People throw around the term “financial aid” as if it’s all one package deal. By now, you’re well aware that when it comes to the college admissions process, nothing is that simple!
Don’t worry, though. We’ve got you covered. In this post, we outline the various different kinds of financial aid to help you understand what they are, how they differ, and how they might work for you.
External Scholarships and Grants
The fundamental difference between grants and scholarships is that grants are usually based on need, while scholarships may be based on merit, need, or a combination. Unlike loans, however, you do not need to repay scholarships or grants. Of course, this makes them a better option than loans if you can manage to get them! There are various tools out there that make your life easier by compiling lists of scholarships and grants.
The federal government also provides grants (such as the Pell Grant). This is a great place to start the process of funding your years in college. The first step toward getting government financial aid is filling out the FAFSA, so don’t delay on that!
School Scholarships and Grants
The best-case scenario you can hope for from your school is a full-ride scholarship. Unlike many other forms of financial aid, these are typically entirely based on merit, not need. This means that even if you can afford to go to college without one, you may qualify for a full-ride scholarship based on the college’s assessment of your merit. Best of all, a full-ride scholarship covers costs outside of just tuition, such as books, room and board, and so on. (A full-tuition scholarship, while still wonderful, doesn’t cover these extras.)
Many colleges also give grants. These are typically need-based rather than merit-based, and do not generally cover the entirety of tuition -- much less the extras included in a full-ride scholarship.
Example: let’s say tuition is $8,000 per semester. The school calculates that a typical student’s total expenses (including tuition) are $15,000 per semester. A full-ride scholarship would cover the full $15,000 per semester. A full-tuition scholarship would cover the $8,000 per semester tuition charges. A grant may cover $3,000 to help with tuition.
If your scholarships, grants, personal contributions, and family contributions don’t cover the full cost of attending college, you may be offered a part-time work-study position. This means you would be working a job -- often, but not always, on campus -- and earning money to help cover your expenses while you are in college.
These positions are generally intended to give you extra funds to cover day-to-day living expenses; they aren’t typically used to cover tuition, for example. While you have the option of taking a job that isn’t work-study, doing so may affect your other financial aid, depending on how much you earn. This isn’t the case with work-study jobs.
Furthermore, traditional employers aren’t required to take your class schedule into account, but work-study employers are. This could potentially spare you a lot of scheduling headaches and hassle.
If you’re eligible for work-study, you’ll be informed of your eligibility and the amount you’re eligible to complete as part of your financial aid offer.
What all of the financial aid options we’ve explored so far have in common is that you don’t need to pay them back.
Student loans, of course, are different. They help you cover the cost of college and associated living expenses, but beginning a few months after you graduate, you need to begin paying them back. For this reason, grants, scholarships, and work-study positions are generally preferable.
One big factor to consider when weighing loans against work-study offers is whether the amount of work-study you would need to do would be enough to detract from the quality of your academic experience. That is, if you’re working too many hours a week during college, your education and grades may suffer. In this case, the future stress and hassle of taking out some loans may be worth the improvement in the quality of your education.