College Financial Aid
What is College Financial Aid?
College financial aid is an assistance program for students who wish to take up further education but are constrained with finances. Students can avail different types of financial aid programs depending on their needs and requirements. College financial aid can take the form of scholarship, grants, loans, and/or work-study program. These are offered by different sources. Scholarships and grants are like gift money which does not have to be returned whereas loans have to be paid once a student graduates and starts to earn.
Who Offers College Financial Aid?
College financial aid is offered by two main sources – private and government. Financial aid offered by the government to students is the best form of aid as it offers students the lowest interest rate and has lenient terms and conditions for payment. It also allows students deferred payments which mean that students who cannot afford to pay back the loan while studying can do so once they have graduated. Moreover, they allow students a grace period of about six months to graduate and find a job before asking them to start repaying the loan.
There are different types of loans and scholarship programs being offered to students by the government. These include Stafford loans, Perkin loans, Direct PLUS loans, Parent PLUS loans, Pell Grant, and FSEOG.
Private college financial aid on the other hand has more stringent terms and conditions and offer higher-than-government student loans’ interest rates. They also require students to produce a co-signer and must have a good credit history to qualify for the loan. They offer higher borrowing limits but are strict about their policies of repayment. Private college financial aid is offered by banks and financial intermediaries.
How to Qualify for College Financial Aid?
Students need to show their need for finances to be able to get federal financial aid. Those who do not have financial constraints will not be awarded federal financial aid. Furthermore, students need to submit the completed Free Application for Student Aid (FAFSA) before the deadline to the financial aid office of their institute to qualify for the federal financial aid program.