Grants and scholarships are the most desirable forms of financial aid because they come in the form of free money, often with no strings attached. Some grants and scholarships are applied right to your bill - you often see this with federal and school-based aid.
Unlike grants and scholarships, student loans need to be repaid. Student loans often provide a larger amount of money compared to other financial aid options. Interest rates, especially with private loans, can make repaying the debt take a longer amount of time.
Grants and scholarships are the most desirable forms of financial aid because they come in the form of free money, often with no strings attached. Some grants and scholarships are applied right to your bill - you often see this with federal and school-based aid.
A grant is a form of financial aid that doesn't have to be repaid (unless, for example, you withdraw from school and owe a refund, or you receive a TEACH Grant and don't complete your service obligation).
A grant is a way the government funds your ideas and projects to provide public services and stimulate the economy. Grants support critical recovery initiatives, innovative research, and many other programs listed in the Annual Publication of Assistance Listings (APAL).
Loans are considered a form of financial aid because they provide the necessary funds to cover educational expenses, such as tuition, books, and living costs. Unlike grants or scholarships, which do not need to be repaid, loans must be repaid with interest.
"The rule is: free money first (scholarships and grants), then earned money (work-study), then borrowed money (federal student loans)," the US Department of Education writes on its website, adding that private loans should be the last resort.
The main difference between a grant and a loan is repayment. A loan requires you to repay the money you borrow, whereas a grant does not. Grants are, essentially, a gift. In other words, they're non-repayable.
Work-study is a form of student employment limited to part-time during the school year, and students usually work no more than 20 hours a week. Partially funded by the federal government, this program provides financial assistance through student employment.
A subsidized loan is your best option. With these loans, the federal government pays the interest charges for you while you're in college.
While you won't be eligible for federal grants or aid if you're currently in default, you may still qualify for private grants. Most private grants to pay off student loans will still be available to you even if your loans are in default, though you should always check the eligibility requirements just to be sure.
Scholarships and grants, for example, are types of “gift aid” and do not need to be repaid. Work-study earnings are also yours to keep and do not need repaying. On the other hand, loans must be repaid with interest, including both federal and private loans.
Federal student loans are the most common type of student loan. There are four main types of federal student loans: subsidized, unsubsidized, parent loans, and consolidation loans. There are also private student loans, which generally have higher interest rates and stricter requirements.
Subsidized loans don't generally start accruing (accumulating) interest until you leave school (or drop below half-time enrollment), so accept a subsidized loan before an unsubsidized loan. Next, accept an unsubsidized loan before a PLUS loan.
Scholarships and Grants: Scholarships and grants are often called “free” money or gift aid because a student does not have to repay these resources. Scholarships and grants are the most desirable type of financial aid. In most instances, students must have demonstrated need to qualify for scholarships and grants.
The FAFSA opens on December 31 for the 2024-2025 academic year and is a government form that helps determine your eligibility for federal aid. Schools and the government use the FAFSA to see how much financial support you could get to fund your education, such as federal student loans, grants, and scholarships.
Private loans are generally considered the least attractive option, as they often have higher interest rates and fewer borrower protections compared to federal loans.
Scholarships and grants are the best option as they don't need to be repaid. However, it's unlikely that you'll cover the entire cost of college with just scholarships and grants. If offered work-study, it's a great idea to accept that second. This money is earned, meaning that you don't need to repay it over time.
Grants are gift aid from federal, state, or university sources. They are awarded to students based on need, and they DO NOT NEED TO BE REPAID. You must complete the FAFSA or DREAM ACT application to be considered for grant awards. Grants require enrollment in 12 UNITS to maintain maximum eligibility.
Federal college grants
The main federal grant programs include: Pell Grant. This popular grant program is available to anyone who meets certain financial need requirements and is enrolled at least part-time in college. Your actual grant is based on the amount of demonstrated need.
A grant is a gift that does not have to be repaid; it is based on the student's financial need. A scholarship is an achievement award which is usually based on academic grades, abilities, skills, test scores, class rank, etc. Loans are funds borrowed by the student and/or parent.
FSA, an office of the U.S. Department of Education (ED), is the largest provider of student financial aid in the nation. At FSA, our more than 1,400 employees help make postsecondary education possible for more than 9.9 million students each year.