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It takes a lot of hard work and effort for students to find independent scholarships that will help them pay for college. However, schools can only disburse a certain amount of academic scholarships and grants, which often leaves students with not enough money to cover the total cost of college. If you find yourself in this type of predicament, knowing about the variety of available federal financial aid options can help you determine the best way to pay for your college education.  

• Federal Pell Grants: With a limited supply of funding, you will only receive a Federal Pell Grant if you fill out your FAFSA application prior to their deadline, and can demonstrate significant financial need. Federal Pell Grant funding has been increased in recent years and students do not have to pay back the grant they receive.
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• Federal Stafford Loans: There are two types of Stafford Loans, one with and one without consideration of financial need. With subsidized loans, the federal government pays the interest while you are in school, and with unsubsidized loans the borrower is responsible for paying the interest. 
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• Federal Perkins Loans:   You must financially qualify to receive a Federal Perkins Loan. This type of loan is offered by the federal government through your school and is funded by the federal government at a fixed five percent interest rate. The school pays the loan interest while the student is enrolled.
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• Federal PLUS Loans:   There are two types of Federal PLUS Loans, Parent PLUS and Grad PLUS.
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• Parent PLUS Loans:  These loans are offered to your parents, but are not based on financial need. Your parents can borrow enough to cover the student’s cost of attendance, less other financial aid received, at low, fixed interest rates.
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• Grad PLUS Loans:  As a graduate student, the cost of college increases significantly, while the amount of available aid tends to decrease. A Grad PLUS Loan is just like a Parent PLUS Loan, but the student borrows the money in their own name.
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• Work-Study Program:  This federal program gives students the opportunity to reduce their loan requirements by working part-time while attending school.
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• Military Services: There are benefits of committing yourself to military service, including assistance in paying for your college education.  Learn about the GI Bill, as well as other terms that are offered by different military organizations. 

When applying for financial aid, there will be many terms that may not be familiar. Get a better understanding of what the terminology means, as well as a grasp on the entire financial aid application process by understanding the financial aid terminology.

Financial, Tax and Legal Disclosures

NextStudent does not offer tax, legal or investment advice.  Nothing contained herein is intended to serve as tax, legal or investment advice.  We urge you to consult with experts in these fields before taking any action based on the information contained on our site.