Guide to Financial Aid and Community Colleges in 2021

Written by: Matt Kuncaitis
Updated: 7/14/21

Community college is an excellent option for many students. The doors to most community colleges are open to everyone, whether you just got out of high school or haven’t cracked a book in decades. 

Even though community college tends to be much less expensive than four-year and private institutions, the cost of attendance can still add up, particularly when you add in textbooks, school supplies and fees. Because of this, many students apply for financial aid to help pay for their schooling. 

Students attending community college might be looking for a way to ease into college educationally or financially, seeking certificates or an associate degree, or planning on transferring to a four-year school later on. 

Whatever the reason, if you’re looking into attending community college, this guide will help you discover everything you need to know to get financial aid to help pay for your community college education.

What Is Financial Aid?

Financial aid is money in the form of grants, scholarships, loans and work-study that you can use to pay for college expenses. Grants and scholarships are essentially “free money” that you don’t have to pay back, while loans will need to be repaid after you graduate or leave school. Work-study consists of federally funded jobs you can do to earn money while in school.

The primary source of aid for most students comes in the form of federal grants, loans and work-study offered by the U.S. Department of Education as a financial aid package to qualifying students who submit a Free Application for Federal Student Aid (FAFSA) application. As the name implies, the application is completely free. To apply, you will need to supply information about your current financial situation (as well as that of your parents or guardians if you are under the age of 24).

Ideally, you should complete the FAFSA as soon as possible once you enroll so that it can be processed before tuition becomes due. After processing, you will receive a Student Aid Report that lists the grants, loans and work-study you qualify for from the federal government.

Additional financial aid exists in the form of need-based and merit-based grants and scholarships offered by the college or any number of independent organizations. Additional student loans may also be obtained from private lenders if needed. 

Different sources of financial aid may come with different stipulations, however. Some may require that you maintain a certain minimum grade point average (GPA), for example, or that you remain in school at least half-time or full-time. There may also be limits on how the funds can be used. Some financial aid might be usable for tuition only, while other aid might be usable toward books and fees or room and board.

As with the FAFSA application, you’ll want to apply for all forms of aid as early as possible. Many scholarships and grants have spring deadlines for the following school year, although some have later or rolling deadlines. It’s a good idea to obtain and use as much “free money” as you can before taking out loans. 

The 4 Types of Financial Aid

This section breaks down the four main types of financial aid awards in more detail and provides tips on how to qualify and apply. 

Student Loans

Student loans are borrowed money that you can apply toward your college expenses but that you need to repay after leaving school. Federal student loans usually offer the best terms, but private banks and lending institutions offer these types of loans, as well.

You can qualify for federal student loans by completing and submitting the FAFSA, and most loans offered don’t require a credit check. Depending on your financial situation, you may qualify for a combination of the following federal Direct Loans:

  • Direct Subsidized Loans: These are loans made to those demonstrating financial need. While you are in school, the federal government subsidizes the loan, meaning they pay the interest, so your loan doesn’t gain interest while you are in school at least half-time.
  • Direct Unsubsidized Loans: These loans aren’t based on financial need and are offered to almost everyone. Unlike subsidized loans, though, they will accrue interest while you are in school. 
  • Direct PLUS Loans: These loans are for graduate or professional school, or they can be taken out by the parents of an undergraduate student to help pay for their child’s education. A credit check is required for these loans. 

Because federal student loans are easier to qualify for and often have better interest rates, flexible repayment options and even loan forgiveness opportunities, it’s almost always a good idea to use federal loans instead of private student loans. However, there are some situations in which you may not qualify, such as if you are an international student. 

Private student loan options are abundant but vary widely in eligibility requirements, interest rates and repayment options. Always carefully review any paperwork associated with loans that you take out.


Grants are another popular form of financial aid that generally doesn’t need to be repaid. When you submit your FAFSA, you will automatically be considered for the following federal grants if applicable:

  • Federal Pell Grants: Amounts of up to $6,495 are awarded for the academic year for qualifying undergraduates with financial need. However, check back with, as award amounts change each year.
  • Federal Supplemental Educational Opportunity Grants (FSEOG): Amounts of up to $4,000 per academic year are awarded to those with financial need attending participating schools.
  • Iraq and Afghanistan Service Grants: If you aren’t financially eligible for a Pell Grant and have a parent or guardian who died in military service in Iraq or Afghanistan after the events of 9/11 and were under the age of 24 at the time, you may qualify for amounts up to approximately $6,000 per year.
  • Teacher Education Assistance for College and Higher Education (TEACH) Grants: If you are planning on becoming a teacher and are willing to sign an agreement to teach in a high-need field at an elementary or secondary school that serves low-income families for at least four years after you graduate, you may qualify for as much as $4,000 per year, provided you meet GPA and other requirements. 

The federal government is not the only source for grants, however. Many independent organizations offer need- and merit-based grants, as well. It’s well worth it to spend some time researching grants you might qualify for, including grants for women and minorities or grants for people focusing on specific areas of study. Your community college may even offer additional grants — just check with your financial aid office.


Just like grants, scholarships are a form of free money. In fact, scholarships and grants are very similar. The key distinction is that grants tend to be need-based, while scholarships tend to be merit-based, although this isn’t a hard and fast rule. 

While scholarships aren’t part of the federal financial aid package offered after submitting your FAFSA, many scholarships require that you complete a FAFSA first, and they may use information from this application in their decision-making. Most scholarships, however, are granted based on your merit or academic performance. This is why it pays to do well in school and make efforts to engage in student activities. 

There are many databases that allow you to search for scholarships you might qualify for quickly and easily. Many now even offer common application processes that allow you to apply to multiple scholarships by submitting a single application. You should also check to see if your school offers merit-based awards.

The more scholarships you apply for, the better your chances of receiving an award. In general, you’ll want to pay for as much of your education in scholarships and grants as possible to save yourself money now and down the road. Keep in mind, however, that if you receive a scholarship, you might be required to maintain a certain GPA or other requirements to keep it. 


After you complete your FAFSA, you might be offered a federal work-study job. The Federal Work-Study Program provides part-time jobs for students demonstrating financial need. These jobs help students make money they can use to pay for tuition or other expenses associated with attending school. 

The hours of work you can do will be specified in your Student Aid Report, and the exact nature of your work-study job will depend on what your school has to offer, but the program emphasizes employment in civic education and work related to your course of study when possible. Examples include tutoring, working in the college fitness center, monitoring the computer lab or helping out in the library.

Can You Get Financial Aid at a Community College?

The answer is absolutely! Community college students qualify for most of the same types of aid as students attending four-year institutions. This includes all federal aid described above, which you qualify for through your FAFSA application, as well as a whole host of scholarship and grant opportunities. However, some independent grants and scholarships might require attendance in certain programs not offered at your school or enrollment in a bachelor’s degree program.

How Long Can You Get Financial Aid at a Community College?

The short answer is, it depends. Most financial aid comes with some sort of stipulation or lifetime limit. Most types of aid have some sort of requirement that you be enrolled at least half-time or full-time and that you make satisfactory academic progress toward a degree or certificate. 

For example, you’re no longer eligible for a Federal Pell Grant if you have received one for 12 semesters (six years of school). Federal student loans have maximum annual and lifetime limits as well, although most community college students come nowhere near meeting or exceeding those amounts. 

A common metric used to determine if you are on track is whether you expect to receive your degree within 150% of the standard time frame. This means earning a two-year degree in three years or less or a four-year degree in six years or less. 

Financial Aid Mistakes of Community College Students

There are several things that community college students should watch out for regarding student aid. The following sections describe just a few common mistakes that could end up costing you money.  

Not Applying/Procrastinating for Aid

You can’t receive aid if you never apply for it. Yes, the application process may take time and effort, but the amount of money received in scholarships and grants often more than makes up for it. 

Keep an eye on deadlines, as well. You don’t want to miss out because you waited a week too long to mail some forms. Even when deadlines aren’t early, it’s best not to procrastinate. Tuition is often due at the beginning of the term, and if your financial aid hasn’t arrived in time, you will need to pay out of pocket.

Taking Too Many Courses to Qualify for Aid

Depending on the aid, you might be required to enroll half-time or full-time to qualify. However, if you are going to school while also working full-time or raising a family, it might not be feasible to take on that many credit hours at once. The last thing you want to do is take on too many courses just to get aid, only to end up failing them because you’re stretched too thin. It’s a one-way ticket to academic probation, loss of aid money and a dirty blip on your transcript. 

Not Considering Scholarships

Some students fill out the FAFSA form and accept their federal aid while never branching out and applying for scholarships. They may falsely believe they won’t qualify for any. 

But there are so many scholarships out there and several that might even seem designed just for you that pertain to your particular skills, interests or talents. It doesn’t hurt to apply, and you may end up pleasantly surprised at how much of your education you can fund with “free money” instead of student loans. 

Learn More About Community College Financial Aid at

If you’re looking into how to finance your community college education, you’ve come to the right place. has resources to help you through the process of filing your FAFSA, searching for scholarships and applying for student loans. Discover how you can afford college costs by making informed financial decisions and more.