Financial aid is any type of assistance used to pay college costs that is based on financial need. Some of it may be in the form of a gift, some of it must be worked for and some types must be repaid. In any case, financial aid is intended to help college-bound students cover the costs of a higher education. Here are the primary types of financial aid:
- Scholarships are generally based on merit and do not have to be repaid. They are often awarded for academic achievement, special abilities or talents. Scholarships come from a variety of sources, including colleges, companies, churches and charities. Students can receive more than one scholarship.
- Grants are awards based strictly on financial need and do not have to be repaid. Grants are available from state and federal agencies, individual colleges, private institutions and foundations. Students can receive more than one grant.
- Educational loans are the most common form of financial aid and usually based on financial need. These low-interest loans are sponsored by the federal government and must be repaid after graduation. Generally repayment begins 6 to 9 months after leaving school and the repayment period is long (typically 10 years) to keep the monthly payment affordable.
- College Work-Study is a government-sponsored program that provides part-time employment for financially needy students to help meet educational expenses. Work-study aid helps students pay for education costs such as books, supplies and personal expenses while gaining work experience on their campus or the community.