If you haven't already applied for federal and/or state financial aid for the 2011-2012 academic year, you're already falling behind on the process and risk missing out on funds for which you could be eligible.

There are three general forms of financial aid: grants, loans and employment opportunities that qualify as work/study programs.

Grants are great because they are financial awards that don't have to be repaid. There are six federal education grants and students may be eligible to receive many of them.

The type of grant and the amount of grant money students may receive is based on several factors which include financial need, cost of attendance at your selected institution, whether the student will attend college full-time or part-time, the type of academic program the student will pursue and how early a student applied for financial aid. Additional grant funding through Illinois' Monetary Assistance Program (MAP) is also available for those who qualify.

There are two main types of federal student loans: direct subsidized loan and the direct unsubsidized loan. The subsidized loan is available to students who meet financial need guidelines. No interest on the loan is charged while the student is enrolled in college at least half-time and through select other time periods.

Students are not required to meet financial need guidelines to qualify for the direct unsubsidized loan. However, interest starts accruing on the loan immediately. Additionally, some students may be eligible to obtain both subsidized and unsubsidized loans.

No credit check is required to apply for either loan.

For students who don't qualify for need based financial aid, the federal government offers their parents the opportunity to borrow money to cover educational expenses through the Direct PLUS loan program.

Other sources of financial aid are called campus-based aid programs. These include additional grants, loans and the work-study program and are only available to students that demonstrate financial need. These programs are administered at each participating institution and funds are limited. Therefore, the sooner an eligible student applies for the aid, the better their chances of obtaining full funding.

The only way to apply for financial aid is through the Free Application for Federal Student Aid (FAFSA). After a student submits their FAFSA form, they will receive their Student Aid Report (SAR) either in the mail or through email. The SAR will explain the types of awards for which the student is eligible.

Once students have received their SAR, they should contact the financial aid office at the institution they plan to attend to discuss any further aid that they may be eligible to receive through the college or other sources.

In order to complete the FAFSA, dependent applicants will need to utilize their parent's tax information. Many tax preparation locations offer FAFSA application assistance.  Therefore, it is recommended that parents complete the FAFSA forms at the same time that they complete their income tax filings.

Due to the high unemployment rates and the effects of the recession, it is probable that more college-bound students will apply for financial aid this year than any other recent time. Therefore, I cannot stress enough that the best way to ensure opportunities for higher financial aid awards is to apply as soon as possible.

Now would be a good time to begin. Click the following link to get started: http://www.fafsa.ed.gov .