Financial aid has become a catch-all term to describe money that students use to pay their college or university in exchange for education and a potential degree. However, it's a little more complicated than that, and understanding the intricacies of financial aid can be important to many students trying to earn a degree. Whether you're a returning student or brand new to the higher education game, figuring out how to pay for college is a huge part of the process. The cost of attending school can be daunting. For many students, the price tag might be prohibitive if you're forced to foot the bill on your own. This is where financial aid comes in.
What types of financial aid are available?
: Students who receive grants to help them pay for college do not have to pay the money back, potentially making them one of the more desirable ways to help fund a college education. In order to qualify for most grants, you must fill out a Free Application for Federal Student Aid (FAFSA). The information in your FAFSA helps the federal government to calculate your Expected Family Contribution (EFC) and decide how much aid you, as the student, should receive. The Pell Grant, which is offered based on one's financial need, is an example of a well-known federal grant. Individual states, colleges and universities may also offer grants. Check out our Ultimate Guide to Grants for more information.
: Scholarships are another form of aid that students don't need to pay back. Companies, organizations, various levels of government and individual colleges and universities all offer scholarships. Scholarships are typically merit-based and can be awarded based on a number of factors, such as your GPA, potential major, community service or athletic prowess. For more information, please visit our Ultimate Guide to Scholarships page.
: Students who qualify for work-study are typically assigned part-time employment on the school campus or off-site with an employer. The Federal Work-Study Program typically aims to provide you with a job related to your field of study. While students who participate in work-study programs are often campus-based rather than online students, you should check with your school of choice to find out its program restrictions.
: Unlike the other types of financial aid listed, loans must be paid back with interest. The government may forgive some portion of outstanding federal loans for certain individuals, such as new borrowers who teach full-time at a low-income elementary or secondary school. Keep in mind that a student's repayment options and interest rates will depend on the type of loan they take out (e.g., subsidized or unsubsidized loans). If you would like to learn more about your loan options, review our Ultimate Guides to Loans page.
As you can see, there's a lot to know about financial aid. Proper research to understand your options is an important first step to learn how much funding is out there and how much of it you may qualify for. Be sure to read all of our Ultimate Guides for additional information about your financial aid options.
1. FAFSA: Apply for Aid, Federal Student Aid, https://studentaid.ed.gov/fafsa
2. Federal Pell Grants, Federal Student Aid, https://studentaid.ed.gov/types/grants-scholarships/pell
3. Finding and Applying to Scholarships, Federal Student Aid, https://studentaid.ed.gov/types/grants-scholarships/finding-scholarships
4. Forgiveness, Cancellation, and Discharge, Federal Student Aid, U.S. Department of Education, https://studentaid.ed.gov/repay-loans/forgiveness-cancellation
5. Grants and Scholarships, Federal Student Aid, https://studentaid.ed.gov/types/grants-scholarships
6. Loans, Federal Student Aid, U.S. Department of Education, https://studentaid.ed.gov/types/loans
7. Types of Aid, Federal Student Aid, https://studentaid.ed.gov/types
8. Work-Study Jobs, Federal Student Aid, U.S. Department of Education, https://studentaid.ed.gov/types/work-study#are-jobs-on-campus