Understanding the types of financial aid
By Beth Ziehmer
October 04, 2019
Financial aid is one of the tools that make higher education possible for many students.
For students to successfully take advantage of financial aid, they need to understand the different types of aid available, what they may qualify for, and the terms or requirements of any financial aid they are offered.
Types of financial aid include:
- Scholarships: Gift aid
- Grants: Gift aid, normally do not have to be repaid
- Work-study: Allows students to earn money to pay educational expenses
- Student loans: Loans have to be repaid and should be used as a last resort
Students can apply for financial aid for the 2020-21 academic year by completing the FAFSA (Free Application for Student Aid) on or after October 1, 2019. Note that the first word of this application is free. This form is free to complete, so students and parents should never pay any fees.
The FAFSA should be submitted as soon as possible, as some schools award their financial aid on a first-come, first-served basis and require that all students, including those that receive merit aid (non-need based), submit a FAFSA. Also, check with your school to see if they have a priority deadline for filing the FAFSA.
Students and parents need to exhaust all free forms of financial aid prior to borrowing student loans. As a general guide, students should never borrow more than their expected starting yearly salary. To help students avoid over-borrowing, they should use the debt/salary wizard located at mappingyourfuture.org/paying/debtwizard/.
Visit mappingyourfuture.org/paying/financialaid.cfm to explore and review financial aid options.