Financing Your Future-A Student's Guide to Grants, Loans, Scholarships, and Work Study

This is a guide by Online MBA.

Education is a valuable asset for learning new skills and promoting future success, but the rising costs of tuition and fees has made many people reconsider continuing in their educational goals. Fortunately, there are many resources available to help offset some of the costs associated with a college education. Financial aid is money that is available to students and is meant to alleviate some of the financial stress associated with higher education. Various agencies, both federal and private, readily provide funding that is used to pay for tuition, fees, books, and other expenses for those students who qualify. Financial aid comes in several forms, depending on the background of the student, the amount needed, and the student’s ability to contribute to costs.

Achievement based aid is a type of financial aid that is awarded to potential students who have thrived and shown success in a particular area. Achievement based aid is often supplied for those candidates that are particularly promising toward fulfilling their educational goals. Types of achievements considered for this kind of aid include such backgrounds as maintaining a high grade point average, scholastic awards, volunteer work, or athletic abilities. There are many types achievements considered, and the requirements are provided by the funding agency or endowment supplying the financial aid. While achievement based aid can be very competitive among students, there are a variety of different options within achievement based aid that students should consider, each scholarship or award is extremely specialized based up on the providing organizations focus.

Need-based aid is another type of financial aid that is given to students who show a substantial need for college assistance. Typically, applicants must usually give proof of their financial status in order to receive this kind of funding. Candidates for need-based aid may be recognized because of low-income levels, economic hardship, or other circumstances that may prevent them from attending school without some form of assistance. Both federal and private programs provide need-based aid for applicants who qualify.

Grants
Grants are set amounts of money given to qualified students to pay for expenses related to their education. Grant money does not have to be repaid. It can come from several sources, including federal or state government grants or private endowments. To obtain money from educational grant, students must begin by filing a Free Application for Federal Student Aid (FAFSA). This application will give a background of the student’s financial abilities, and can match students with potential grant money they may be qualified to receive. Most schools have information about the FAFSA through their financial aid office and the application is also available online. The Tuition Assistance Program (TAP) is another method of matching candidates with potential donors and is offered in the state of New York, however, there are similar programs in a variety of other states. Examples of federal grants include the Pell Grant and the Federal Supplemental Educational Opportunity Grant, both of which are based on financial need. The United States Department of Education lists many grants available for various educational backgrounds and goals. Many colleges also offer grants to qualified students, and these may be based on either financial need or achievements. Students may also consider grants from leaders in their intended career field, leaders in business may offer promising students in their particular field to both encourage education and scout new talent for future employment possibilities.

  • U.S. Department of Education: Many different educational grants available from the federal government, with instructions about the application process.

  • FAFSA: Information and the online application for the Free Application for Federal Student Aid.

  • Student Aid on the Web: A description of the TEACH Grant program, a funding opportunity for students pursuing a degree in education.

Loans
Student loans include types of financial aid that provide money upfront to pay for educational expenses. Unlike grants, student loans must be repaid, regardless of educational outcome. The loan is secured through a lending agency and is repaid through a payment plan, usually with interest attached to the initial loan amount. The percentage of interest on a student loan varies, but there are several institutions that offer lower rates for students, usually with interest rates around 5-8%. Interest rates can be considered fixed, meaning the amount of interest is set for the length of the loan repayment. Loans can also have a variable rate of interest, which means the interest amount can fluctuate throughout the life of the loan. Repayment typically is offered over the course of several years, and these loans are available through federal agencies and private organizations. For example, the Federal Perkins Loan and the Stafford Loan provide money for school at a low rate of interest for repayment, although certain requirements may apply, such as maintaining a specific enrollment status throughout the lending period. The Federal Plus Loan is offered to students and their parents if the student is still considered a financial dependent. Many private institutions also offer student loans, and applicants should check carefully for the best rates of interest and repayment options to fit their particular needs.

  • Education Loans: A listing of several different loan programs available from the federal government, as well as their details and eligibility requirements.

  • Nursing Education Loan Repayment Program: A program that offers repayment of student loans for nurses that are willing to work for two years in specifically designated settings. The program pays up to 60% of student loans incurred by nursing students.

  • Choose Your Future: A comparison of some of the different types of loans available to students for education from both federal and private sources, and how to choose a lender.

Scholarships
Scholarships are awarded to students based on a variety of different factors related to the nature of the scholarship. Scholarships are set amounts of money that are gifted to students and is not expected to be repaid. Criteria for eligibility can include such achievements as educational background, maintaining a high grade point average, displaying exceptional athletic abilities, or leadership and community involvement. Some scholarships are offered to students with specific ethnic, cultural, or family backgrounds and funded by community organizations that hold a specific set of values and often emphasize on cultural identity and achievement. Thousands of scholarships are available through private institutions and endowments, each specifically tailored by the funding organization or business. Students may begin to apply for scholarships by first filing a FAFSA to determine which awards they are the most qualified for. The amount that is awarded can vary considerably depending on the parameters of the award and the organization sponsoring the scholarship. Most schools have information available on various scholarships at their financial aid office, this is a good starting point for finding information about accessible scholarships. Colleges and Universities frequently offer scholarships specifically for their attending students, these scholarships, while very competitive, are offered to a limited student population and are often easier to obtain then a nation or statewide scholarship.

  • Udall Scholarship: Providing 80 scholarships of up to $5,000 each for students pursuing an education in environmental related studies.

  • Hollings Scholarship: A scholarship for undergraduate students that requires a minimum grade point average of 3.0. Qualified students must be considering a course of study in the atmospheric or oceanic sciences or related fields.

Work Study
Work study programs allow students to earn money for school while working part time in an employment position, usually at a position on the college campus or a satellite. A work study job is usually related to the field of study that the student is pursuing, which gives them a chance to practice and learn skills in their chosen field, outside of the classroom, benefiting both the student and the university. Many schools offer work study programs and students can obtain information about available jobs through their specific department, or the financial aid office. Work study jobs provide income for students that is earned and does not need to be repaid. In situations where there are limited positions available, students may be chosen for a job based on their financial need or on a first-come first-served basis. In these situations, acceptance into work study jobs becomes competitive and students should file a FAFSA before applying to ensure the best fit for the program. Work study offers a positive opportunity for students to get their feet wet in their chosen profession, and work with others through community service. This also helps build community ties and may benefit the student when applying for financial aid and scholarship programs.

  • Americorps: A work-study program that allows students to work in community based services in exchange for tuition reimbursement.