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Personal Finance

Know the different types of College Financial Aid packages available today

Nowadays it is seen that most colleges will arrange financial aid packages to assist those students who need financial help. College financial aids are intended to compensate the difference between what you or your family can afford to pay and what college costs. According to an estimate over half of the students currently enrolled in colleges get some sort of financial aid to help their college expenses. The rules and regulations of financial aid packages are based on the federal financial aid rules.

There are mainly four types of college financial aids

  • Grants and Scholarships
  • Loans
  • Working and Savings
  • Military Programs

Grants and Scholarships

Grants and scholarships are both financial awards which are gifted to students by the state or federal sources. Grants are usually considered as need-based financial aid and the students need not have to repay the amount gifted to them. While scholarships are merit-based financial aids which are usually awarded based on the merit or merit plus of the students. Scholarships usually come from government or private sources and like grants scholarships also need not have to be repaid.

To receive grants or scholarships you have to fill up the Free Application for Federal Student Aid (FAFSA), no matter how many colleges you are considering. The FAFSA features a section for students to record the colleges to which you need your information to be sent. Remember to check with each college to verify if there are any additional forms required.

Loans

Federal government guarantees for student loans as most banks and financial institutions consider offering loans to students to be much riskier. This helps students to get student loans from the federal government, the institution you enrolled, or from a bank. The interest rate of such programs tends to change. That is, for student loans from the federal government students need not have to pay interest while studying in a school (on certain circumstances pf according to the need). Also, in most cases students loan have less interest rates when compared with other loans. Repayment of loans is also delayed until the student graduate. These types of loan programs are also offered to eligible parents so that they can cope with the college expenses of their children.

Working and Savings

There are many students who choose to work while in college. A part time job while studying will help you to meet your college tuition and other expenses. Most of such work-study programs are funded by the federal government and some states. Such work-study programs are included in most students’ financial aid packages. Work-study offers jobs for undergraduate and graduate students with financial need, which lets the students’ to earn money to pay for their educational expenses.

Military Programs

The military offers various programs to help students to pay for their college expenses.

  • Reserve Officers’ Training Corps (ROTC) – this program offers money for college expenses while you are in school. And upon successful completion of your graduation, you can enter the military as an officer.
  • Servicemembers Opportunity Colleges (SOC) – More than 1800 colleges participate in this program. The program lets the servicemembers to get a degree from a civilian college while serving in the military.
  • Veterans – a number of programs are available for those who have served in the military. Check with the Veterans Administration for details.

For a student to be eligible to get a college financial aid package, you need to fill in the Free Application for Federal Student Aid (FAFSA) and must be a permanent resident or a citizen of the United States. The student applying for a financial aid package also need to be enrolled, or accepted for enrollment, or must be attending at least half-time in an approved postsecondary educational institution.