Paying for college education isn’t cheap, but you might consider it an investment in your future. Whether you are a recent high school grad or an adult looking to go back to school, financial aid is one option for managing tuition costs. Several different forms of financial aid exist, including grants, scholarships, loans and work-study programs. Each type of financial aid has different requirements. Some involve repayment and others do not.
When you apply for financial aid by completing the Free Application for Federal Student Aid form, you will have access to grants based on your financial needs. A grant is a monetary award, usually awarded by the federal government or your state government. Examples of grants include the Federal Pell Grant and the Federal Supplemental Educational Opportunity Grant. To receive a grant, your income usually needs to meet certain criteria. Your school also has to meet eligibility criteria for the grant, and you have to enroll in an approved program. As long as you maintain the requirements for the grant program, you won’t have to pay back the funds.
Your FAFSA award may also include scholarships awarded by the government or private businesses. Scholarship awards involve recognition for academic achievement, athletic achievement, talents, skills and even cultural background. When you receive a scholarship, you need to maintain the eligibility requirements for the reward. One example of a requirement could be your grade point average. As long as your GPA stays above the minimum requirement for the award, you won’t have to pay back the scholarship.
Work Study Funds
If your FAFSA award includes a work-study program, you have the opportunity to work to earn money to pay your college expenses. The FAFSA will set a specific work-study award, and you can work to earn money up to this dollar amount. You apply the money you earn to your tuition, academic fees and living expenses. Because you earn these funds, you do not have to pay the money back.
Your financial aid package will probably also include student loans. Any student loans you accept will be just that -- loans. You will need to pay back all student loan amounts, with interest. You will usually have a choice between federal student loans and private student loans. Federal student loans typically have greater benefits than private loans, including fixed interest at lower rates, tax deductible interest, a more relaxed credit check and special repayment plans, if needed. With a federal student loan, you can usually request a deferment or forbearance for unexpected financial hardship circumstances. Private student loans might not offer these special options.
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