FAFSA application on desk

4 Types of Financial Aid to Help Pay for College

Sonya Krakoff

Once you've decided to go back to school, your next big step is determining how you are going to pay for your education. This process can feel daunting: there are many financial aid options for college, and it's hard to know which one is right for you. If you're starting to think about how to get financial aid for college, here are 4 types of financial aid to consider.


Types of Financial Aid for College


Loans are one of the most common college financing options. However, not all loans are the same, and there are two different types of student loans for college: federal and private. There are significant differences between the two, so it's important to have a clear understanding of what each type entails.

Federal Student Loans

The U.S. Department of Education offers a federal student loan program called the Direct Loan Program. This program is widely used, and offers multiple loan options which are based on degree level and financial need. Loans are also available to parents of dependent undergraduate students and to those who do not demonstrate financial need.

Federal student loans are a good option for many students, as they give students a way to cover the cost of education at relatively low, fixed interest rates, and offer flexible repayment options to help students afford their monthly payments.

You can learn more about federal loans, including your eligibility for certain programs, on the Federal Student Aid website.

Private Loans

Private student loans, as the name implies, are granted by private lending institutions, such as banks, credit unions, or state agencies. In general, students should only consider private loans as a supplement to federal loans and other financial aid, as private loans are less regulated and tend to cost more to the student over the long term, due to higher or variable interest rates.

However, the reality is that federal loans will usually not cover the full cost of a student's education, and most students will need to find one or more additional sources of aid. While students should try to explore all other options first, if used sparingly, private loans are an important resource to help students meet their educational goals.


Grants, unlike loans, are a form of financial aid that students do not have to repay or pay interest on, and can be used to cover any education-related expenses, such as books or housing, not just tuition. They can come in a number of different forms, with the two most common being the federal government grant and the state government grant.

Federal Grants

Federal grants are primarily accessible to undergraduate students demonstrating significant financial need. They will be offered to students who meet eligibility guidelines upon completion of the FAFSA (Free Application for Federal Student Aid). The amount of aid awarded will be dependent on factors such as enrollment status, cost of attendance for the institution the student is applying to, and financial need.

Graduate students in certain fields, such as teaching, and the children of Iraq or Afghanistan veterans may also be eligible for certain federal grants. A full list of federal student grant programs can be found here.

State Grants

Most U.S. states and territories have their own higher education agencies which usually offer some form of need-based grant to resident students. Like federal grants, the amount of aid available to each student will depend on their financial need and the cost of attendance for their school of choice. State aid programs, since they are more limited in scope, are also often first-come, first-serve, so students interested in participating will need to do their research and gather their materials early.

Eligibility will vary by state, so it's important to look into your own state's requirements. A full list of state agencies can be found here.

Military Aid

If you are a service member, veteran, or the spouse or child of a service member or veteran, chances are, you will be eligible for some form of military-specific financial aid.

There are many programs available to members of the armed services and their families, including:

  • Tuition assistance programs to help offset the cost of tuition or education-related expenses, with programs and eligibility varying by service.
  • The GI Bill, which offers educational benefits to both active-duty service members and veterans.
  • Benefits on federal loans, such as limited and lowered interest rates, no accrual of interest, and deferment options.
  • Military-specific scholarships through organizations such as The American Legion and the Reserve Officers' Training Corps (ROTC).
  • Tuition discounts through institutions of higher learning participating in the Yellow Ribbon Program.


These are just a few of the programs available; a more comprehensive list of educational programs for service members and veterans can be found here.

Eligibility for this aid is program-dependent, so be sure to contact the financial aid office or the veterans' services office of the school you're planning on attending to discuss your military financial aid options.

Employer Tuition Assistance

Many organizations are recognizing the benefits of investing in their employees through employer tuition assistance programs. These can take a few different forms, but generally fall into one of two categories: college-business educational alliances and tuition reimbursement.

Educational Alliances

This benefit consists of a partnership or agreement between an organization and an institution of higher learning (often online) to allow the employees of that organization to enroll at significantly discounted rates. These types of programs are a win-win, giving employers a better-educated, well-trained workforce and giving employees access to high-quality, affordable education options.

Employer Tuition Reimbursement

Many employers offer eligible employees (typically, those who have worked for the organization for a certain period of time) reimbursement for taking college courses. Usually, this amount does not cover the full cost of tuition, and will usually come with a per-annum and/or lifetime cap. However, when combined with other sources of financial aid, this is a great way to help students graduate with less debt and minimal out-of-pocket expenses.

About the Author

Sonya Krakoff

Senior Content Marketing Specialist

Sonya Krakoff is the Senior Content Marketing Specialist at Champlain College Online, where she is the voice behind the CCO blog and helps tell the school's story across multiple digital platforms. Sonya has extensive experience in writing, content marketing, and editing for mission-driven businesses and non-profit organizations, and holds a bachelor's degree in English (with a focus on creative writing) from St. Lawrence University.

Request Information

Connect with our admissions team to learn more about Champlain College Online.

Sunset over Lake Champlain from Champlain College campus in Burlington, Vermont

Request Information

Champlain College will not share or sell personal information. Submitting this form constitutes your express written consent to agree to receive e-mails, texts, and phone messages from Champlain College at the phone number(s) and email address provided in this form.