Type "financial aid" into any search engine and you'll return a dizzying number of results. You'll find tips, tricks, tools, financial calculators, offers of help in optimizing aid applications and more. This article summarizes the different types of financial aid and provides you with a handy reference guide on how to qualify for that aid.
The first step in qualifying for financial aid is simple: apply. Many students and parents talk themselves out of applying because they think they make too much money, or because there are blemishes on a high school record, or because they've applied before and been denied. If you don't apply, you are guaranteed not to receive aid.
Now that you're all fired up to apply, the next step is to decide which sort of financial aid will work best for you. There are several types of aid:
- Free Money -- Grants and Scholarships: Grants and scholarships are gifts of money and don't need to be repaid. Grants are generally based on financial need, while scholarships are available for just about any imaginable reason. Some are need-based; others, such as athletic, arts, and academic scholarships, are merit-based.
- Loans: Loans must be repaid. There are several types of federal student loans available including Stafford loans, PLUS loans and Perkins loans. Some of these loans subsidize interest while the student is enrolled; others require students to pay interest.
- Work-Study programs: Federal work-study programs provide jobs so that students can earn income to help offset educational costs [source: FAFSA].
Later in this article, we'll talk more about the different types of financial aid and how to qualify for each. First, let's explore the general eligibility requirements for federal aid.