You’ll hear about financial aid hundreds of times before and during college, but it can be a confusing world to dive into. With strange terms and new meanings, there’s a lot that goes into approaching it. To help, we’ve broken down what exactly financial aid is, and what it all means.
Financial Aid Meaning
Financial aid is money that is used to help pay for college expenses. It can be money that is free (that does not need to be repaid), or money that does need to be repaid. It includes:
- Grants (does not need to be repaid)
- Scholarships (does not need to be repaid)
- Work-study (is earned through a job)
- Loans (does need to be repaid)
It can also be need or merit-based, which means your eligibility is determined by financial need or academic merit.
Types of Financial Aid
In addition to the types of aid listed above, there are also three forms: federal, private, and institutional.
- Federal aid
The federal government determines eligibility and awards students the above types of financial aid for college. To apply, you’ll need to file the FAFSA (the Free Application for Federal Student Aid) every year. This type of assistance is based on financial need.
- Private aid
Private aid can come from a variety of different sources, including banks, businesses, and organizations. It typically consists of scholarships and loans. This kind of aid can be based on financial need or academic merit.
- Institutional aid
This type of aid comes directly from your school. It usually involves scholarships or loans, and can either be based on financial need or academic merit.
These types of financial assistance are a great resource to help pay for college expenses and make school more affordable. Now that you know what it is, you’re one step closer to finding money for college.
There are countless options out there to help pay for college – you just have to know where to start! Check out our article on how to apply for financial aid here.