Financial Aid
The best things in life don’t come cheap, and that statement could not be truer when it comes to college funding. According to a 2021 survey conducted by Sallie Mae, families spent an average of $26,373 to pay for the 2020-21 school year, with almost half of that amount coming from financial aid. With those kinds of numbers, It’ll be important to get as much money from financial aid as you can.
To start off, most financial aid falls into one of two categories: merit-based and need-based. With merit-based aid, the determining factor is whether or not you qualify based off of skill; most scholarships fall into this category, as you are awarded aid based on doing something well or writing an application or paper. With need-based aid, the determining factor takes a look at your financial situation and age, things that are not so much about your own ability but rather your circumstance; most grants fall in this category. Financial aid can also come from two different sources: federal or private. The federal portion covers any money coming from the government in any way, shape, or form. With private aid, this can be in the form of monetary gifts from friends and family, as well as specific situations from a privately owned company.
Whether need-based or merit-based, federal or private, financial aid typically comes in one of the following forms:
Grants – A grant is “free” money that doesn’t need to be paid back (except when you fail to live up to the terms of the grant, such as by leaving school). Grants can come from the federal or state government, schools, or private or nonprofit organizations. Most grants are need-based but merit-based grants are also available. Some examples include the Federal Pell Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG).
Scholarships – Like grants, scholarships are gifts and do not need to be repaid unless you don’t live up to the terms of the scholarship. Also like grants, scholarships can come from the federal or state government, universities, or private or nonprofit organizations. Scholarships tend to be merit-based, though there are also scholarships that are need-based or that take both merits and need into consideration. Some scholarships are aimed at specific groups, such as women, minorities, and students from military families.
Work-Study/Non-Work Study – Work-study typically refers to federal work-study, a program that provides part-time work on or off-campus while you are enrolled in school. Federal work-study is only available to you if you have demonstrated financial need. Qualifying does not guarantee you a job. You will need to apply, interview, and be hired. With non-work study, they are not government-sponsored.
Student Loans – With federal loans, your loan contract may include terms and conditions that are not available with most private loans (e.g. fixed income rates). If you go with a private student loan, you are dealing directly with a bank, credit union, or other state-based organization. These loans include terms and conditions set by the lender and are generally (though not always) more expensive than federal student loans. Unlike most federal loans, private loan rates are based on your credit score and lenders may offer you a variable interest rate (instead of a fixed one). You may be required to begin paying back your private loan while still in school. Federal loans allow you to wait until you leave school or graduate.
With all of these options for paying for school, think about which ones would work best for you, and remember to look for all available opportunities of your preferred type of aid by searching on Google or asking your nearby resources for more information.
