How college financial aid actually works

The order money should come in

1. Grants: free money based on financial need (Pell, state grants, the college's own grants). The FAFSA applies for all of these at once.
2. Scholarships: free money for merit, interests, or background.
3. Work-study: a part-time campus job included in aid offers. Fine, but it is wages you earn, not a discount.
4. Loans, last and least. If borrowing is needed, federal subsidized loans first; be very slow to touch anything else.

What happens after you file the FAFSA

1. The FAFSA turns your family's finances into one number: the SAI (Student Aid Index).
2. Every college you listed gets it and builds an aid offer: grants, scholarships, work-study, and loans.
3. Sticker price minus the free money is your net price, the only number that matters when comparing colleges.

Before applying anywhere, run each college's "net price calculator." Every school is required to have one (search the school name plus "net price calculator"). It predicts your real cost in about ten minutes. A number of private colleges also require the CSS Profile to give out their own grants, so check each college's financial-aid page.

The four buckets, sized honestly

• Federal aid: the foundation. Pell tops out around $7,400 a year, and the FAFSA also unlocks subsidized loans and work-study. One form covers all of it.
• State aid: often the second-biggest check, and the most overlooked. Some state grants exceed $14,000 a year at in-state privates.
• The college's own money: at private colleges this is usually the largest discount of all. Schools routinely knock $20,000 to $40,000 off their sticker, which is why net price calculators matter more than rankings.
• Private scholarships: for most students the smallest bucket. Treat them as the bonus that closes the gap, not the plan itself. The plan is the first three buckets.

Why sticker price lies in both directions

Take a family earning about $85,000 with one child heading to college. At a community college with a $12,000 cost, grants often cover most of it. At an in-state public with a $28,000 sticker, federal plus state plus campus grants might bring the real cost to about $17,000. At a $60,000 private with deep institutional aid, the net price can drop below the public's. Same family, three wildly different letters. Never cross a college off your list because of its sticker price, and never trust a sticker price in either direction until the net price calculator has spoken.