Financial Aid Overview and Scholarships
According to the National Center for Education Statistics (NCES), the average cost of tuition, fees, and room and board in 1985 across all types of institutions was $9,346. Thirty years later, that amount has climbed to $23,842, a 153% increase. While college costs continue to rise, today's college students are also weighed down by a staggering $1.3 trillion student loan debt total.
Several sources provide funding for students hoping to earn a college degree. The U.S. Department of Education earmarks over $120 billion per year for higher education. State governments provide residents several ways to pay for college, such as loan forgiveness programs and tuition reduction for in-state students. Colleges and universities are also good sources for scholarships, and some degree programs offer financial assistance to their student majors.
This guide focuses on the counseling field, which is projected to grow by 13% from 2016 to 2026. Offering scholarships attracts potential future professionals to the field. Some scholarships, such as school counseling scholarships, are for students specializing in a specific counseling field. But as this guide shows, several scholarship programs exist for general counseling majors.
Paying for Your Counseling Degree and Licensure With Financial Aid
To find out how much education assistance from the Department of Education they qualify for, students must first fill out the Free Application for Federal Student Aid (FAFSA). FAFSA forms become available on October 1 each year. All students planning to enroll in -- or who have been accepted to -- a college, vocational, or graduate school in the U.S. should consider filing the FAFSA, no matter their financial circumstances. It's a common misconception that a high income bracket automatically prevents one from qualifying for FAFSA assistance or that only students with exceptional academic achievements qualify for aid. Neither statement is accurate. All students accepted to a U.S. institution of higher learning, who are American citizens or permanent legal residents of the United States, can apply for FAFSA. Eligible non-citizens, like students from American Samoa, may also qualify under certain conditions.
Not only the U.S. government uses information from the FAFSA to determine the amount of financial aid for which a student is eligible. Colleges and universities also use a student’s FAFSA information to determine financial assistance packages. Private organizations who award scholarships often ask for the FAFSA, too. As a general rule of thumb, expect to provide the following documents: tax returns; records of untaxed income, such as child support; savings and checking account balances; and investments, including stocks, bonds, and real estate (except for one’s primary domicile). Dependent students must supply their parents' or guardians' documents.
Determining Your Financial Need
Based on the information on a student’s FAFSA, the Department of Education generates a student aid report (SAR), which indicates a student’s federal aid eligibility. The school (or schools) a student hopes to attend also receives a copy. The school first calculates how much it costs the student to study at the school, or the cost of attendance (COA). The COA includes tuition and fees, room and board, and other expenses (like books, materials, and transportation). Then the school calculates a student’s expected family contribution, or EFC. The EFC includes taxed and untaxed income, as well as assets and other benefits, such as Social Security income.
The school subtracts the EFC from the COA to determine the amount of need-based aid to which a student may be entitled. To calculate the amount of non-need-based aid a student for which a student may be eligible, the school takes any financial aid the student has already been awarded and subtracts this from the COA. Need-based federal student aid programs include: the Federal Pell Grant; Federal Supplemental Educational Opportunity Grants (FSEOG); Direct Subsidized Loans; Federal Perkins Loans; and Federal Work-Study. The following are non-need-based federal student aid programs: Direct Unsubsidized Loan; Federal PLUS Loan; Teacher Education Access for College and Higher Education (TEACH) Grant.
Sources of Financial Aid
- School Aid: Colleges and universities often offer several scholarship opportunities to their students. Merit-based scholarships are available to students with exceptional academic achievements. Some college departments have scholarship opportunities for students enrolled in their programs. For example, a psychology department may offer school counseling scholarships to entice more students to pursue a degree in this increasingly high-need field. Most schools also offer scholarships to selected student athletes.
- Federal Aid: Federal aid is basically any type of financial assistance awarded from the U.S. government through the Department of Education. Some types of federal aid, such as the Pell Grant, do not have to be repaid. Other types, such as the Direct PLUS Loan, must be repaid. Graduate students (or their parents) may take out a Direct PLUS Loans to help cover educational expenses.
- State Financial Aid: Every state offers some type of financial assistance to students enrolled in their colleges and universities. Aside from lower tuition for in-state students, several states have financial assistance programs in place for disadvantaged students, including minorities, women, and foster care youth. Some states offer scholarships for students pursuing a career in a high-need field. States where the counseling field needs workers, for example, offer scholarships for counseling majors.
- Privately Funded Scholarships: Private scholarship opportunities come from sources including civic organizations, fraternities and sororities, professional associations, churches, and private/public companies. Most offer scholarships to members and/or their dependents; some expand their scholarship criteria to include individuals who embody their ideals and promote their values. Privately-funded scholarships often consist of small amounts ($500 to $2,000), meant to 'top off' student finances, rather than cover an entire year of educational expenses.
Types of Financial Aid
- Scholarships: A scholarship is financial assistance not requiring repayment, and is a sought-after source of educational funding. To qualify for most scholarships, applicants must meet a set of criteria or possess characteristics or abilities specified by the terms of the scholarship. This can include having an exceptional academic background or possessing certain artistic talents or athletic abilities.
- Grants: Most grants are based mainly on an applicant’s financial circumstances, rather than their inherent qualities. Grants can come from the government and private sources. To apply for a federal grant such as the FSEOG, the student’s school must participate in the federal program administering the grant. If a student withdraws from a federal grant program, the grant may be converted to a Direct Unsubsidized Loan, which requires repayment.
- Federal Loans: Unlike scholarships and grants, federal loans must be repaid. However, they feature low fixed interest rates, making them a more practical option than private student loans. Certain types of federal loans may be forgiven when a borrower fulfills specific requirements, such as working in a high-need field or with an underserved population. Payments on federal student loans may also be deferred when a student goes back to school or experiences financial difficulties.
- Private Loans: Taking out a private loan to pay for education is often the last resort for a majority of students. Private loans typically feature variable interest rates and monthly payments may vary, making maintaining a budget difficult. Additionally, private loan payments are due almost immediately after a student takes out a loan, which means students must maintain loan payments while still in school.
- Work-Study: The federal Work-Study Program provides students with a chance to earn by working part-time hours while enrolled in school. Students can only apply for work under the program if their college or university participates in the program. Because there's often a minimum number of hours a student must complete to stay on the Work-Study Program, it's seldom the ideal funding option for distance learners, such as those already holding down full-time jobs while pursuing their degree.
Working from the SAR, the financial aid office of a college or university determines a student’s financial aid package, which can include federal loans, work-study awards, grants, and scholarships. Federal financial assistance can be applied to educational programs or degrees offered by four-year colleges and universities, trade or career schools, and community colleges:
- Federal Pell Grants: This grant is open to students with extreme financial need who do not yet have a bachelor's or graduate degree. Award amount is up to $6,095 for 2018-2019.
- Federal Supplemental Educational Opportunity Grants (FSEOG): Undergraduate Pell Grant recipients receive priority over other applicants for this supplemental grant. FSEOG awardees can receive up to an additional $4,000 per year.
- TEACH Grants: Applicants must be undergraduate or graduate students studying to be elementary or high school teachers and willing to teach in a high-need area upon graduation. Grant awards are up to $3,736.
- Iraq and Afghanistan Service Grants: Parent or guardian of applicant must be a deceased U.S. armed forces member who served in Iraq or Afghanistan after 9/11. Grant awards are up to $5,529.28.
State governments know the value of well-educated workers who are invested in the region. This is why most state education agencies have some type of state grant designated for residents seeking higher education or skills training. The National Association of Student Financial Aid Administrators has compiled a list of financial aid programs available through the education agency of all 50 states. Some states also participate in regional tuition exchange programs, making it possible for non-resident students in all participating states to pay in-state tuition.
Scholarships can significantly lower the cost of a college education. Academic, athletic, and minority scholarships are the best-known scholarships available, but scholarship programs exist for multiple capabilities, such as artistic talent, scientific acumen, and even comedic skills. Applying to several scholarship opportunities increases the odds of getting enough to cover a significant portion of the costs of a top-caliber education. At the end of this article is a list of scholarships specifically compiled for students interested in pursuing a counseling career.
Taking Out Loans to Pay for Your Counseling Degree
As mentioned above, the cost of higher education in the United States continues to increase each year, and scholarships and awards generally do not come close to covering tuition costs. In turn, most students take out loans to supplement whatever scholarship or grant money they receive. Estimates suggest at least 70% of students graduate from four-year institutions with some type of student debt. Students usually have the option of taking out either a federal loan or a private loan to help pay for their education. Although both must be repaid, federal loans hold several advantages over private loans, as discussed below.
What Kind of Loan Should You Take Out?
Federal student loan interest rates remain constant for one year. Congress sets the rate each year based on the most recent 10-year treasury bond rates. In contrast, most private student loan lenders base their interest rates on the London Interbank Offered Rate (LIBOR), which reflects larger market trends. Private lenders can change the interest rates on their loans whenever it is most advantageous for them, which may be to a borrower’s disadvantage. Some private student loans feature low interest rates, but borrowers must have an excellent credit history to qualify for them (typically a credit score of 700-plus). These low-interest private student loans also often require a co-signer.
Federal student loans come in two types: subsidized and unsubsidized. The U.S. government shoulders interest for federal subsidized loans. In contrast, federal unsubsidized loans begin accruing interest soon after students accept them. Additionally, students may be able enroll in loan forgiveness programs wherein students agree to work with underserved populations or in poor urban or rural areas after graduation. Several federal and state loan forgiveness programs currently exist to serve high-need fields such as nursing, social work, and counseling.
When students begin paying their loans, they may qualify for a variety of payment plan options. In the Standard Repayment Plan, students pay a fixed amount every month. While all borrowers are eligible to participate in the Standard Repayment Plan, it may not be the best option for some borrowers, such as those who plan to enroll in the Public Service Loan Forgiveness program. Borrowers can also opt to follow an income-driven repayment plan. The monthly payments for this type of plan are typically 10% to 15% of a borrower’s discretionary income, but not more than what the borrower would have to pay under the Standard Repayment Plan.
Students who took out several federal student loans can consolidate their loans under the Direct Consolidation Loan program. Under this program, borrowers make one monthly payment rather than making multiple payments. There is no fee to consolidate federal student loans and a consolidated loan may still qualify for a loan forgiveness program.
Borrowers facing difficulty making their loan payments on a regular basis may have the option to consolidate their loans, switch to an income-driven loan program, request a deferment, or file for forbearance. Students may find the Department of Education's Repayment Estimator Calculator helpful for calculating affordable monthly payments.
The federal government offers loan forgiveness options for students with special circumstances or for those who enter a particular career field upon graduation. Borrowers may discharge loans for several reasons, including permanent disability, school closure, and, under certain conditions, bankruptcy. Loan forgiveness options may be available for students who opt to work in public service or in education -- specifically as a teacher -- after graduation. Certain types of loans may also be dischargeable (such as the Federal Perkins Loan), when students find employment as firefighters, law enforcement officers, teachers at a tribal college or university, or professional providers of early intervention services for disabled persons.
Healthcare professionals who work in High Professional Shortage Areas (HPSA) can apply to have their student loans forgiven through the National Health Service Corps (NHSC) program. Administered by the Health Resources and Services Administration (HRSA), NHSC offers a State Loan Repayment Program for over 30 states. As long as they practice in a facility within an HPSA, most licensed professional counselors are currently eligible to apply to this program. Loan forgiveness applicants must not be in default on any of their student loans and must be employed for the entire length of time stipulated in the contract.
Financial Aid for Graduate Students
Direct Unsubsidized Loans, sometimes referred to as Unsubsidized Stafford Loans, allow graduate students to borrow up to $20,550 per year. The Direct PLUS Loan is for students who must borrow more than the maximum allotment under the Direct Unsubsidized Loan program.
The U.S. government does not shoulder the interest payments for these programs even when the student is enrolled.
Graduate students enrolled in a teaching program are eligible to apply for the Teacher Education Assistance for College and Higher Education (TEACH) Grant. Award amounts are up to $4,000 per year. Recipients must agree to teach in areas or fields stipulated in the contract to prevent the award amount from being converted to a loan. Future teachers can also apply for the Pell Grant (which is not a loan and therefore does not need to be repaid).
The Federal Work-Study Program allows students enrolled in participating schools to earn money for their education through community service work or in jobs closely related to their area of study. Students earn at least the minimum wage, but their pay may not exceed the amount of their Work-Study award.
Some states and individual colleges and universities offer additional funding options for graduate students in the form of fellowships, grants, and teaching assistantships. Funds for these programs derive from several sources, including government subsidies and private donors. Graduate students should also check whether their employer offers a tuition reimbursement program.
The following foundations and organizations offer scholarships for counseling majors.
Scholarships for Counseling Students
American Addiction Centers’ Behavioral Health Academic Scholarship
Who Can Apply: The scholarship accepts applications from full-time or part-time undergraduate or graduate students who are enrolled in an accredited social work, psychology, nursing, or counseling program. Applicants must submit an essay on the challenges of drug addiction treatment.
Amount: $2,500 to $5,000
American School Health Association Scholarships (ASHA)
Who Can Apply: Candidates who are at least in their junior year of studies with a 3.0 GPA can apply for this school counseling scholarship. ASHA also awards successful applicants a free three-year student membership.
Betty W. Robbins Endowed Scholarship
Who Can Apply: This school counseling scholarship is open to college students pursuing a bachelor’s degree. Applicants must be enrolled in an accredited college in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, or Tennessee.
The F. Edward Hebert Armed Forces Health Professions Scholarship Program
Who Can Apply: Applicants must be enrolled in a graduate-level clinical or counseling psychology program in an accredited university. Applicants must also qualify as a commissioned officer and maintain full-time enrollment throughout the scholarship period.
Amount: 100% tuition, books, living expenses, $2,000 monthly stipend
Lullelia W. Harrison Counseling Scholarship
Who Can Apply: Although this is a Zeta Phi Beta Sorority scholarship, the scholarship organization does not require applicants to be sorority members to be considered. All undergraduate and graduate students enrolled in a counseling degree program may apply. Applicants must be full-time students.
Amount: $500 to $1,000
Melanie Merola O’Donnell Memorial Scholarship
Who Can Apply: Scholarship applicants must be pursuing a master’s or doctoral degree in the mental health field. Applicants must present proof of involvement in volunteer, research, or career-related activities and evidence their commitment to supporting victims of violence.
National Board for Certified Counselors Scholarships (NBCC) Military Scholarships
Who Can Apply: This scholarship opportunity accepts applications from service members, veterans and their spouses establishing a career as professional counselors. Applicants must be pursuing at minimum a master’s level degree and enrolled in a CACREP-accredited program.
NBCC Rural Scholarships
Who Can Apply: Applicants must be enrolled in a master’s level CACREP-accredited counseling program and live in a rural area (as defined by the Health Resources and Services Administration). Scholarship recipients must commit to serve in rural areas for at least two years.
NBCC Minority Fellowship Program (Mental Health)
Who Can Apply: This program is open to graduate students pursuing a master’s level program in mental health counseling. After earning their degree, applicants must commit to providing mental health services to underserved minority transition-age youth (16-25).
NBCC Minority Fellowship Program (Addictions)
Who Can Apply: Master’s level addictions counseling students can apply for this substance abuse scholarship. Applicants must have experience working with racially and ethnically diverse populations. Upon completion of their studies, graduates must commit to serve the minority transition-age youth population.
National Federation of Republican Women National Pathfinder Scholarship
Who Can Apply: Applicants must be undergraduate or graduate female members of the Republican Party. To be considered for this substance abuse scholarship, applicants must submit two essays—one about why they believe they should receive the scholarship and a second essay about their career goals.
Pride Foundation Scholarship
Who Can Apply: The foundation offers 10 scholarship opportunities to LGBTQ students pursuing degrees in counseling and psychology. Applicants must be residents of Alaska, Idaho, Montana, Oregon, or Washington. Students may use the same application for each scholarship for which they wish to apply.
Amount: up to $10,000
Ronald D. Lunceford Scholarship
Who Can Apply: The California Association of Marriage and Family Therapy seeks to grant this scholarship to a student from an underrepresented ethnic population who is enrolled in an M.A., M.S., or Ph.D. program qualifying them for licensure as a marriage and family therapist.
Violet and Cyril Franks Scholarship
Who Can Apply: This scholarship supports post-baccalaureate students involved in graduate-level research projects seeking to understand and reduce the stigma associated with mental illness. Applicants must demonstrate competence and scholarship in the field of mental illness.
William L. White Student Scholarship
Who Can Apply: Scholarship applicants must be enrolled in a program related to addiction or substance abuse counseling. They must also be members of the National Association for Addiction Professionals, have a 3.0 GPA, and have at least one full year remaining in their program.
Amount: $1,000 for undergraduate students; $2,000 for graduate students