Most of us know financial aid as money that can help pay for colleges costs, but exactly what does it include? Generally, financial aid encompasses three main types of funding: (1) grants and scholarships, (2) federal work-study, a program that allows college students to earn money through part-time jobs, and (3) federal student loans, which require repayment, but not until after graduation. Grants and scholarships are the best kind of financial aid because they don’t need to be repaid, hence their designation as “gift aid.” Here’s what else there is to know about them:
How They’re Awarded
Though grants and scholarships are similar, how students receive them can differ. Grants are often given to students based on their financial situation, as determined by their FAFSA (and other financial aid applications), and fall into the category of need-based aid. Financial aid offices manage their distribution. Scholarships, on the other hand, are often classified as merit-based aid, and are awarded to students, usually by the admissions office, based on an achievement (like standout high school grades) or skill (such as athletic or musical prowess). Sometimes a separate application is required.
Where They Come From
Grants and scholarships that appear on a student’s financial aid offer can come from a few different sources: the federal government, the state government, or the college itself. The Pell Grant, the Federal Supplemental Educational Opportunity Grant (FSEOG), and the TEACH Grant are all funded by the federal government, while the MASSGrant and Gilbert Grant are just two examples of grants provided by the Commonwealth of Massachusetts. Colleges and universities have their own names for the grants and scholarships sourced by their own funds.
In addition to the grants and scholarships awarded by the college, there are thousands of organizations across the country that provide private scholarships to students to help pay for college costs. These can come from non-profits, associations, community groups, companies, or any other type of organized group. Private scholarships have their own application process and might require the submission of an essay, video, letter of recommendation, or other material. Private scholarship funds are sent to the college where the student attends or directly to the student.
Renewability
Grants and scholarships awarded by the college are often renewable for four years as long as the student meets certain criteria, such as maintaining a minimum GPA and/or enrollment of part-time or full-time status. Students may also need to pursue a degree within a certain major or complete other requirements, such as community service. And students who receive any need-based financial aid will need to submit the FAFSA and qualify each year based on their family’s finances. Private scholarships are often awarded on a one-time basis, but certain types of funds might have the option for renewal. Check with the scholarship agency for details.
To learn more about financial aid for college, review our dedicated webpage, Financial Aid & Scholarships, or watch our recorded webinar, Financial Aid 101.
