How Financial Aid Works: A Comprehensive Guide

Financial aid can be helpful when you are pursuing your education and planning to achieve your dream.

Financial aid is helpful for students or parents, so it’s important to gather all information about it, and how financial aid works. Need to determine eligibility and apply on time for student financial aid.

In this blog post, we going to discuss the ins and outs of financial aid with some financial aid-related faqs.

What is Financial Aid?

Financial aid refers to monetary assistance provided to students and their families to help them to pay for college. It can be in the form of, such as grants, scholarships, work-study programs, and loans. Each type of aid has its own eligibility criteria and requirements.

Students or parents can avail of this on a need basis. Around 33% of the students get financial aid. Students need to feel out the Free Application for Federal Student Aid form(FAFSA) form.

Types of Financial Aid

1. Grants

Grants are typically need-based and do not require repayment. The college used FAFSA data to choose the right candidate to provide financial aid for college. Many colleges offer their own financial aide and used FAFSA data.

The most well-known grant is the Federal Pell Grant. Other examples include the Federal Supplemental Educational Opportunity Grant (FSEOG) and state-specific grants.

Type of Grants:

• Federal Pell Grants
• Federal Supplemental Educational Opportunity Grants (FSEOG)
• Iraq and Afghanistan Service Grants
• Teacher Education Assistance for College and Higher Education (TEACH) Grants

2. Scholarships

Scholarships are basically gifts to the students and are not required to be repaid. There are many organizations that are paying scholarships like schools, companies, individuals, and NGOs.

Mostly the scholarships are merit-based, and students need to meet certain criteria set by the scholarship provider to get students financial aid. Some are based on academics, some are based on financial status, and some require a combination of both. There are certain scholarships that are for specific groups like women, and military family members.

Few scholarships pay entire fees and few awards with some amount or other means like study materials, and gadgets.

For more refer to: How to find Scholarships?

3. Work-Study Programs

Few companies provide scholarships to students while engaging them in company work. Students get part-time jobs in the company and get the salary to pay their fees or some amount of fees. This is a good approach for students to get real-life work experience as well.

Graduates, undergraduates, and professional students can apply for this.

4. Loans

Student loans are borrowed funds that must be repaid with interest. Student loans can be borrowed from government organizations or trusted private lenders.

This is advised to read the terms and conditions carefully while borrowing the loan. Types of federal students loans:

• Direct subsidized loan
• direct unsubsidized loan
• direct plus loan
• direct consolidation loan

People also read: Direct Subsidized Loan vs. Direct Unsubsidized Loan: Understanding the Differences

How to Apply for Financial Aid

To apply for financial aid you need to fill out the Free Application for Federal Student Aid (FAFSA) application form. Fill FAFSA form as soon as it opens.

Guide to fill the FAFSA form:

Create an account: This helps to sign the docs electronically. Applying online helps you to avoid mistakes and delays in the process. After creating the FAFSA account note down the FAFSA financial aid login username and password.

Be ready with the required documents: SSN number, Parents’ SSN numbers, Driving Licence(Not Mandatory), Alien Registration Number(For Non-US candidates), tax documents, and a few more. Read more.

FAQs – Financial Aid FAQs