How Qualifying For Financial Aid Works

Qualifying For Student Loans and Work-study Programs

Loans and work/study programs are slightly different than grants and scholarships.
Loans and work/study programs are slightly different than grants and scholarships.
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Unlike grants and scholarships, loans must be repaid. If you're ineligible or need additional aid beyond grants and scholarships, federal student loans are the way to go. In order to apply for federal loans, you'll need to fill out the Federal Application for Student Aid (FAFSA). Types of federal loans include:

  • Stafford Loans: Undergraduate, graduate or professional degree students who are enrolled at least part time may be eligible for Stafford loans. Stafford loans are available through banks, credit unions and, in the case of "direct" Stafford loans, the U.S. Department of Education. Subsidized Stafford Loans are given to students with financial need. The interest that accrues on these loans is subsidized while you're in school and for a short period of time after graduation. Unsubsidized Stafford Loans don't require financial need. You can defer payment on the interest that accrues while you're in school; however, once you graduate, you'll need to repay both interest and principle in full.
  • Perkins Loans: Participating schools have the discretion to loan undergraduate and graduate students funds based on financial need. Talk to your financial aid advisor to see if you might qualify.
  • PLUS Loans: These are awarded to parents of dependent undergraduates, graduate students and professional degree students with good credit. Banks and other credit institutions offer PLUS loans. The maximum amount of the loan is equal to the cost of attendance (COA) at your school less the amount of other aid you receive [Source: Department of Education].

The Department of Education's guide, "Funding Education Beyond High School," offers a lot of information about federal loans.

Students who demonstrate financial need and meet the general eligibility requirements outlined in the second section of this article may qualify for the Federal Work-Study (FSW) Program. The FSW Program provides jobs to undergraduate and graduate students who are enrolled at least part time. Unless you request that your wages apply directly toward your educational expenses, your school will pay you directly, and you can use the income at your discretion. Generally, you'll work for your school, a nonprofit or a public agency. Community service and work related to your field of study is encouraged.

Still have questions about how to qualify for financial aid? We wrap things up and answer a few more questions in the next section.