Financial Aid - Types and Tips

Jan 11
09:09

2012

Milana Grade

Milana Grade

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A free article containing information on federal student aid options available. Read it today to know more about each type and apply successfully.

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Millions of people today realize the importance being educated and the tendency of the growing interest to the education is increasing. It's obvious because education influences all areas of people's lives from income level and career opportunities to health issues.

In order to cover the total cost of the education a student can consider several funding sources including grants,Financial Aid - Types and Tips Articles scholarships and student loans (federal or non-federal). It is necessary to understand the difference between each type of student aid and be well informed about advantage and disadvantages of each one.

The main difference between grants, scholarships and student loans is in the obligation to pay money back. These loan options can be divided into two groups: financial aid that must repaid and financial aid that doesn't have to be paid back.

Student loans are loans from the federal government or private lenders and this source of aid must be repaid. In other words, a borrower is responsible for paying his loan back to the lender. Federal student loans can be considered as low-income loans and private loans are not cheap. However students typically consider focusing on education loans only after grants and scholarships have been exhausted.

Scholarships

Scholarship is the type of financial aid designed for students who demonstrate or show potential for excellence in a certain area or discipline. Scholarships can be based on a student's academic or artistic possibilities. In other words if a student has great academic results in school – he can qualify for a certain type of scholarships.

It is important to know that there are also need-based scholarships. In this case, academic potential and results do not really matter because the financial need is on the first place. If a student and his family have financial need there are good chances to qualify for this type of scholarships. In order to apply for it it's necessary to fill out a Free Application for Federal Student Aid (FAFSA)  in time. There are also other scholarship types available for students like career-specific or college-specific.

Grants

Grant is another form of financial aid that is based on financial need according to formulas established by the federal and state governments or schools. It's important to understand the difference between grants and scholarships. Scholarships may be need-based and in most cases they are merit-based i.e. are awarded to student with high academic or athletic results. However grants are always dealing with need based criteria.

Common sources of student grants include the following:

- federal and state governments

- colleges and universities

- public and private organizations

In the end, it's necessary to take into consideration that three types of financial aid (grants, scholarships and loans) can become a great college funding source in case a student knows how to apply effectively. The best tactic that has proven results is to think about your future and be well informed i.e. gather as much information as possible before applying and have a plan in mind.