Types of Financial Aid
There are four basic types of financial aid. They include:
- Grants - A grant is one of the most desired forms of financial aid because it does not have to be repaid. Grant money can be used for tuition, room and board, books, and other school expenses. Grants are typically awarded to students who are financially needy. However, there are some academic-based grants available. Grants may come from a school or from the local, federal, or state government. One of the most well-known education grants is the Federal Pell Grant.
- Scholarships - Like grants, scholarships do not have to be repaid. Although some scholarships are reserved for financially needy students, there are just as many that are awarded based on academic merit, athletics, music abilities, academics, group affiliations, etc. Many schools offer special scholarships to students. Scholarships can also be found through professional organizations, associations, corporations, and other special interest groups. Students should begin their scholarship search locally before seeking national level scholarships. There is often less competition for local scholarships. Speaking with a school's financial aid office can also yield a great number of scholarship opportunities. Business students may also want to check out this list of 10 Professional Organizations That Offer Scholarships.
- Student Loans - Student loans are a less desirable form of financial aid because student loans must be repaid. Students who take out a loan will need to repay everything they borrow in addition to interest. The cost to borrow is often dependent on the type of loan as well as the lender. Loans may be subsidized or unsubsidized. The interest on subsidized loans is paid by the government while the student is enrolled in school and sometimes beyond. The student pays the interest on unsubsidized loans. The type of loan that you qualify for is based upon your financial need. Before borrowing from a private lender, students should fill out the Free Application for Federal Student Aid to see if they are eligible for a low-interest government loan.
- Work Study Programs - Most schools offer a work-study program to help students pay for school. Although every institution has different policies, most are willing to waive tuition and fees or compensate students in exchange for a few hours of work each week. Students may work on-campus or off-campus and may be paid be the school or through a government program. Many schools will arrange for students to work in a job that is within the students' field of study or interest.
There is one other type of financial aid available. This form of funding is very common among business students. It is commonly known as tuition reimbursement or employee-sponsored funding. This type of aid works differently because it is not always given to a student prior to enrollment. Oftentimes, students are required to pay for their education upfront and are reimbursed later by their employer. Getting your employer to pay for part or all of your business education can take much of the burden off of your shoulders. However, most employers will ask for something in return. They may want you to work for them for a certain number of years after graduation or they may expect you to take a lower salary in return for their assistance. Before agreeing to tuition reimbursement, make sure you fully understand what will be expected of you while you attend school and after graduation. Read more about tuition reimbursement.
Applying for Financial Aid
More than 70 percent of students receive some type of financial aid. Almost everyone is eligible. To begin applying for aid, you should fill out the Free Application for Federal Student Aid (FAFSA). Further application procedures will vary depending upon which school you are applying to. Most colleges have financial aid officers that can assist you with this process. You can also check out this tutorial on how to fill out the FAFSA.
When to Apply for Financial Aid
You should apply for aid when you are applying for admission to a school. Deadlines will vary depending upon the school. Consult your schools of choice as soon as possible to get exact dates. Ideally, you want to apply for financial aid at the beginning of the year. January 1 is the first day you can apply. Aid is generally awarded on a first come/first served basis. If you do not apply for aid soon enough, you may miss out on funding opportunities. This financial aid checklist will provide you with a list of the documents you need to apply for financial aid.