Three main types of student financial aid are available. Scholarships, student loans and grants are available through state and federal government programs. Grants and scholarships are also available directly through schools or third-party private organizations.
Student loans are also funded by government and private sources. All three types of programs are commonly referred to under the umbrella term of “financial aid.” All three forms of assistance share the common goal of helping students pay for higher education. Some similar qualification requirements are also shared between all three program types. Numerous differences also exist between student-based scholarship, grant and loan programs.
Scholarships are funded by private and government-based sources alike. Many scholarships are funded directly through schools as well. A scholarship is a financial award, offered to students based on specific type of merit. For example, academic merit scholarships are available.
Scholarships based on outstanding athletic or societal achievements are also awarded. Certain organizations fund scholarships only to specific demographics of student applicants, including those in financial need.
Scholarship money typically does not require repayment. Stipulations might apply, however. Your application must be accurate and honest. You must use the money for its intended purpose. You will likely be required to attend school for the entire school-year during which your scholarship is funded.
Some programs require scholarship recipients to also maintain a minimum GPA. While many grant programs allow recipients more freedom regarding how they spend their money, most scholarship programs are less flexible. For example, you might be permitted to use your scholarship money to pay for tuition and school-related supplies but not living expenses.
While scholarships are primarily based on merit, EDU grants are typically based on specific needs. Awarded grant money is generally not subjected to repayment unless funds are abused or misused. Many grant recipients come from low-income households.
Certain grants are awarded to encourage students to become teachers. Others are awarded to U.S. military veterans and their qualified family members. Both scholarship and grant programs involve a competitive application process. Qualifying for a scholarship program often subjects you to a more competitive process, but not always. Obtaining grant funds from certain programs is also intensely competitive.
Grants for online classes and on-campus programs are available. Grant money is also more widely accepted by schools than scholarships. This is because scholarship programs are often proprietary to each school or region, whereas grant funds are more accepted nationwide. This is not always the case, however, so be certain to inquire about the grant programs your school accepts before applying.
Student loans require repayment. Student loans typically pay for more expenses than scholarships or grants, however. Both federal and private lenders offer student loan programs. Repayment of federal student loans begins post-graduation.
Repayment of private student loans often begins while you are still in school. Fortunately, options to restructure your student loan plan, refinance your APR or defer your interest payments are all available. Regardless of the type of financial aid you are pursuing, the process typically begins by filling out the Free Application for Financial Student Aid (FAFSA) form online.
