What are the components of financial aid packages?

When you begin looking for sources of financial aid you want to look at all potential sources including grants, loans and scholarships. The college you wish to attend can provide a financial aid package that is comprised of several components necessary to help you choose the programs that are right for you. It's important to review everything in the financial aid package and do not hesitate to apply for all programs for which you qualify in order to obtain the highest awards.

Contents of a Financial Aid Package

Since most students, and even their parents, do not understand everything they need in order to file for financial aid, the financial aid offices make up packets that consist of several components. These packages provide students with everything they need in order to apply for financial aid. It's important for students and their parents to understand how each component works in order to choose the financial aid package that suits their needs. The most common components of a financial aid package include the following:

Grants

Of all the financial aid options, grants are the best. While they may only subsidize a portion of a student's education, grants are "free money" that does not have to be repaid. Most financial aid packages include instructions for applying for grants from the university and the federal government unless the financial aid officer knows an individual student does not qualify for financial assistance.

Scholarships

Scholarships are like grants in the respect that they do not have to be repaid. The majority of scholarships are merit-based and come from various corporations and organizations that have no affiliation with the college or university. However, some colleges and universities do offer some scholarships that are based on both need and merit but usually have specific requirements which may include maintaining a minimum GPA to remain eligible. Unfortunately, third-party scholarships usually decrease the amount of financial aid you can receive from other sources unless the college uses the funding to first decrease your eligibility for loans and work-study programs.

Student Loans

The financial aid package will also include information about student loans. One good thing about obtaining a student loan instead of just an ordinary loan is that students do not usually have to begin repayment until after graduation, and federally sponsored loans such as the Stafford Loan or Perkins Loan do not require payments to begin until six to nine months after graduation. If a student does not qualify for a federal loan or it is does not provide enough funding for his or her college education, there are also private student loans available. You will not find information on these loans in the financial aid package, however; the students and their parents will need to conduct their own research.

Work-Study Program

Federal work-study programs are available at 3,400 institutions of higher education for those students who qualify. Under the work-study option a student can work part-time at an approved job and use the earnings for some of their educational expenses. The disadvantage is that students are limited in how much they can earn each year.

Aid from State Programs

Some states also offer funding for students who attend accredited colleges and universities. These awards are usually focused on students who both live and attend college in that state and may include scholarships, grants and loans.

It is essential for students and their parents to review all the information in the financial aid packages before they even begin filling out any of the forms. This will save time and allow them the opportunity to choose the programs that can provide the highest subsidy for an individual student.

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