When you’re looking at colleges and applying for financial aid, one of the things that you are wondering is what are the four basic types of financial aid. No matter what your financial aid package looks like, what you school you go to, or what needs you bring to your higher education, these four types of financial aid will be the same. Of course, the amounts may vary, but every award will be one of these four kinds.
- 1. Grants. This is the first answer to what are the four basic types of financial aid. This is financial assistance that you don’t have to pay back. For undergraduates, one of the chief forms of grants is the Pell grant, which is issued by the federal government. The amount of the Pell grant has been steadily increasing, and many students find that it goes far toward covering their tuition expenses, and minimizes the amount that they have to borrow in the form of student loans. There are also grants available through schools or other institutions that can help finance a college education. Grants are usually need-based.
- 2. Loans. The second answer to what are the four basic types of financial aid is loans. Some financial aid comes in the form of student loans. There are several different kinds of these loans. There are subsidized loans, for which the government pays the interest until the student is out of school. There are also unsubsidized loans, which means that the interest accrues while you’re in school and you have to pay more back when your repayments start. There are also PLUS loans, for parents who are trying to finance their children’s education by borrowing, rather than making their kids borrow.
- Scholarships. Scholarships are usually merit based, and usually have to be applied for separately. There are thousands of scholarships available, some of them though the school, and some of them through national organizations. A free service such as Fast Web can help you find the kinds of scholarships you might qualify for. They’ll also provide you with directions for how to fill them out and where to send them. Your school should also have an extensive database of local scholarships that you should apply for. Scholarships can be awarded for varying amounts, from a couple hundred dollars to $10,000 or more.
- 4. Work Study. This means that you will have a part time job working for the school. You’ll still get a paycheck, and it will provide you with the living expenses you need from month to month, between receiving your financial aid checks. This is often where students’ food, rent, and discretionary money come from.
When asking what are the four basic types of financial aid, make sure to ask your school’s representatives about each of these types of assistance.