There are many types of financial aid available to help you pay for college. As you prepare for a new school year, it's important to understand all of the financial aid options available to you.
There are three types of financial aid—free money, like a grant or scholarship, work-study, and loans, money that you receive now to pay for your education and are expected to repay with interest after you graduate. Before you accept any financial aid, you'll want to know how it will affect you down the road.
Grants
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Where does the money come from?
The federal government, state government, your institution, or a private organization.
Who is eligible?
Many federal and state grants are need-based awards—meaning, more grants are awarded to students with lower incomes. Grants offered by your school or another private organization may have different eligibility requirements.
How do I get one?
To receive a government grant you need to complete a Free Application for Federal Student Aid (FAFSA). Talk to your financial aid office for information on grants offered by your school or private organizations.
Scholarships can be need-based, like grants, or merit-based, meaning the criteria to apply is based on academic achievement, athletic performance, or your background. Eligibility can vary greatly between scholarships.
How do I get one?
Talk to an advisor at your school to learn about scholarships that may be available. There are also many websites that allow you to search for private scholarships that you qualify for. Applying for a scholarship should cost you nothing but the time it takes you to apply.
What happens after graduation?
Nothing! Like grants, scholarships do not need to be repaid.
You are paid by the federal government and the school for work you do on campus.
Who is eligible?
To determine if you're eligible for work study, fill out a FAFSA.
How do I get one?
If you have been offered work study, look on campus to find a job that accepts work study. Talk to your advisor to learn where these jobs are posted at your school.
Many students are eligible for federal student loans. The exact amount you will receive depends on your (or your family's) annual income and the cost of the school you are attending. Note that not all schools participate in the federal student loan program.
How do I get one?
Complete the FAFSA.
What happens after graduation?
You will need to repay the amount you borrowed from the government to pay for your college education—with interest.
Banks, credit unions, and various types of lenders.
Who is eligible?
Eligibility requirements vary by lender.
How do I get one?
To get a private loan, you have to fill out an application with the lender. Unlike most federal student loans, private student loans may take your credit score into consideration when choosing how much to lend you and on what repayment terms. You may need a cosigner to get a private student loan. A cosigner must repay the loan if you fail to do so.
What happens after graduation?
You will need to repay the amount you borrowed from the government—with interest. You might even be required to begin making monthly payments while you're still in school. Make sure you know when you are expected to begin repaying your private loan before taking it out.
Filling out the Free Application for Federal Student Aid (FAFSA) is one of the first steps you should take to get funding for college. It examines your annual income, or your family's, to determine how much funding you receive in the form of grants, work-study, or federal loans.
Before completing the FAFSA, you need to have tax information for yourself, and possibly your parent(s), for the previous year. For more information on preparing to fill out your FAFSA, visit Federal Student Aid's website.
What Happens Next?
After you fill out your FAFSA, the U.S. Department of Education will send you a Student Aid Report (SAR). This report includes information about what you and your family are expected to contribute to your education expenses. Look over your SAR carefully to ensure there were no mistakes on your FAFSA. If you notice a mistake, Federal Student Aid has instructions on how to correct any errors.
Your school reviews your SAR, and sends you a financial aid award package. This includes information about different scholarships, grants, work study, and federal loans you're eligible for in the upcoming year. Review your award package carefully before accepting any aid to be sure you understand how each type of aid would impact you later on. Contact your financial aid office with any questions you have.
For More Information
The financial aid office at your school is one of your best resources for information about paying for college. They can also help you fill out your FAFSA and find reputable scholarship search engines online. To find out more about funding your education, check out these videos.
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