Which type of aid is the least desirable?

Asked by: Prof. Derick Kilback  |  Last update: August 5, 2025
Score: 4.7/5 (50 votes)

"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.

Which types of aid are the most desirable?

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.

Which type of financial aid is not need based?

Non-need-based aid is often given to students by private companies, individuals, or colleges and universities. There're also non-need-based federal aid programs, like Direct Unsubsidized Loans, Federal Plus Loans, and Teacher Education Access for College and Higher Education (TEACH) Grants.

What are the types of financial aid from most attractive to least attractive?

The order of attractiveness for different types of financial aid, from most attractive to least attractive, is: Grants/Scholarships, Work-study, Federal loans, Private loans.

What is the most attractive financial aid?

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.

The 4 Types of Financial Aid available for College in the U.S.

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What is the best type of financial aid to accept?

Choosing the Best Financial Aid to Accept
  • Money you don't have to pay back first (e.g., scholarships, grants)
  • Earned money second (e.g., work-study)
  • Borrowed money last (e.g., federal student loans)

How much is too rich for FAFSA?

There is no income that is too high to file a FAFSA. No matter how much you make, you can always submit a FAFSA. Eligibility for need-based financial aid increases as the cost of attendance increases, so even a wealthy student might qualify for financial aid at a higher-cost college.

What is negative financial aid?

If the expected amount of financial aid exceeds the Regular Term Bill balance fees, your BruinBill will display a negative (-) amount, which indicates your anticipated refund amount. A positive balance indicates your expected out-of-pocket balance after financial aid is disbursed.

Is FAFSA or private loan better?

Federal student loans have several benefits when compared to private student loans. Access to income-driven repayment plans: The Department of Education offers several income-driven repayment plans, which can reduce your monthly payment to as little as 10 percent of your discretionary income.

What are the 4 types of financial aid?

Financial aid is money to help pay for college or career school. Grants, work-study, loans, and scholarships help make college or career school affordable.

Do scholarships cover dorm costs?

Yes. There are some scholarships specifically for housing.

What does FAFSA not consider?

Cars, computers, furniture, books, boats, appliances, clothing, and other personal property are not reported as assets on the FAFSA. Home maintenance expenses are also not reported as assets on the FAFSA, since the net worth of the family's principal place of residence is not reported as an asset.

What is the most common type of aid?

Official Development Assistance (ODA) is the most common form of foreign aid, which is the help provided to support development and to fight poverty.

What type of aid should you accept first?

Given the option, you should accept a Direct Subsidized Loan first. Then, if you still need additional financial aid to pay for college or career school, accept the Direct Unsubsidized Loan.

What are at least 3 types of aid that will be included in your financial aid package?

Types of Aid
  • Grants: Financial aid that generally doesn't have to be repaid.
  • Loans: Borrowed money for college or career school; your loans must be repaid with interest.
  • Work-Study: A federal work program through which undergraduates and graduate students at participating schools earn money to help pay for school.

What are the cons of FAFSA?

Most financial aid does not cover all school-related costs. Scholarships, grants, and work-study programs can be highly competitive. You may have to maintain certain standards to meet eligibility requirements during each semester. There's less flexibility on how you can spend funds.

Which student loan type has the most benefits?

Federal student loans are made by the government, with terms and conditions that are set by law, and include many benefits (such as fixed interest rates and income-driven repayment plans) not typically offered with private loans.

What is the best form of financial aid?

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.

What is the Max Pell Grant?

The maximum Federal Pell Grant award is $7,395 for the 2024–25 award year (July 1, 2024, to June 30, 2025). your plans to attend school for a full academic year or less.

Can you be too poor for FAFSA?

There is no income cut-off to qualify for federal student aid. Many factors—such as the size of your family and your year in school—are considered.

What is a negative of aid?

Aid and aid per capita data show the net value of official development assistance (ODA). Thus, if countries pay back more than they receive, they can show negative values of net aid.

Do parents who make $120000 still qualify for FAFSA?

There is no set income limit for eligibility to qualify for financial aid through. You'll need to fill out the FAFSA every year to see what you qualify for at your college. It's important to make sure you fill out the FAFSA as quickly as possible once it opens for the following school year.

What disqualifies you from FAFSA?

For example, if your citizenship status changed because your visa expired or it was revoked, then you would be ineligible. Other reasons for financial aid disqualification include: Not maintaining satisfactory progress at your college or degree program. Not filling out the FAFSA each year you are enrolled in school.

Will I get financial aid if my parents make over $400,000?

Technically, no income is too high for the FAFSA. The U.S. Department of Education recommends filling out the FAFSA yearly, regardless of income. However because FAFSA is needs-based aid, those from lower-income families with a greater financial need get access to more financial aid.