Different types of financial aid that you can get (Get Accepted to Your Dream University)
Different Types of financial aid
|SOURCE OF AID||TYPES OF AID||DEGREE LEVEL||BENEFITS|
|Federal Aid||Grants, Loans, Work-study||Undergraduate, graduate, professional||Lower interest rates, flexible repayment terms|
|State Aid||Grants, Scholarships, Work-study funds, State loans, Tuition assistance||Undergraduate, Graduate||May ease the cost of attending a state school|
|Institutional Aid||Usually grants||Undergraduate, graduate||Grants awarded based on merit or financial need don’t have to be repaid|
|Private||Private student loans or private scholarships||Undergraduate, graduate, professional||Scholarships don’t have to be repaid and private loans have variable APR, cosigner options, and allow you to build credit|
|Personal or Family Savings||Personal savings, or help from family or friends||Undergraduate, graduate, professional||Often, these are gifts that you don’t have to pay back, or at least without interest|
Financial aid is money to help pay for college or career school. Grants, work-study, loans, and scholarships help make college or career school affordable.
The largest and most popular Federal student aid programs are:
Federal Pell Grants. These are need-based grants that were given to just under 3.8 million students for school year 1998-99.
Federal Direct and FFEL Stafford Loans.
Federal Campus-based Programs.
Types of financial aid students can pursue to help cover the costs of tuition and higher education.
- Federal Aid
- Private Student Loans
- State Aid
- Work Study Programs
- Employer Tuition Assistance
- College / University Assistance
What is financial aid?
I like to say that financial aid is four things from four places. The four things include scholarships, grants, loans, and employment.
How to get financial aid for college?
You’ll need to complete the FAFSA, Free Application for Federal Student Aid, which could qualify you for grants, work-study, student loans, and some scholarships.
First, let’s talk about scholarships. Start looking for them in the Spring of your junior year, and apply for them throughout your senior year.
Many colleges award scholarships, so ask about the application process. To look for local or Nebraska-based scholarships, check with your school counselor. While there, you’ll also find a list of national sites we recommend. If you receive offers for Scholarship services, research them carefully if a fee is involved.
How do you qualify for Scholarships?
Scholarships can be based on criteria such as academics, talents, leadership, athletics, and financial need. Grants are often called “gift” aid because they are not repaid. To qualify, you must show financial need.
The federal government provides the Pell Grant and SEOG, Nebraska has a state grant, and some colleges award their own grants. Also based on financial need, work-study is a college-based job where you earn money to help pay expenses.
A Direct Loan for Students is money you borrow directly from the federal government and must repay after you’re done with college. All students are eligible to borrow a direct loan, but there is a limit on how much you can borrow each year.
For example, freshmen can borrow up to $5,500. If you show financial need, you will qualify for a Direct Subsidized Loan, and the government will pay the interest while you’re in school. If not, you can borrow a Direct Unsubsidized Loan, and you are responsible for all accrued interest.
Repayment begins 6 months after you graduate or drop below half-time status. Your parent can borrow a Direct PLUS Loan to help pay college expenses. The college determines how much your parent can borrow. Repayment begins 60 days after the loan is fully disbursed.
The four places are institutional aid, federal, state, and private aid.
The job of a good financial aid administrator is to partner with you, the student, to make sure you are getting the most out of the four things from the four places. There is no single solution. So a financial aid officer will help you come up with the right blend.
Both you and the financial aid office need to work together. A scholarship is an award of money given to the student or the university on behalf of the student to assist with educational costs.
Think of it this way. The college or an external organization values something about you and is willing to help you reach your higher education goals. Usually, you do not need to repay the money in a scholarship, but many have specific requirements to maintain them.
Scholarships can include academic, talent, athletic, and performance scholarships, while grants, another financial reward that you do not need to repay, are typically need-based and made on some kind of review of your financial situation. It also could be a combination of both.
For example, a need-based grant might be available to you, but eligibility for it includes a specific minimum GPA. A Pell Grant is money the federal government provides to students. These do not have to be repaid, and eligible students receive a specified amount each year, based on the results of the federal aid application.
FSEOG is another federal grant that some colleges can provide to Pell Grant recipients. Not all colleges have FSEOG to award. The school should automatically award is based on their application deadlines and your Pell Grant eligibility. Another type of financial aid is loans. Loans for college education costs can be federal and non-federal.
We will talk a little more in-depth about non-federal grants and loans later. Federal student loans are provided by the government. They have some limits, but typically, these loans have lower interest rates than commercial loans. If you find yourself in need of a loan for college, we recommend that you look for eligible federal loans first. You’ll pay less interest in the long run.
For now, I want to focus on federal loans of which there are two main types, Stafford loans, and PLUS loans. Stafford loans are also called subsidized and unsubsidized loans. The amount of these loans is determined by your school each year. The amount you can borrow is based on your year in school.
As you get further along towards graduation, federal regulations let you borrow more on an annual basis. PLUS loans are federal loans that graduate or professional students and parents of dependent undergraduate students can use to help pay for college or career school.
Note, undergraduates who are veterans are not likely to be eligible for this loan, as veterans are usually considered independent students. I encourage you to do a cost-benefit analysis when considering taking out a loan. This is about what works for you. Each student considering an education loan needs to determine if the long-term costs of repaying the loan are worth it when considering the benefits of the education you will receive.
Certainly, taking out education loans is a big responsibility, and if they can be avoided, that is generally a good choice. Most loans do not require that you make payments while you are in school. Some, in fact, are interest-free while in school.
The good news is that most interest rates are comparable to other commercial interest rates. Finally, there is employment or work-study programs. There is a federal work-study program, which allows you to work on campus, typically from 5 to 20 hours a week.
Some states have state-based programs, and some colleges might have institutional-based work-study. So check out that possibility.
Work-study can be a great way to receive additional funds for school-related costs through the paycheck work-study recipients receive when they work. A work-study job can often be related to your academic interests, and for veterans, the results of the VA work-study program.
Different types of financial aid that help pay for College or Career
Personal finance skills have the most significant impact on an individual’s?
- Quality of life(Ans)
- Number of dependents