New and prospective students want to find the best way to fund their post-secondary education. Should you take out a loan or try to get a grant? What is the difference between grants vs. loans?
First, a grant is a gift. The very word actually means “a gift.” Many millennials today are speaking out publicly about how they wish their education could be free. It is if you deserve it. But you need to fill a need. If you find an industry that is in high demand that needs government workers or innovators who can help with a problem in need of a solution, you may be in luck.
For example, with the growing aging population, there is a greater need than ever before for home healthcare workers and providers. Some grants are available for people who wish to work in the healthcare industry. The HRSA (Bureau of Health Workforce), offers a variety of grants to high school graduates or older people wishing to work in this highly important field.
There are several categories to choose from, including:
- Public health
- Oral health
- Behavioral health
- Health careers
This is just one example of what you might be able to qualify for in a grant. Look into more information on grants at the Sallie Mae loan site. LendEDU also does a great job of breaking down everything you should know about Pell Grants here.
Other federal grants may be available to families who make below a certain income. Parents will need to check on this to find out what the cut off is regarding the amount of salary someone can make and still qualify to have a student’s education paid for. The latest information indicated that a family must make less than $20,000 to qualify for a low-income Pell grant.
What about student loans?
Student loans, unlike grants, have to be paid back. The interest that is charged on a typical student loan is based on the current interest rates at the time and the amount someone borrows over time. The standard Interest formula can be used to calculate how much someone owes at any time.
If a parent makes too much money to get a Pell Grant or other type of funding to go to college, a student may apply for a student loan instead.
When shopping for loans, it’s important to consider how long the person will be in school, the overall cost of the degree and other expenses, and how long it will take to pay it back.
Students loans are available in two major forms:
- Federal loans
- Private loans
Both have their advantages and disadvantages. But the best loan is one that is flexible in the payment plans, allows a grace period, and is able to be consolidated if this is needed at a later time.
Private student loans require a credit check, so this is also something that will need to be considered.
Start with the FAFSA.gov site to get started.