Anyone who’s considering heading to college needs to understand the basics of student loans. Federal financial aid is a great way to help pay for school, but there are a lot of things you need to know before you can start borrowing money. In this post, we’ll go over the different types of federal financial aid available, as well as some important requirements and considerations. If you’re thinking about enrolling in a degree or certification program, we provide a guide on everything you need to know about student loans!

 

What Are The Types Of Financial Aid?

There are four main types of financial aid: grants, loans, work-study, and scholarships. Grants are need-based, meaning they are awarded based on your financial need. Loans must be repaid with interest. Work-study is a form of financial aid that provides you with a part-time job to help pay for your education. Scholarships are usually merit-based, meaning they are awarded based on your academic or athletic achievements.

 

Grants

Grants are typically need-based, meaning they are awarded based on your financial need. The most common type of grant is the Federal Pell Grant, which is available to undergraduate students who have not yet earned a bachelor’s degree.

Other types of grants include the Federal Supplemental Educational Opportunity Grant (FSEOG), which is also awarded to undergraduate students with financial needs. Another grant option is the Teacher Education Assistance for College and Higher Education (TEACH) Grant, which is awarded to students who plan to become teachers.

 

Loans

Loans must be repaid with interest. The most common type of loan is the Federal Stafford Loan, which is available to both undergraduate and graduate students. Other types of loans include the Federal Perkins Loan, which is available to undergraduate and graduate students with exceptional financial needs, and the Federal PLUS Loan, which is available to parents and graduate students.

 

Work-Study

Work-study is a form of financial aid that provides you with a part-time job to help pay for your education. Work-study jobs are typically on campus, and the hours are flexible to accommodate your class schedule.

 

Scholarships

Scholarships are usually merit-based, meaning they are awarded based on your academic or athletic achievements. Scholarships can also be need-based, meaning they are awarded based on your financial need. Some scholarships are awarded by the federal government, while others are awarded by state governments, private organizations, or colleges and universities.

 

How Is Financial Aid Awarded?

Most financial aid is awarded based on financial need. The first step in the process is to fill out a Free Application for Federal Student Aid (FAFSA). This form will ask for information about your family’s finances, including income, assets, and expenses.

 

The FAFSA is used to calculate your Expected Family Contribution (EFC), which is the amount that your family is expected to contribute to your education. Your EFC is then used to determine your eligibility for financial aid.

 

Financial aid can come from a variety of sources, including the federal government, state governments, colleges and universities, private organizations, and individuals. The best way to avoid having to borrow money for college is to start saving early.

 

If you are already in college, there are still things you can do to reduce your costs, such as living off-campus or taking advantage of tuition reimbursement programs offered by your employer. No matter how you pay for college, remember that education is an investment in your future. You can make sure that you get the most out of your investment by planning and making smart choices.

 

Major Issues With Financial Aid

One of the major issues with financial aid is that it can be very difficult to qualify for. In order to qualify for most financial aid, students must have a certain GPA, and oftentimes, students who need the money the most are the ones who don’t qualify. Another issue with financial aid is that it often doesn’t cover the entire cost of tuition and other associated expenses. This can leave students with a significant amount of debt after they graduate. Financial aid can be very complex and confusing, which can make it difficult for students to understand and navigate.