Affording an Education: A Guide To Your Financial Aid Options

With billions of dollars available annually for students to pay for their education, most college students utilize at least one type of financial aid. Financial aid options come from federal and state governments, individual colleges, or private organizations, and is available in the following forms.
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With billions of dollars available annually for students to pay for their education, most college students utilize at least one type of financial aid. Financial aid options come from federal and state governments, individual colleges, or private organizations, and is available in the following forms:

1. Grants

Grants can be considered as “free money”; they consist of money that does not need to be paid back to the provider. Some colleges will award grant money based on merit, while others award it based solely on financial need. Grants can also be awarded by federal and state governments.

How to apply: To get grants from private organizations, seek application forms online. For government grants and some college’s aid, fill out the FAFSA. Many private college also require submission of the CSS Profile to determine aid qualification.

2. Work-Study

Work-study is a mechanism of trading educational funding for student work. Work-study is a federal program in which a student is employed at a job approved by the college, generally on-campus. The money the student earns goes towards tuition.

How to apply: Work-study eligibility is determined through the FAFSA.

3. Loans

Students can borrow money from lenders to go towards their education. Interest rates differ from loan to loan and person to person. So, it’s best to compare interest rates and benefits of each loan offer you personally receive. Though there are many types of loans, there are two umbrella sources: public student loans from the government, and private student loans from banks and private companies.

  • Federal Student Loans: Federal loans offer securities, such as some flexibility with deferment of loan and an interest cap. Students can apply by filling out the FAFSA.
  • Private Student Loans: Private student loan could cover up to the entire cost of a student’s college cost, and then some. Some students use private loans to cover any extra expenses and living costs while at college, such as buying a computer or textbooks. Private loans can come with either fixed or variable interest rates. Private loan eligibility is determined by the lender. Application processes will differ from lender to lender, but instructions can be found on a lender’s website.

Financial aid is not one-size-fits-all. All students should fill out the FAFSA, and proactively seek out financial aid options based on their own qualifications. For private loans, students should compare interest rates and payback plans to understand all of their financial aid options.

To compare interest rates and find the right private student loan for you, visit Credible.

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