Four Types of Financial Aid to Help Pay for College

Financial aid can turn college dreams into reality by funding tuition, books, and materials. As you begin to look into available degree and certificate programs, you also want to consider your options for financial aid. You may find that you qualify for different types of aid based on your circumstances. 

What Is Financial Aid?

Financial aid is supplemental funding that can help cover the cost of enrolling in a degree program. Aid can consist of loans, scholarships, grants, or work-study programs.

Most college students require some type of financial aid, as many cannot rely solely on personal savings or family wealth to pay their tuition and fees upfront. As a result, there are a variety of resources available to help students understand their financial aid options and which kind of financial aid package is best for their needs.

What Does Financial Aid Cover?

Financial aid can cover any costs associated with earning a degree or certificate at a college. Depending on the type of financial aid you secure and the college that you choose to attend, you may be able to use it to pay for tuition, fees, books, housing, technology, or transportation.

What You Need to Know About Student Loans

Student loans are commonly used to finance the costs of higher education. According to the National Center for Education Statistics, nearly 38 percent of full-time, degree-seeking college students relied on student loans during the 2020-2021 school year. While that number is substantial, it's worth noting that the number of students applying for and using student loans decreases with each passing year.

There are two main types of student loans: federal student loans and private loans. Most financial experts recommend that college students maximize the number of federal student loans available first before seeking private loans, as federal loans do not require you to have an established credit history.

If you choose to take out a student loan to finance the cost of education, it's crucial to know that repayment is required. Before accepting a federal student aid package or a private student loan, you should feel comfortable with the loan terms (including interest accrual) and the repayment deadline.

Grants for Higher Education

The U.S. Department of Education offers various grants for college students that help cover the costs of their degree or certificate program. Grants do not have to be repaid, making them particularly valuable for students.

There are three types of grants available to college students through the U.S. Department of Education:

• Discretionary grants – Awarded through a competitive process to qualifying students
• Student grants – Awarded to college students based on financial need
• Formula grants – Awarded to students based on formulas that Congress determines. There are no applications for formula grants.

Applying for Scholarships

Scholarships are a form of financial aid provided to students through various governmental agencies, nonprofit organizations, private corporations, and colleges. Similar to grants, scholarships do not have to be paid back.

Start searching for scholarships early – there are thousands available. Some are based on financial need, while others are merit-based. There are also scholarships for diverse students, including those from a particular background or culture, those studying a specific field, or those who have completed extensive community service.

Exploring Military Aid

There is federal student aid available to military families in the form of scholarships and grants. Active-duty service members, in addition to veterans or those interested in the military, should explore their options for financial aid.

Benefits and Eligibility

According to the Federal Student Aid office, military aid for college is available to veterans who have served, active-duty military personnel, and students considering entering the military. Additionally, family members of veterans and active-duty service members may be eligible for military financial aid programs.

The most well-known types of military aid include:

• ROTC scholarships – The Army, Air Force, and Navy offer ROTC scholarships to students pursuing high-need degree programs and may be interested in a military career. ROTC scholarships are merit-based programs.
• VA education benefits – Veterans, surviving spouses, and family members may be eligible for financial aid through the Department of Veterans Affairs.
• Service grants or Pell Grants – Students whose parent or parents died as a result of military service in Iraq or Afghanistan may be eligible for grant funding for their education.

Employer Tuition Assistance

Students working full or part-time may find that their employers provide tuition assistance. Tuition assistance programs can help offset the cost of your degree or certificate program while allowing you to acquire relevant competencies for your current career.

Applying for Different Types of Financial Aid

To determine what type of financial aid package would be best, you want to start by filling out the Free Application for Federal Student Aid form, aka FAFSA form.

What Is the FAFSA Form?

The FAFSA form is a free application through the Federal Student Aid office. Once you have completed the form, your college will utilize the provided data to award you a financial aid package. The criteria for determining your package may include your income level, financial need, and expected family contribution (EFC). You must fill out the FAFSA form every year you are enrolled (or EFC).

Know Your Deadlines

Submitting your FAFSA form on time ensures you receive the maximum financial aid package. It is recommended that you submit your form by October 1 of the year before the academic year in which you plan to enroll. However, the official FAFSA deadline is June 30 of the current academic year in which you are enrolled.

Need-Based Aid vs. Merit-Based Aid: What's the Difference?

Need-based financial aid is available to students who qualify based on their income level or demographic data. Merit-based aid, on the other hand, is available to qualifying students based on their grade point averages or accomplishments in a particular activity.

How to Maximize Your Aid Award

You can maximize your financial aid package by pursuing as many scholarships and grants as possible before applying for federal student aid, as this ensures you do not take out more loans than necessary.

When and How Will You Receive Financial Aid?

You will receive a financial aid package after being accepted to the college you applied to. The package will be based on the data available in your FAFSA form, and it will be broken down into money that does not have to be paid back, money that must be earned through work-study, and money that must be paid back.

What If Your Financial Aid Is Not Enough?

You may need to take additional steps to supplement the financial aid you receive. This can include:

• Working part-time
• Developing payment plans with your college or university
• Securing private loans

Repaying Your Financial Aid

If you take out student loans, you will be required to repay your financial aid. Repayment on federal student loans begins six months after you graduate from college or stop taking classes. Private student loans may have different terms that require you to pay them back while still attending school.

What Factors Affect Your Financial Aid Eligibility?

The financial aid package you receive will vary based on a variety of criteria, such as:

• Family income, assets, and household size
• Number of family members attending college simultaneously
• Academic performance and achievements
• Changes in family circumstances, like unemployment or medical expenses

Receive a Premier Education for Less

College should be an experience that is accessible to everyone, which is why Champlain College Online offers high-quality degree and certificate programs for a lower cost than many other schools. At CCO, we help reduce the cost of a college education by maintaining low tuition rates, eliminating excessive fees, and allowing you to transfer credits based on your previous experience. Learn more about paying for school at Champlain.