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 students 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 parents. 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.
