Types of Aid: Dollars for College
Kay Peterson, Ph.D., FastWeb
With college costs rising, most students need help paying for higher education. And most will rely on more than one source to cover costs. Learn how to put together the pieces of your financial aid package.
Grants and Scholarships: This is free money that doesn’t have to be repaid.
Grants are awards based on financial need or funds distributed to support a specific project (e.g. research grants).
• Federally-sponsored grants include the Pell Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG). Both are based solely on financial need.
To apply for federally sponsored grants, fill out a FAFSA (Free Application for Federal Student Aid) as soon after January 1 as possible.
To learn more about federal aid, consult the U.S. Department of Education’s FAFSA Web site: http://www.fafsa.ed.gov/.
• Scholarships are short-term or lump-sum awards that are distributed according to criteria set by the scholarship provider (financial need, academic or civic distinction, hobbies, etc.).
Since criteria vary, be sure to check application requirements before you apply.
Scholarships are often provided by private sources, such as schools, companies and organizations.
Find scholarship opportunities that are right for you by using
In work-study, you earn your financial aid by working either on or off campus. It’s a great way to earn money for college while gaining valuable work experience.
Work-study assistance may be provided by private sources, through the school or as part of the Federal Work-Study program.
Loans: These are funds that must be repaid either by students or their families.
Federal government loan programs include:
• Student Loans:
1. Stafford Loan: administered either by the Federal Direct Student Loan Program (FDSLP) (in which funds are provided directly by the federal government) or by the Federal Family Education Loan Program (FFELP) (in which funds are provided by private lenders, such as banks, credit unions and savings & loan associations).
2. Perkins Loan: for undergraduate and graduate students with exceptional financial need. This is a campus-based loan program, with the school acting as the lender using a limited pool of funds provided by the federal government.
3. Parent Loans: the federal Parent Loan for Undergraduate Students (PLUS) lets parents borrow money to cover any costs not already covered by the student’s financial aid package.
To learn more about federal loans, read the federal government’s Student Guide for federal aid at http://studentaid.ed.gov.
• Private Loans:
Private loans supplement aid provided by the federal government. Since they are offered by private lenders, there are no federal forms to complete.
Alternate Financial Aid Programs
• National Service: Volunteering not only helps the disadvantaged, it can provide money for your college education. The Corporation for National Service offers a number of opportunities for funding in exchange for community service.
• Tuition Payment Plans: Many schools offer short-term installment plans that split your tuition into equal monthly payments. Many such plans are essentially interest free, but some have fees or finance charges. Learn more about these plans on FinAid.org.
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• Employer Support: Many companies recognize the value of investing in an employee’s educational development. Ask your employer about tuition reimbursement programs.
• Benefits for Military Service: The military offers a number of tuition assistance programs, including ROTC, Army/Navy/Marine Corps College Funds and U.S. Service Academies.
• Tax Credit: The HOPE Scholarship Credit and The Lifetime Learning Credit establish a tax credit for higher education.