Types of Need-Based Financial Aid
When you receive a need-based financial aid package from a college, it may include any of the following types of aid.
- Federal Student Loans – The Federal Government offers both subsidized and unsubsidized student loans. Being offered a subsidized loan is based on your expected family contribution calculation, whereas any student who fills on the FAFSA can receive an unsubsidized Federal student loan. There are also the PLUS loans offered to parents to cover the costs they cannot cover through other financial aid. Here’s a PDF listing of the Federal Student Loan Programs.
- Federal Work Study – This sounds like a guaranteed job, but it is not. Basically, your student must apply for and get a job on campus or off campus at specified types of organizations. They will earn a paycheck like any other student with a job. Your student earns at least the federal minimum wage. The money is not paid directly to the school so your student can use it as he or she sees fit. Some colleges reserve specific on campus jobs for Federal Work Study students.
- Federal Grants – The Pell Grant is the most common one. Grants do not need to be repaid. Here’s a PDF listing of the Federal Grant Programs.
- State Need-Based Grants and Scholarships – Many states offer specific need-based grant and/or scholarship programs for college students. You can find out about these through the National Association of Student Financial Aid Administrator’s website under State Financial Aid Programs.
- School’s Own Need-Based Grants and Scholarships – Most colleges offer some grants and scholarships that are based at least in part on a student’s financial need. These usually require the student to submit the FAFSA to determine eligibility. There are often “combo” scholarships that are based on both merit and financial need.
What you want to see in a financial aid package is the “free” money – grants and scholarships that don’t need to be repaid. Sometimes a financial aid package can look great at first glance until you dig into the details and find out the school is offering you a bunch of loan money.
In addition to the need-based component, a school’s financial aid package may also include merit scholarships. These come in all different amounts and have a variety of qualifications. For more information on merit scholarships, read Merit Scholarships – Types and Sources.
Using College Aid Pro™’s suite of tools, you’re able to estimate how much need-based aid your family will qualify for, and determine which colleges and universities are the best fit for you from a financial and an academic perspective. You can sign up for free today by clicking here.