Financial Aid 101

Financial Aid 101

Financial aid carries with it responsibilities that college-bound students must manage throughout college and beyond. Students and families should take the time to learn about their financial aid options before signing on the dotted line.

There are four types of aid that can create a financial aid package:

• Scholarships - Students usually do not have to pay back scholarships, which award money for academic achievement, athletic ability, special talents, and more. Scholarships are often available through public service organizations, like the Lions Club, the Rotary Club, and the National Association for the Advancement of Colored People (NAACP), through religious institutions and local businesses.
• Grants - Grant programs may be federal, state, or school-sponsored. Students may receive federal and state grants based on financial need, and they may receive school-sponsored grants based on financial need or merit. Students should check with the schools they're interested in attending for more information on school-sponsored grants.
• Work-study - Schools can provide students with on- or off-campus employment to help pay for college costs. Students also gain career-related, hands-on work experience.
• Student loans - Borrowers must repay loans with interest. Several types of loans are available:
• Federal Perkins Loans and Direct Subsidized Loans are need-based, government-subsidized loans. The government pays the interest that accrues on these loans while students are in-school at least half-time and during their grace period. However, if the loan was disbursed between July 1, 2012 and July 1, 2014, the student is responsible for paying the interest that accrues during their grace period.
• Direct Unsubsidized Loans are calculated based on your student's cost of attendance, minus other financial aid he/she receives. Interest begins accruing on unsubsidized loans from the date of disbursement. Your student is responsible for all interest that accrues on these loans. Any unpaid interest that remains at the end of the student's grace period will be capitalized (added to the principal balance) before repayment begins.
• Parent PLUS Loans are federally guaranteed loans for parents who want to help pay for their student's education. Parents can borrow up to the cost of attendance, minus any financial aid awarded to the student.
• Private Education Loans are available through financial institutions like banks or credit unions. They typically have higher interest rates, more fees, and less flexible repayment options than federal student loans. Loan terms and limits on Private Education Loans vary substantially by lender. Students should consider these loans only if they need additional funds after obtaining aid through scholarships, grants, and federal loans.