The ABC’s of College and University Financial Aid
Does your child want to earn a degree in higher education? Do the higher costs of a college or university degree make it seem out of reach? When we think of college financial aid, we often do not think outside of scholarships for college. While thousands upon thousands of scholarships are available, you should not overlook other means of paying for college.
Each method of footing the bill for Anthropology and Entomology classes offers a particular feature that may best suit your child’s needs. Sifting through the types of financial aid may seem overwhelming at first. But the right guidance can make it as easy as 1-2-3.
Needs, sports, and future scientists
Like choosing classes for a school semester, before beginning your search for financial aid, make sure to familiarize yourself with the array of financial aid available. Two primary categories of financial aid exist:
Need-based financial aid
As the name suggests, if you have a financial need, you have met the main requirement for this type of aid. However, other types of requirements exist. Also, many people feel that they “need” financial aid, but how is this objectively determined? Financial data regarding your family and you are crunched and then assessed. Based on that assessment, experts can judge whether or not the need is real.
Non need-based financial aid
This is also referred to as “merit based” financial aid. As you might guess, this type of college financial aid does not require students to prove that they have financial need. Non Need Based financial aid typically is based on competition among applicants, so the people awarded these scholarships are superior in whatever standards are used to select them. These standards are based on factors such as: community service; athletic skills; field studied; leadership skills; and ethnic or religious background.
Loans, grants, and burger joints
Next, within the categories of need-based and non need-based financial assistance, three varieties of financial aid exist:
Loans: Loans are a type of financial assistance that must be paid back. In the case of need-based student loans, they can be repaid after you graduate, and tend to have lower interest rates that the majority of other varieties of loans.
On the other hand, in regards to student loan repayment, non need-based loans can be paid after you have graduated. The bad news is that you must pay the interest that the loan earns, even while your child is enrolled in college or a university.
A few special situations should be noted. Certain non need-based loans exist for the parents of college or university students. These loans have a higher interest rate than those directly for students, and have a lower number of special requirements. Also, in certain cases, the repaying of student loans can be postponed. Furthermore, after performing particular services, the loan can be canceled in part or in whole.
Grants: This type of financial aid does not have to be repaired or earned. By and large, scholarships are classified as a type of grant.
Work-Study Program: This combines aspects of both grants and loans, allowing you to pay for college or university classes, as you continue your college education. Work-Study is referred to as a variety of “self-help” financial aid, which also includes a prepaid tuition plan. The work can be related or unrelated to your major, and either on or off campus. As a general rule, it is advisable that the work be related to your field, to provide you with some valuable experience in it.
Work-Study provides several advantages:
- Helps teenagers to become more responsible
- Provides work experience
- Creates a resource for recommendations, for future job searches
- Teaches time-management skills
Getting to the sources
Finally, what are the sources of the various types of financial aid for college students? They include:
Federal
This is the largest source of need-based financial aid, and also a huge resource for non need-based aid as well. The United States Department of Education determines whether particular colleges and universities are entitled to award federal funds.
State
This type of financial aid varies from state to state and may include restrictions, based on attendance or residency. States’ financial aid can be either need-based or non need-based (based on academic performance). They also sometimes provide work-study programs and loans.
Institutional
With the recent skyrocketing of educational costs, this source of need-based and non need-based financial aid, has recently increased in popularity. You may need to apply specifically for institutional financial aid.
Private
This source for financial aid is the best source for unusual scholarships. You can learn more about private financial aid sources through a variety of sources, including the Internet, community groups, the chamber of commerce of your city, or a local library.
Do you need college or university financial aid? The first step in determining whether a scholarship or a 529 college savings plan would be more ideal for you, is to familiarize yourself with the types of financial aid available. That will make your choice easier than creating a class schedule!
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