted in the form of unsubsidized government loans such as unsubsidized Stafford and Grad PLUS loans in which interest begins accruing while the student is in school. Unless you can afford to fully fund your graduate education and still have money to live on as a student, unsubsidized loans will help you cover the costs of grad school without you breaking the bank.

Your level of "need" is mainly determined by the Expected Family Contribution (EFC) from your FAFSA (Free Application for Federal Student Aid). Keep in mind that what the EFC determines your need to be, and what you feel your need is, may differ. The higher your EFC—how much you are expected to contribute towards the cost of education—the less your calculated "need" will be, and vice versa.

The FAFSA calculates your EFC based on a combination of questions asked on the FAFSA such as these four areas:

  • income—how much you earned in the prior year;
  • investments—what you own, including real estate (not including the home you live in), trust funds, UGMA and UTMA accounts, etc, and, if applicable, net worth of your business/farm;
  • household size—how many people live with you, including yourself, that depend on your income; and
  • dependent information—whether or not you are a dependent of someone else (your parents, spouse) and/or if you have any children as dependents.

While the FAFSA takes into consideration many factors to determine your EFC, the relationship between all the questions on the FAFSA can be generalized in the following way:

  • Lower income, lower EFC, higher need
  • Lower assets, lower EFC, higher need
  • Greater household size, lower EFC, higher need
  • If you are an independent, lower EFC, higher need

Don't rule yourself out prematurely

Regina Garner, Director of Student Financial Planning at Monterey Institute for International Studies, says, "Many students self-identify as ineligible for financial aid, when in fact they probably qualify for some form of assistance. Graduate financial aid is packaged very differently from undergraduate financial aid. Regardless of your income or assets, you may qualify for non-need based financial aid. The only difference is that the interest may not be deferred, however, you can still get a guaranteed loan with a competitive interest rate. So even if you think you earned too much to qualify you should still apply!"


It is imperative for grad school applicants to apply for financial aid, even if you don't think you'll qualify. All grad school applicants are considered independent, so you are already considered higher need. If you are a working professional with income, do not assume that you won't qualify for financial aid. The same goes for being a homeowner—as long as you live in the home you own, the home will neither count as an asset nor affect your EFC and thus financial need. If you do own more than one property, however, those that you do not live in will count as assets and lower your need.

Be aware of variations among schools

Universities will have varying financial aid processes, from the staff roles to different steps for applying for and adjusting your award package.

In some programs, your admissions officer also works on your financial aid award, or part of it. In other programs, the admissions office may be completely separate from the financial aid office. Asking the admissions staff with whom you work about their financial aid process early will not only help you understand and navigate the process better, but can make your experience more pleasant.

The way in which universities package aid also differs. Some craft aid packages that cover only what the EFC has determined is your need—while others will package aid up to the full cost of attending, offering aid to cover your need and the remaining cost to attend their school. Each will have a certain amount of flexibility for adjusting your financial aid, but you'll have to work with the financial aid office to figure out where and how.

Additionally some financial aid offices may only be in charge of granting need-based aid, whereas the admissions office awards merit-based aid available only to students in your program. In this case, you should appeal to the admissions office to ask for merit-based aid. Merit-based aid is awarded on institutionally set criteria since it is private funding from the university. It is important to understand the variations in financial aid practice among schools so that you can reduce any frustrations and assumptions about the process.

During the application process

Think of your application process as a relationship

Developing and maintaining a good relationship with the people in charge of your financial aid award is smart and just good common sense.

For some programs, the people you communicate with about your admissions application are the same people deciding your financial aid package. In others, the admissions and financial aid staff are different. Either way, you should aim to present your best, professional self to the admissions and financial aid office throughout your application process. In fact, many admissions staff consider every interaction with you in their final evaluation and decision.

That good relationship will continue to pay off throughout your graduate program, as you will have to reapply each year of study and perhaps renegotiate financial aid as your situation changes.

According to Catherine King-Todd, Director of Financial Aid at Thunderbird School of Global Management, "The rapport you have with financial aid will facilitate your time in school as it relates to your financial aid process. There is no such thing as a stupid question and as aid administrators we would prefer a question be asked that you think may be stupid than for you to miss out on financial aid. The financial aid staff truly enjoy working with prospective, enrolled students as well as alumni and should be considered a resource for you."

Apply—as early as you can

Apply for financial aid early—whether you think you need it or qualify—either alongside or shortly after your program application. From the financial aid staff perspective, determining financial aid is a complex and lengthy process, much like processing taxes. They are busy processing financial aid applications for many (possibly several hundred) other prospective graduate students. The more time the staff has, the lengthier the consideration they can give your application. Also important to keep in mind is that schools often distribute the best financial aid options (grants, work-study, lower interest loans) on a first come, first serve basis.

Follow each program's instructions on applying

While some elements of applying for financial aid—such as completing the FAFSA—are common for all programs, each grad school will have its own particular requirements on additional documentation and their submission process.

Be sure to pay attention to and follow each school's instructions! Complete everything they ask for in the initial application and any follow-up questions in a timely manner. Following instructions exactly decreases the likelihood of any delays or stress in your financial aid award offer, and demonstrates your competence as a potential member of their student body.

Be prepared and proactive

Make copies of all documents. In the highly unlikely case that your financial aid application or its components are lost along the way, having copies of everything will enable you to quickly respond to whatever the financial aid office needs from you.

Thunderbird's Catherine King-Todd strongly encourages, "students to start a file or notebook with copies of documents submitted and received once the process of applying for financial aid begins to keep organized. Although federal regulations are the same for all institutions, there will be processes and other steps that will vary from school to school based on their specific policies. Additionally, once enrolled [there will be] more communication from the financial aid office, the Federal Processor, and lenders. It is essential to read all correspondence and ask questions of the financial aid staff as necessary."

To make sure that your application is received and for your own peace of mind, you can request certification via the United States Postal Service. Do not request a signed receipt—the financial aid staff already has enough to do without signing for each application they receive! But the certification will help you track your application's journey to the financial aid office and confirm that it's arrived in time.

Don't put all your eggs in one basket

The financial aid staff will do everything they can to help you fund your graduate education from the resources they have. Because all applicants to their program will be "competing" for part of the same pool of funding that the school can offer this year, it is smart to research and apply for as much independent funding, or "free money"—in the form of grants, fellowships, and scholarships from sources outside of the university—as you can. Free money is the best form of financial aid, even if it makes you ineligible for loans. Less loans, less debt.

Depending on how successful your efforts are, you will have that many more options for financing your graduate degree, making you less dependent on the actual financial aid award you receive. Let's say, for example, that your top choice school doesn't give you as much assistance as you would like, even after appealing, and your second choice school offers a full scholarship. If you did some extra work on your own for financial aid and receive a couple small education grants from foundations that support professionals in your field, you may be able to afford your top choice school after all.

  • Begin researching outside funding sources

After you've been admitted

Hopefully you have a few choices and are now trying to decide which program to attend while carefully considering the financial impact of your choice. Remember, you do not have to accept the offer as is or at all!

Report any changes to your financial situation

Changes to your financial situation can include receiving outside awards or experiencing unforeseen financial hardship since applying for financial aid. Reporting changes immediately will allow the financial aid office to work with you to adjust your award package as necessary. If you need additional financial aid, staff can help you figure out what options are available either in the form of grants or loans.

If you are supplanting financial aid with outside awards, you must contact the Financial Aid office to make necessary adjustments to your financial aid package. One thing to keep in mind when reporting outside aid is that it will not be added on top of your financial aid package, but re-calculated into your need, or EFC. In general, if you demonstrate "need," the financial aid office at your school will try to get rid of your worst loans first ("worst" loans being those that are unsubsidized and/or have higher interest rates).

But, again, there may be certain financial aid regulations and other factors determining how you can best apply the outside award to your graduate education costs. Remember, the financial aid counselors will be doing their best to help you optimize the final package and "free" money is the best form of financial aid award you can get, so reducing your loans is a good thing!

Appeal your financial aid package if it's not sufficient

You may want to appeal your package for a variety of reasons:

  • You want less of a certain loan, e.g., you want to decrease the amount of unsubsidized loans in your award.
  • You want less of a stipend (possibly work-study) that has a labor stipulation, e.g., you must tutor a certain number of hours per week in order to receive the stipend.
  • You'd like a teaching assistantship (sometimes you have to ask for this).
  • You really want to go to this program but got a better offer at another school.

To appeal, the best approach is to get in touch with the financial aid office immediately and present them with your situation. Again, remember to be professional. Ask yourself: "What would make or break my decision to go to this school in terms of the financial aid award?"

When you speak with financial aid, be sure to thank them for the award, present your situation, and ask them what, if any, options there are to improve your award. If there is not much wiggle room for changing your financial aid package, you may be put on a wait list for Federal work-study if it was not already awarded to you. Also ask them when you might hear back from them so you can follow up at that time; they are probably fielding many other requests like yours. It may take a few days or more. Trust that they will do their best to help you.

Give thanks

As Gertrude Stein once said, "Silent gratitude isn't much use to anyone." So give thanks to the people who helped put together your financial aid award. A simple thank you card will suffice, whether you end up going to that program or not! The note will let the financial aid office know you appreciate their efforts on your behalf, and may go a long way in helping you down the road should you enroll at that program. You never know when you may need their help again when reapplying for financial aid! Not to mention that while they probably hear a lot of grumpy feedback from dissatisfied students, they may not hear back from many students once a problem has been resolved.

Conclusion and further resources

Thinking about the cost of a graduate education can be very stressful. Your financial aid award will depend on many factors that you can and cannot change. Also, recognize that the financial aid staff are people too, and that your stress can affect how you interact with them, and how they will respond to you. Their job is to help you, so help them help you. Do your part by applying early, applying for outside aid, and being professional, friendly, and appreciative in your interactions with financial aid.