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- Paying for College
What Are the Types of College Financial Aid?
Where to get college financial aid comes from a variety of places, each having their own qualifying criteria. The best approach is the gunshot approach. Apply to all that you can and wait for the results.
There are grants, money that requires no pay back by the student. Scholarships also fall into this category. There are loans, these you must pay back. There private ones from banks or government loans. In both cases, you are on the hook until paid off because you cannot get rid of them in bankruptcy. There is federal work-study.
Pell Grants are very popular for only low income families and the maximum amount last year was $5550. The Pell is a government grant. Other grants can come from schools but like everything else, many are cutting back grant programs and scholarship amounts have been 15% less than other years.
The most popular federal assisted loan is the Stafford because the US government subsidizes it by paying the interest while you are in college at a rate of 3.4%. The good is that everyone is eligible for them of the unsubsidized loans with a rate of 6.8%. Then, there are Parent Plus Loans, which if the parents have good credit ratings they can get the student loan with a fixed rate of 8%. Before you turn to loans from other sources make sure you only use them for much smaller amounts.
Students from poorer families can benefit from work-study, which gives a chance for the student to work part-time. These pay up to $2400. Some schools expect that students apply their own money and want to see income from their own jobs. Brown University requires freshmen to pay $2500 of it from their own efforts.