There are main types of financial aid for college students including grants, scholarships, loans, and work-study funds. Students have the ability to pursue one or more of these options to help cover the cost of their education.
The first type of financial aid is grants, which are a type of financial aid that does not have to be repaid. They are usually offered by the federal and state government, as well as by some colleges. Grants can be merit-based, need-based or student-specific. The federal government offers the following grants:
- Pell Grants– These grants are awarded to undergraduate students and the amount of aid you receive depends on your financial need, the school’s cost of attendance, and other factors.
- Federal Supplemental Educational Opportunity Grants (FSEOG)– These are grants for undergraduate students with a high degree of financial need.
- Teacher Education Assistance for College and Higher Education (TEACH) Grants– TEACH grants can help you pay for school if you plan to become a teacher and teach in high-need fields in low-income areas.
- Iraq and Afghanistan Service Grants– Iraq and Afghanistan service grants provide money to students whose parent or guardian died during military service in Iraq or Afghanistan.
Scholarships are another type of financial aid that does not need to be paid back. They are offered by individual institutions and private organizations and are awarded based on factors such as academic performance, athletic ability, religious affiliation, and race. Most scholarships involve an application process, including writing an essay or completing a project.
Loans can come from either the federal government or private institutions. Students must repay their loans with interest upon graduation. The two main types of federal loans available for college students include:
- Subsidized Loans– These loans are available for students who can prove financial need. They have better interest rates than unsubsidized student loans, because the US Department of Education pays the interest while students attend school and for a six month grace period after graduation.
- Unsubsidized Loans– Unsubsidized loans are available to students regardless of financial need. Students are responsible for repaying interest during all periods.
An additional type of loan is the private loans, which are supported by private banks to help meet the students cost of education that has not been covered by another form of financial aid. Eligibility for these loans depends upon credit scores, and have higher interest rates.
The final option is to pursue a work-study program where students earn money to pay for school by completing a federally funded job on campus or at an approved location. The campus facilities at many colleges and universities, including the student center, career center, athletic department, and residence halls, employ work-study students.