There are 4 types of financial aid available to help cover the costs of college. Some you have to pay back, others not. We go into more detail about each type below:
- Scholarships – This is free money that doesn’t need to be paid back. It’s awarded based on academic achievement, talent, or a particular area of study. Most scholarships go towards tuition only (and are sent directly to the college), while others are paid directly to you and you can use to cover any of your college expenses (i.e. housing, books, etc.). There are many different sources of scholarships, from donors at the college, to nonprofits, to clubs and other social organizations, to businesses and other private groups.
- Grants – This is free money that doesn’t need to be repaid. Grants are typically federally-funded and you are matched by completing your FAFSA (Free Application for Federal Student Aid). For example, a common federal grant rural students receive is a Pell Grant.
- Loans – This is money you borrow and need to pay back. Loans can be private – a local bank – or federal. Generally loans are subject to interest and most start charging interest once you have graduated from college. You’ll want to carefully check the terms of the loan to make sure you are able to successfully repay it.
- Work-Study Jobs – This is a federal program which allows you to earn money to pay for school by working part-time. You earn at least the current federal minimum wage, but might earn more depending on the type of work you do and the skills required. Your work-study award depends on: when you apply, your level of financial need, and your college’s funding level.