Financial Aid Programs: Help With Paying for College

There’s no doubt about it. Higher education is expensive. For the 2015 to 2016 school year, in-state tuition at public four-year colleges and universities averaged close to $9,000, while tuition at private colleges and universities averaged more than $32,500. Even students with college funds typically need some assistance paying for college, which is where financial aid programs come in.

Types of Financial Aid Programs

Financial aid is a broad term that refers to money that students receive to help them pay for college. It can come in a number of forms:

- Scholarships. Scholarships are financial awards that are typically given out on the basis of merit and have set criteria that applicants must meet to receive them. There are scholarships for academic performance, athletes, participation in certain extracurricular activities and more. A scholarship does not need to be paid back to the grantor.

- Grants. Grants are financial awards that do not need to be repaid, but unlike scholarships, they are usually given out on the basis of need rather than on merit.

- Loans. Loans provide money for college that is repaid after graduation. Students receive the money for tuition in a lump sum and then must make payments on the principle and interest once they graduate.

Because scholarships and grants do not require repayment and are interest-free money, most experts recommend applying for these programs first. Then, students can use loan money to make up the difference between the amount covered by grants and scholarships and the cost of tuition.

Sources of Financial Aid

Financial aid is available from a number of sources, including:

- U.S. Department of Education. The federal government offers the Federal Pell Grant program and four different types of loans for students looking to pursue higher education. This type of financial aid can typically be used at any accredited school in the U.S.

- State Departments of Education. Many states provide financial aid to state residents in the form of scholarships and grants. Often, students need to be residents of the state for a minimum period of time, and in many instances, the programs are only available for students at public colleges and universities within the state.

- Financial Institutions. Some banks and other lenders offer private student loans. Typically, these loans require applicants to pass a credit check and have some verifiable form of income. As a result, parents typically must apply for the loans or cosign for them. With a private student loan, you can usually attend any college or university.

- Colleges and Universities. Many colleges and universities offer scholarships for students. Other financial assistance programs like work-study are also available at most schools. These types of financial aid are awarded by the college or university itself, so they are only good at a single school.

While college tuition rates are high and only expected to keep rising, there are many avenues for financial aid available. The key is finding the right programs to apply for. You can learn more about financial aid and sign up for free financial aid services by visiting http://tinyurl.com/zmwt4o4