Skip to main content

Student Financial Aid

Types of Federal Student Aid

Most students receive financial assistance while attending college. In fact, about $150 billion is awarded each year by the U.S. Department of Education, which helps millions of students enrolled in college. The money can be used for tuition, fees, room and board, textbooks, transportation, and even electronic needs like computers and printers. For money that needs to be repaid, such as loans, it is wise to borrow only what is necessary in order to avoid excessive debt after graduation.

There are three main types of federal student aid: loans, grants, and federal work study. Other types of aid include scholarships, tax credits, and aid from the military.

Federal Grants

Grants are monetary assistance from the federal government, and they don’t need to be repaid. Grants are awarded based on financial need. The four main types of grants are:

  • Federal Pell Grants: These grants are given to qualified undergraduate students based on financial need. They are the most common type of grant awarded. Factors that contribute to students’ award amounts include whether they go full- or part-time; whether they plan to be enrolled for the entire school year; and their school’s tuition costs, fees, room and board.
  • Federal Supplemental Education Opportunity Grants (FSEOG): These grants are given to students with extreme financial need. The school’s financial aid department decides how much is awarded and how much they are able to spend on these grants.
  • Teacher Education Assistance for College and Higher Education (TEACH) Grants: These grants are awarded to students enrolled in a teaching credential program who plan to work in low-income private or public schools after graduation.
  • Iraq and Afghanistan Service Grants: These grants are given to students whose parents died overseas in Afghanistan or Iraq while in active duty. The students must be 23-years-old or younger and must have been enrolled in college at the time of the parent’s death.

Federal Work Study

Federal Work Study is a program that allows students to work on campus for pay. These students are given priority over students not in the federal work study program. However, the amount of hours each student is eligible for within the program varies. Students are able to work more than the maximum granted as long as there is need within the particular department.

Federal Loans

Students often use loans to supplement what they have received from grants, scholarships, work study, and family assistance. There are two types of federal loans available to students:

  • The Federal Perkins Loan Program: These loans are available to undergraduate and graduate students who have financial need. The loans have a relatively low interest and are distributed based on the available funds of the individual college.
  • The William D. Ford Federal Direct Loan Program: As opposed to the Perkins Loan, these loans come directly from the federal government. Both students and parents are able to take out these loans on behalf of the enrolled student. Student loans, called Direct Stafford Loans, can be subsidized or unsubsidized, depending on the student’s financial need. The parents’ loan, called the Direct Plus Loan, is always unsubsidized. Students and parents are responsible for paying the interest on their loans, though subsidized loans don’t accrue interest while the student is in school or in deferment.

Other Types of Student Aid

Students who need additional aid have some options available to them. Many schools and private organizations grant scholarships each year to students based on varying criteria. Such criteria can include the student’s intended major, his or her ethnicity, grades, hometown, and even height (such as the Tall Man’s Scholarship). While many scholarships only give students a small amount of financial help, there’s no limit to the number of scholarships a student can apply for.

Some students may also be eligible for financial assistance through their employer. Employers sometimes grant tuition assistance to workers who are pursuing advanced education in their current field. Employers see their contribution as a way to maintain a positive relationship with their employees, as well as to make their workplace as strong and efficient as possible. Employees are often able to move up or receive higher pay once they’ve completed their education.

While this option isn’t as financially secure as others, banks also often provide students educational loans. These private student loans will have a much higher interest rate and will generally accrue interest during the student’s time in school. Bank loans are most often given from large banking institutions. For students who attend technical school, or who are enrolled in a program with rather guaranteed job placement post-graduation, they may find bank loans beneficial in order to get the education they need.

Most students use some type of financial aid to pay for school, whether it be through the federal government or through other types of outlets. Often, one student will receive assistance through more than one aid program, thus allowing him or her a greater chance of being able to graduate from school.



Free Application for Federal Student Aid (

Federal Student Aid: An Office of the U.S. Department of Education (

CODiE2009 SIIA CODiE WINNER Best Online General Reference Service
CODiE2010 SIIA CODiE WINNER Best Online Consumer Information Service