Financial Aid College (Types of Financial Aid for College)
If you are getting ready to start a college program you will more than likely need some form of financial aid to assist in paying the cost of your education. Roughly ¾ of all students need some type of financial aid college program. The number of students in need of financial aid increases nearly every year because the cost of tuition and fees rises. There are a number of financial aid college programs available and you need to know how each one works and benefits you in pursuit of your education.
Understanding Financial Aid
On a basic level, financial aid college programs are designed to help students who are in need of financial assistance to pay for school. Whether you have need defined by income level or simply qualify for the aid without strict necessity (like if your parents set up a college fund), there are a few different types of financial aid college programs. They are:
Gift Aid – these are grants and scholarships that are based on financial need and merit. These forms of aid do not need to be paid and are issued by federal, state and private organizations.
Work/Study – with this form of financial aid, the student takes an on-campus job that directs a portion of the earnings toward paying for the education. This does not need to be repaid because it comes from the earnings of the student.
Loans – the largest amount of financial aid college programs are in the form of loans. There are federal and private loans, each with their own benefits, which have to be repaid to the lender. Federal loan programs have need based loans that subsidize the interest which means the student does not have interest growing on the loans while enrolled in school. There are also non-need based loans from the federal government that accrue interest during the life of the loan. Either of these has an incredibly low interest rate and at least a ten year term. Private loans are credit based and have slightly higher interest rates. You may be able to get more money out of a private loan which means if you go to a college that has high tuition, you may be able to cover it with a single private loan.
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