|Basic Financial Aid Terminology
The cost of post-secondary education has been rising over the last few years. It is currently at a point where it would be impossible for the majority of individuals to attend college unless financial aid was made available. As a result it is very important that the basic concepts of financial aid are understood and ultimately utilized so that your education may be affordable.
Below you will find some of the basic terms used when discussing financial aid and the corresponding definitions.
Federal Financial Aid: As the name implies, this type of financial aid comes from the Federal Government. There are essentially three main types of Federal Financial Aid. These come in the form of Grants, Loans, and Work Study.
Federal Grants: Generally speaking grants are especially important because once awarded they do not need to be repaid. Federal Grant programs include Pell Grants, Federal Supplemental Educational Opportunity Grants, Academic Competiveness Grants, and the National Science and Mathematics Access to Retain Talent Grant. Each grant type has different eligibility and award criteria. Be sure to speak to your financial aid advisor at your college to see if you may qualify for any of the above grants.
Federal Loans: Loans are the opposite of grants. By this we mean that unlike grants, once awarded, loans do have to be repaid. The actual repayment criteria may vary depending on the loan type. Federal Loan programs include Perkins loans, Stafford loans, Direct loans, Federal Family Education loans, and Direct Plus loans. Again, each type of loan has its specific eligibility and award criteria. At first glance, understanding federal loans and their criteria seem daunting. But you must remember that financial aid counselors are there to help. Make an appointment with them and let them explain to you the various options that are available. Financial aid counselors are very knowledgeable in the entire process and will help you. They will be able to tell you which programs you qualify for without getting you stuck in the details.
Private/Alternate Loans: These are loans that typically come from sources other than the Federal Government. These are often used to supplement federal financial aid packages so that students can cover the cost of their education. Stated differently, these loans are used only when other sources of financial aid have been exhausted.
Institutional Grants: These are otherwise known as merit awards or merit scholarships which individual colleges can provide. They can be awarded for academic achievement, financial need, as well as a host of other criteria. You will need to find out about these types of grants from the college of your choice. Just as with other grants, these would NOT need to be repaid.
Scholarships: Scholarships, like grants, do NOT require repayment. They are a form of funds that are available from numerous sources including companies and many organizations. In addition, scholarships can be found in each specific school. Scholarships can be based on a variety of criteria such as academic performance, athletic prowess, financial need, minority status, various community affiliations, and religious affiliation.
Work Study: This refers to government funded programs that cover payments made to students for specific jobs on college campuses and/or not-for-profit organizations. These funds are traditionally reserved for those who demonstrate financial need. Essentially students who receive Work Study as part of their financial aid package, obtain work for a limited number of hours during the week and receive a paycheck. Most Work Study jobs pay minimum wage or a little more. The big advantage with this program is the flexibility of working around classes without having to leave the college campus.
Tuition Assistance: This refers to tuition benefits that are offered by some companies as part of their employee benefits package. Typically this type of funding can be used only for programs that would benefit the company. Eligibility for Tuition Assistance programs vary from company to company. Information regarding your employer’s Tuition Assistance program should be readily available from the Human Resources department.