College Costs & Aid Explained

Understanding College Costs & Financial Aid Packages

For most, paying for college will involve some sort of financial aid. While there is plenty of information out there, making sense of it all can be intimidating. Understanding the financial implications of any aid you are offered, as well as the student’s obligations, is part of the higher education experience. Here’s a handy glossary of terms to help clarify the various elements of the process.^1,2

1. Direct Costs: What the student pays to the school.^1,2

• Tuition—Costs of enrollment and courses.
• Fees—Costs for services not covered by the tuition (activities, lab fees, etc.)
• Housing—Costs for dormitories or apartments run by the school.
• Food—Meals and food services provided by the school.
• Parking—Fees/permits for on-campus parking.

2. Indirect Costs: These aren’t billed by the school, but the financial aid might be able to pay for these expenses.^1,2

• Books/Supplies—Textbooks and other materials required for coursework.
• Personal—Everyday expenses ranging from entertainment to toiletries.
• Transportation—Gas, public transportation, and airfare.

3. Grants/Scholarships: Any financial aid that requires no repayment.^1,2

• Merit-Based Scholarships—Aid offered based on academic accomplishments.
• Need-Based Aid—Typically determined by FAFSA based on the student’s financial situation (Federal Pell Grants and Federal SEOG Grants are two types).

4. Student Loans: While grants and scholarships are essentially free money for school, loans must be repaid, typically with interest, once the student leaves school.

• Health Professions Student Loan—For those in the medical and health fields, these low-interest, need-based loans begin repayment a year after graduation.
• Direct Subsidized Loan—The government pays the interest on these need-based loans while the student is in school and during deferment periods. Once the student is out of school, repayment begins in six months.
• Direct Unsubsidized Loan—Interest accrues immediately on these loans. Repayment likewise begins after the student leaves school.
• Other loans—While federal loans may have lower interest rates, private loans come from other banks and lenders, and may have varying terms and requirements.

5. Other areas to consider:

• Work Study—A federal program offering part-time jobs, usually on campus, to students with financial need.
• Personal Expenses—The student’s total out-of-pocket expenses (total of direct and indirect costs minus grants, scholarships, and loans).

For more detailed information, make sure to contact your school’s Office of Financial Aid. Your family’s financial professional may also have some valuable guidance to contribute.

🗓️ The SAT/ACT 2025 Testing Testing began in August 2025 and closes July 2026. Check out collegeboard.org for more.³

🗓️ The 2025–26 Free Application for Federal Student Aid (FAFSA®) form is available for submission from July 1, 2025, to June 30, 2026. However, States and schools can also have their own FAFSA deadlines. Be sure to check those deadlines by contacting your chosen institution's Office of Financial Aid.⁴

🗓️ College fairs and visits can be a wonderful resource when deciding on your institution. Many institutions offer guided tours or attend fairs for future students. For the most up-to-date information bookmark: www.nacacattend.org

🗓️ Early decision deadlines vary slightly from school to school, but most fall on November 1 or November 15. Always check the deadlines of your top schools before applying.

🗓️ Other deadlines differ drastically depending on the institution of your choice. Bookmark the most recent deadline page offered and check it often.

<sup>1. U.S. News and World Report, January 23, 2025.
2. University of Health Sciences & Pharmacy in St. Louis, July 29, 2025.
3. Educationdata.org, January 28, 2025.
4. Educationdata.org, January 28, 2025.</sup>