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How exactly is financial aid different from scholarship?
What are the perks of financial aid and how is it distributed #financial-aid #scholarship #college #money #finance ?
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Jake’s Answer
Financial Aid is a loan you will eventually have to pay back. A scholarship is gifted to you without the expectation of having to pay it back.
Financial aid is great if you cannot afford to go to college/university now. They will loan you money, with the expectation that after you graduate, you will pay that money back (with interest). Financial Aid loans are usually have relatively low interest rates, some have 0% until you graduate. The institution that grants the loan (usually the government) is betting on you. After you graduate, you will have a job in which you can pay back the loan. There are different payment plans available, and deferment if you can't immediately start paying off the loan.
If you want to learn more, check out the FAFSA page
Financial aid is great if you cannot afford to go to college/university now. They will loan you money, with the expectation that after you graduate, you will pay that money back (with interest). Financial Aid loans are usually have relatively low interest rates, some have 0% until you graduate. The institution that grants the loan (usually the government) is betting on you. After you graduate, you will have a job in which you can pay back the loan. There are different payment plans available, and deferment if you can't immediately start paying off the loan.
Jake recommends the following next steps:
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Britney’s Answer
I have been a financial aid counselor for 12+ years. I will share some very basic information with you below. some of the answers here are incorrect in telling you that financial aid is only loans.
Financial Aid is an overarching term that covers Grants, Loans, Scholarships, Work Study, and Tuition Waivers. These types of financial aid come from many different sources such as Federal and State governments, colleges and universities, foundations, and other private outside sources.
Free financial aid are grants and scholarships. These can be merit based, need based, or both. These do not typically need to be paid back. You can apply for federal grants by completing the Free Application for Federal Student Aid (FAFSA) at www.fafsa.gov. Check your state higher education commission for additional grants through them. Also check with the college(s) you are applying to.
Loans have to be paid back, usually with interest. There are Federal Direct Student Loans, through the government and paid through your college. There are also private loans, that you would apply to through your bank. There are different interest rates for those different loans. The private loans do have to be certified by your college's financial aid office.
Work study is where you work on campus or off campus in a community service position, and are paid federal or institutional funds through the college. You will earn a paycheck just like any other job.
Tuition Waivers have specific requirements for the type of tuition waiver. For example, in my state we have these for STudents on SSDI (disability/social security) and they waive tuition, but they still pay fees. We also have these for homeless and foster care youth, and their tuition and fees are both waived. This means any grants or scholarships they receive can go towards paying their books and other necessary expenses.
Visit www.studentaid.gov to learn about federal financial aid options
Visit www.collegeboard.org to learn about college search and pricing to compare college tuition rates
Financial Aid is an overarching term that covers Grants, Loans, Scholarships, Work Study, and Tuition Waivers. These types of financial aid come from many different sources such as Federal and State governments, colleges and universities, foundations, and other private outside sources.
Free financial aid are grants and scholarships. These can be merit based, need based, or both. These do not typically need to be paid back. You can apply for federal grants by completing the Free Application for Federal Student Aid (FAFSA) at www.fafsa.gov. Check your state higher education commission for additional grants through them. Also check with the college(s) you are applying to.
Loans have to be paid back, usually with interest. There are Federal Direct Student Loans, through the government and paid through your college. There are also private loans, that you would apply to through your bank. There are different interest rates for those different loans. The private loans do have to be certified by your college's financial aid office.
Work study is where you work on campus or off campus in a community service position, and are paid federal or institutional funds through the college. You will earn a paycheck just like any other job.
Tuition Waivers have specific requirements for the type of tuition waiver. For example, in my state we have these for STudents on SSDI (disability/social security) and they waive tuition, but they still pay fees. We also have these for homeless and foster care youth, and their tuition and fees are both waived. This means any grants or scholarships they receive can go towards paying their books and other necessary expenses.
Britney recommends the following next steps:
absolutely spot-on and precise! thanks!!
Gulshan Batra
Updated
Maggie’s Answer
As an additional point, I would only add the warning when it comes to financial aid and taking out a loan, especially if you are paying it for it by yourself, make sure you fully understand how much debt you are taking on. Too often, adults enter college, take out a loan to pay for college and don't think about the fact that they will have to pay all of this off once they graduate. Depending on the college or university you attend, that can be a large amount of money. It is important before you pick any college or university to attend, if you are taking out a loan through financial aid, understand exactly how much debt you will accumulate after four years and how long that will take to pay off (they have calculator tools on line to help). Understanding this before hand will help you make a decision that you are comfortable with and know that you will be ok paying off in the future. Good luck!
Updated
Jacqueline’s Answer
Financial Aid is a general term for any type of financial assistance including grants, loans, scholarships, tuition waivers, and work-study. Grants, scholarships, and tuition waivers do not need to be repaid. Loans will need to be repaid. Work-study is a job through your college that is funded through federal work-study grant or school student employment funds.
Scholarships are generally privately funded. It may have very specific criteria for example, your area of study, where you live, your GPA, and/or your background. They do not need to be repaid.
Complete the FAFSA at studentaid,gov
Contact your college to see what scholarships they have available
Do an online search for scholarship website
Scholarships are generally privately funded. It may have very specific criteria for example, your area of study, where you live, your GPA, and/or your background. They do not need to be repaid.
Jacqueline recommends the following next steps: