Types of Financial Aid
There are many ways to get funding for your education; one of the most widely used resources is a federal or private loan.
The Federal Stafford Loan is the most common type of federal student financial aid loan, and it requires the completion of the Free Application for Federal Student Aid (FAFSA). There are two types of Federal Stafford Loans:
A subsidized Stafford Loan is awarded on the basis of need and the federal government pays interest on the loan while you are enrolled at least half-time (6 credits) and for one 6-month grace period after you graduate or fall below half-time enrollment.
An unsubsidized Stafford Loan is not based on need and allows some students to borrow additional money. Students are responsible for the interest on an unsubsidized loan. No payments are required on any Stafford Loan until 6 months after you leave school or fall below 6 credits. If possible, you may want to pay accrued interest on an unsubsidized loan while you are enrolled.
For more information on Federal Stafford Loans, click here.
Federal PLUS Loan
Parents and stepparents of dependent undergraduate students attending school at least half-time may take out a Parent Loan for Undergraduate Students (PLUS). This is an unsubsidized loan that is often lower in cost than a private loan because the federal government guarantees it. Loan approval is subject to credit criteria established by the U.S. Department of Education and your lender. A PLUS loan must be repaid. It is the responsibility of parents to make these payments.
For more information on Federal PLUS Loans, click here.
(NOTE: Depending on the school a Federal Perkins Loan may be available.)
Alternative Student Loans
Some students may need additional loan funds after maximizing their federal loan options or may not be eligible for federal loans and still need to borrow towards their education. Many lenders offer private alternative loans to help students meet the gap between financial aid and college costs.
Students must either meet the credit criteria of the loan for which they are applying or have a credit-eligible co-borrower. Many of these loans also require enrollment in six or more degree credits per semester, but there are options for students studying in non-degree classes or enrolled in less than half-time status.
A grant, unlike a loan, does not have to be repaid. The most common form is the Federal Pell Grant; it is awarded using FAFSA to determine eligibility and awarded to undergraduate students who have not earned a bachelor’s or a professional degree. Pell Grants are considered a foundation of federal financial aid, to which aid from other federal and nonfederal sources might be added.
Other grants include:
Federal Supplemental Education Opportunity Grant (FSEOG)
Academic Competitiveness Grant
National SMART Grant
For more information about federal grants, click here.
There are many different types of public and private scholarships available to a diverse range of students. Scholarship programs can be university related or come from an outside source. They usually require applicants to meet specific academic, social, or economic requirements that are unique to each scholarship program.
Make sure to thoroughly explore all scholarship materials for detailed requirements and disbursement information.