Financial Aid Basics

Do the words FAFSA, PLUS, EFC and Stafford mean anything to you? Without a doubt, colleges tend to speak a completely different subject when it comes to money matters, but it is fortunately very easy to learn the basics. Just read on.

In a nutshell, financial aid simply refers to money that can help people pay for their college tuitions. There are three different types in total:

Grants

Overall, the best type of financial aid would be in the form of grants, gift aids or scholarships. With it, students can get free money without having to pay anything back. However, grants are only given to students who are in desperate need for one because of their financial situations; have great grades, musical talents or athletic abilities; or have qualified for financial aid through a certain employer.

Loans

Loans, on the other hand, will eventually need to be paid back. Several loans, like Perkins or federal Stafford loans, are considered to be financial aid since taxpayers will subsidize all of the rates to help students borrow money for less than they would usually get from their banks. Several schools and charities provide college loans for no interest whatsoever, as well. Conversely, if the parents are the ones seeking for financial aid, then they either need to get a PLUS loan or try to get a cheaper loan from the bank.

Work-Study

Sometimes, the government will subsidize several nonprofit and campus jobs for certain students, but students will only get these jobs if they are in real need of financial help. Usually, these jobs will not pay much, either, so students might want to look for jobs that pay better off-campus instead. However, work-study jobs do have several benefits. For one, their earnings will not reduce any future awards for financial aid for the student and their schedules usually go well with the college. Since they are located on-campus, students won't have to worry about commuting, either. Of course, the time to do these jobs will be limited every week, but this is done so that students can keep getting good grades while working at the same time.

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