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What Types of Financial Aid Are There?

Types of Financial Aid

Now that you’ve applied for financial aid by completing your FAFSA, you might be wondering … what’s next? Well, each of the schools you have applied to will receive your FAFSA and will be in touch with you because they want to issue you a financial aid award.

Check in With Your Schools

Before your schools provide you with your financial aid award, you may owe them a document or two first. There are times that the US Department of Education asks colleges to validate certain information from your FAFSA, and this must be completed before the Financial Aid Office can determine your eligibility and award. This doesn’t mean you did something wrong, it’s just part of the process for some students. If so, you must provide whatever documentation is asked. It could be a photo ID or information related to the tax data that was supplied on your FAFSA. Whatever it is, make sure you submit it quickly. While you may have applied for financial aid early, your eligibility is not fully determined until you have submitted all of your documents. Just because you did the FAFSA doesn’t mean you’re done!

*Pro Tip – If you have a self-service portal at your school, check there for a checklist of missing documents. It will detail the items that are needed, and how to submit them.

What Types of Financial Aid Are Available to Me?

Once your school is ready to issue your financial aid award, you may see several different sources and types of financial aid that meet your eligibility. The financial aid offered to you must be used for school-related expenses, such as tuition, room and board, and books and supplies. In most cases, your financial aid will be automatically applied to your student account to pay for your charges.

Remember … financial aid means grants, scholarships, work-study, and loans, and you can accept or decline any of the aid offered to you. What are these, exactly? Let’s dive in.


Grants are those sources of financial aid that generally do not have to be repaid. They are available from the federal government, but also from states and institutions, too. Grants are usually something called “need-based,” where need is a figure that a Financial Aid Office determines when you complete a FAFSA.

The most widely known grant is the Federal Pell Grant. It is for undergraduate students who have not yet earned their first bachelor’s degree. This grant program is an entitlement program, which means if you are eligible your college must provide it to you. For the 2022-2023 school year, the Federal Pell Grant maximum is $6,895. Since this award amount is set by Congress, expect to see the amount for the 2023-2024 school year sometime in January 2023.

There are also grants that are available from your state or institution. These aid programs are often awarded based on need and may require certain conditions to be met. Some of those conditions might include being a state resident or being enrolled full-time. There are also states that offer “free college” programs, which generally cover the cost of tuition and fees for students meeting certain criteria.


Scholarships fall into the same category in that they generally do not need to be repaid. You might find that scholarships typically come from private sources, such as local businesses or groups, and they are not need-based. Scholarships can be awarded based on “merit,” or academic achievement., Scholars hipAmerica, and FastWeb all provide a trustworthy space to search for scholarships relative to your background. Private scholarships, most times, are issued directly to your school on your behalf.


Work-Study is a program where you can earn a wage by working part-time at the college around your class schedule. Funds may either be supplied by the federal government or the institution. Like many jobs, the hourly amount for these positions may be pre-determined, and in some cases may reflect at least minimum wage in the state of your school. As a bonus, you can learn new skills that will support you both in and out of the classroom, and into your future career.

Student Loans

Student loans are funds that may be given to students, and in some cases parents, that must be repaid over time. They can come from the federal government or from private banks. Student loans can be a scary thing because they dominate the news so frequently, but they can also be a great way for young adults to establish credit responsibly and in potentially modest amounts – especially if they are federal loans.

Federal student loans come in two different formats: subsidized and unsubsidized. Subsidized loans are those where any interest accrued while you are in school will be paid by the US Department of Education. Unsubsidized loans are those where you as the borrower are responsible for all interest. Parents also have the option of utilizing a Parent PLUS loan, where a parent of a student is responsible for the loan and all interest. While the subsidized and unsubsidized loans are in the student’s name, they are also not based on a credit score, and they do not require a cosigner. The Parent PLUS loan is based on the credit score of the parent.

There are also limits to the amount that can be borrowed. The maximum amount you can borrow each year in subsidized and unsubsidized loans ranges from $5,500 to $12,500 per year. Parent PLUS loan amounts can be up the amount of college costs not covered by other financial aid.

For the most up to date information on federal student loans, their interest rates, associated fees, and repayment terms, check

If you find that your family situation is one where you need to consider a private student loan, check with your school’s Financial Aid Office to see if they have a preferred lender list. This list contains lenders reviewed by the college that meet certain conditions set by the school, which could include interest rates, repayment terms, and their overall reputation in the market. Private loans also require a credit check, have the option of a cosigner, and most times carry variable interest rates.

Pro Tip – Review the Financial Aid Office’s website for the schools you are interested in attending. They provide summaries of each financial aid program that is available to you as a student.

Still Have Questions?

Your Financial Aid Office is always available to assist you with your questions, even while you are in school. If you aren’t sure, just ask!

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