The Bridge: Kaua'i to College

Here's how the financial aid process works: 

Schools send out financial aid packages to accepted students, usually about a month after the acceptance letter.  Those packages will list money from different sources that make up 100% of what they estimate it will cost for you to attend their school for a year.  Those

costs include tuition, room and board, books, living expenses, travel costs.  Each school makes the calculation for themselves.

The usual sources of financial aid listed in their letter will be:  tuition reduction, grants and scholarships, work-study (on campus job) opportunities, expected money contributed by the student (from summer work or other sources you have), expected money contributed by the parents, and loans of different kinds to the student and/or to the parents.

Your family's expected ability to pay college expenses is derived from the FAFSA, and sometimes additional evaluation instruments (for example, the College Scholarship Service Profile or the Consensus, depending on the school).  The financial aid package they give you will be keyed to this expected ability to pay.  However, only a percentage of schools are committed to charge you and your parents only what you can afford.  These "need-blind" schools commit to find other resources, often from within their own donations, to make up any difference.  Other schools will offer you and, primarily, your parents, a variety of loans to make up any difference.   Clearly, if you need money, you want to go to need-blind schools!
 

Okay, now pay attention! 
  Grants and Scholarships do not have to be paid back! The best!

  Loans do have to be paid back.  Useful but not the best (see the previous line).
Like any other loan for a house or a car, banks charge a fee (called interest) which is a percentage of what you borrow.  In fact, they charge interest continually and interest then begins to be charged on interest.  In other words, depending on how quickly you can pay back the loan, you will pay extra beyond what you borrowed (called principal). 
     Some educational loans start charging interest right away--not the best. 
     Some wait until the year after you graduate--a lot better .

  Work-Study  are jobs on campus that the federal government pays you to do.  (There are lots of other jobs, often on campus or nearby, that you can get, too.) Work-study jobs can give you work and even career experience while you are going to school--pretty darn good!
 

To really get into the nitty gritty, these useful sites are all administered by the U.S. Department of Education.

Federal Student Aid is a good starting place for students planning for college and looking for financial aid. 

Free Application for Federal Student Aid (FAFSA) takes students line-by-line through the financial aid application process.

Financial Aid Overview has links to many useful sites on this topic.

Information for Financial Aid Professionals (IFAP) consolidates guidance, resources and information related to federal student aid.

Funding Your Education: The Guide to Federal Student Aid, published by the U.S. Department of Education (DOE), is one of the most comprehensive resources on student financial aid, covering major aid programs, including Pell Grants, Direct Loans and PLUS Loans.