While the federal government is the largest provider of student financial aid, helping 10 million students afford college each year, you can also access aid from state governments and other private organizations. Understanding all of your financial aid options can help you cover your college expenses while minimizing your student loan debt. Learn more about the various types of financial aid, how they work, and how to apply.
Grants
Grants are a form of financial aid you don’t need to repay as long as all conditions of the grant program are met. They are typically awarded by organizations, colleges, academic institutions, and federal and state governments based on an individual’s level of need. However, some do have merit requirements.
Federal Grants
When you fill out the Free Application for Federal Student Aid, commonly known as the FAFSA, you will automatically be considered for federal grants. Here is an overview of some of the most common federal grants:
Pell Grant: These grants are typically awarded to undergraduate students with financial need who haven’t yet earned a degree. The amount has an annual cap, which is $6,895 for the 2022-2023 award year.Teacher Education Assistance for College and Higher Education (TEACH) Grant: TEACH grants provide up to $4,000 per year to college students who plan to become teachers. However, they come with a teaching service requirement that must be completed, or the grant will be converted into a loan that must be repaid.Iraq and Afghanistan Service Grant: These grants help pay the college education expenses of students whose parents or guardians died as a result of military service in Iraq or Afghanistan. The award amount is equal to the size of the Pell Grant but can’t exceed annual attendance costs.Federal Supplemental Educational Opportunity Grants (FSEOG) Grant: FSEOG grants are available for students at participating schools who demonstrate exceptional financial need. The amount can vary from $100 to $4,000 and is administered directly from the school’s financial aid office.
State Grants
You may also apply for state government grant programs. For example, California has the Golden State Teacher Grant (GSTG) Program, which offers awards of up to $20,000 for students preparing to earn a teaching credential in a high-need field. Grant recipients will also need to commit to teaching at a priority school in California for four years within five years of completing their program. Similarly, Texas offers the TEXAS Grant program, which provides aid to students who demonstrate a financial need and are attending a public four-year or health-related institution in Texas. Look up your state’s programs to find out more. Beyond state and federal grants, your college may offer additional grant opportunities. Be sure to connect with your school’s financial aid office for details.
Scholarships
Scholarships are another form of financial aid that doesn’t have to be repaid. In contrast to grants, which are typically need-based, scholarships are more often merit-based. That means they will depend on a student’s achievements in areas like academics, community involvement, or athletics. Scholarships are awarded by various organizations, including the government, colleges, employers, individuals, nonprofits, religious groups, and private organizations. Many are geared toward particular groups such as women, military families, and minorities. Scholarships can come in different forms, such as a full-tuition scholarship or a one-time award—an amount intended to cover the full or partial cost of college. Overall, the funds generally must be used to pay for tuition and education expenses deemed necessary by the school you attend, which can include books, housing, supplies, and more. To apply for scholarships, you can search various databases that serve as sources of both grant and scholarship information. Here are a few:
Scholarships.com: Contains over 3.7 million college scholarships and grants totaling about $19 billion in financial aid. The College Board: Search 6,000 programs totaling over $4 billion annually. CareerOneStop: Searchable database of scholarships and grants is provided by the U.S. Department of Labor. Fastweb: Set up a custom profile to access a database containing 1.5 million scholarships totaling $3.4 billion. Reserve Officers’ Training Corps (ROTC) Scholarships: These merit-based awards, offered by the federal government through the armed services, are designed to help students and their families pay for school. These scholarships can cover either tuition and fees or room and board, and each comes with stipends for living and books in exchange for a service commitment.
Additionally, you should fill out the FAFSA, ask a financial aid counselor at your school, and check with your state’s department of education.
Work-Study
Work-study is another financial aid option determined by completion of the FAFSA. The Federal Work-Study program enables you to work part-time and earn money to pay for school. It is administered by participating schools and is available to both part- and full-time students. You can find out if your college or university participates by asking your school’s financial aid office. The program emphasizes employment in community service areas, as well as work related to your course of study (whenever possible). Work-study jobs may be on or off-campus. Off-campus jobs are typically provided by public agencies or private nonprofit organizations. You can expect to earn at least the federal minimum wage but may earn more depending on the position.
Loans
Student loans are another type of financial aid available to college students. Both federal and private student loans provide students with money that needs to be repaid, with interest, over a set term.
Federal Student Loans
The U.S. Department of Education offers the William D. Ford Federal Direct Loan Program, which has four types of loans:
Direct Subsidized Loans: Need-based loans awarded to undergraduate students pursuing a degree at a career school or college. The Department of Education will pay interest on your loan while you’re in school, six months after you’ve left school, and during a deferment period. The annual loan amount can be as high as $5,500 depending on the borrower’s dependency status and grade level.Direct Unsubsidized Loans: Non-need-based loans for undergraduate, graduate, and professional students. Borrowers are responsible for interest during all periods. Loans are available up to $20,500, depending on a borrower’s dependency status and grade level.Direct PLUS Loans: Credit-based loans for parents of undergraduate students, as well as graduate and professional students. Loans are awarded up to the maximum cost of attendance, less any other financial aid. Direct Consolidation Loans: A consolidation option for federal loans, which enables you to combine your federal student loans into one loan with a single provider.
Private Student Loans
In addition to federal loans, many private lenders also offer student loans. However, federal student loans typically offer several advantages over private loans:
Interest rates are fixed and are usually lower than those on private loans. You don’t need a credit check or a cosigner on certain federal loans. Federal loans don’t need to be repaid until you graduate or drop below part-time status.With Direct Subsidized Loans, the government will pay the interest on your loan for a period. In certain cases, federal loans can be forgiven. Federal loans offer flexible repayment options.
Due to these advantages, it’s typically best to find out what federal loans you can get approved for first based on your FAFSA submission. Then, if you have leftover expenses to cover, you can explore private student loans as a last resort. If you decide student loans are right for your situation, you can apply for federal loans through the FAFSA. For private loans, you’ll need to seek out reputable private lenders and compare their offerings to find the best option for you.
Additional Aid
In addition to the main types of financial aid, there is also specialized aid available in the following forms.
College-Based Aid
Contact the financial aid office at your college to find about any institution-specific aid that can help you bridge any financing gap you may have.
Aid for International Studies
Do you plan to study abroad or attend an international school? You may still be able to get financial aid. If your American school participates in the federal student aid programs, you can apply to get federal aid to pay for your study abroad program. Further, if you choose an international school that participates in federal aid programs (there’s a regularly updated list at StudentAid.com), you can also apply for federal student loans. In both cases, you’ll need to complete the FAFSA.
Aid for Military Families
If you’ve served in the military or are the child or spouse of a veteran, there is a variety of education benefits available to you, including:
Post 9/11 GI Bill: Awards up to 36 months of benefits to those who served on active duty after 9/11/2001. The benefits can help to pay for school or job training, housing, books, supplies, and moving from a rural area to go to school.Yellow Ribbon Program: Helps veterans to pay for tuition and fees not covered by the Post-9/11 GI Bill.Loan Repayment Programs: Income-driven repayment plans, which base your monthly payments on your income, are available to eligible service members. A Public Loan Service Forgiveness Program also exists that can forgive a portion of Federal Direct Loans for military service members after 10 years on a standard repayment plan or after making 120 qualifying payments on an income-driven repayment plan.Organizational aid: Various organizations, such as the American Legion, AMVETS, Veterans of Foreign Wars, and Paralyzed Veterans of America, also offer scholarships to active duty military, veterans, and their families.
Aid From Your State Government
While federal student aid programs are very popular and comprehensive, state agencies may also be able to help. Be sure to contact the Department of Education for your state to learn about any additional aid you may qualify for on the state level.
Financial Aid Deadlines
One key aspect to remember when applying for financial aid is that the programs have deadlines. It’s important to be aware of when applications open and close. It’s always advisable to apply as early as possible because many of the programs have limited funds. The FAFSA opens on October 1st in the year prior to an academic year, while the federal deadline is June 30th at the end of each academic year. For example, you could complete the FAFSA as early as Oct. 1, 2022, for the 2022-23 academic year, and will have until the deadline at 11:59 p.m. Central Time (CT) on June 30, 2023. It’s important to note that each state has its own FAFSA deadlines (view them here).
