There are four basic types of aid:
- Grant & Scholarship
- Loan & Work Study
There are four main sources of financial aid:
- federal government
- state government
- college/university
- private organization
Grants & Scholarships
Grants and scholarships are gift aid, i.e. free money which does not need to be repaid.
Scholarships are usually given to students based on some form of demonstrated merit, e.g. academic ability, community service involvement, musical talent. Scholarships often require that the student be needy in addition to being meritorious.
Grants are usually given to students based solely on a demonstration of financial need.
Loans & Work Study
Work Study is simply a job, often on campus, for which a student earns a paycheck. It is considered financial aid because the government is paying a portion of the paycheck and the student must demonstrate need to qualify.
Loans are aid funds that are borrowed and must be repaid at a future date, usually by the student or their parent. Federal student loans are considered aid in part because the interest rates are subsidized by the federal government.
Sometimes a portion of a loan can be forgiven, i.e. not repaid, if a student goes into certain occupations or does full-time volunteer service upon graduation from school.
Need Based Aid
The financial need of a student is determined by the information provided on the Free Application for Federal Student Aid (FAFSA). Financial need is simply defined as the difference between the student's cost of attendance and the EFC (expected family contribution - or basically the family's ability to pay towards the costs of attending college).
Cost of Attendance
- EFC (expected family contribution
Need
Since a student's EFC is the same regardless of which school they attend, a student's need varies based on the cost of the school.
Federal Aid
The federal government offers grants, loans and work-study. Eligibility for these aid programs is determined by the financial aid administrators at the college where a student chooses to attend.
Eligibility will often vary from school to school and is not transferable. Students must have a determination of eligibility done at each school that they are interested in attending.
State Aid
New York State offers grants and scholarships. Eligibility is determined by HESC in Albany, not the school a student attends.
The school does verify that the student is making satisfactory academic progress toward their degree and is enrolled for the required number of credit hours.
Other states also have grant programs. Some states allow their students to use the grants to attend colleges that are out of state.
Institutional Aid
Most colleges and universities have grant and scholarship funds that they give to their students and some have work programs outside of the federal work program. Others even have loan programs.
Students should contact each individual school that they are interested in attending to see what additional aid programs they offer and what they must do to qualify for the aid.
Private Aid
Private organizations offer scholarships and sometimes forgivable loans.
The pool of applicants can be quite limited as it might be for a local church or civic organization or very large such as with the Gates Scholarship available to minority students nationwide.
It's best to look for scholarships locally first as the competition is less and then to investigate national scholarship programs.
