Four Types of Financial Aid

There are four (4) types of financial aid available – grants, loans, scholarships and work-study.  These funds are available through the federal government, state, colleges and private organizations.

Students can begin applying for financial aid from the federal government and colleges around the same time they are applying for college as a high school senior. Private or outside scholarships for college are available to students as early as 8th grade.

The first step in accessing federal financial aid is completing the Free Application for Federal Student Aid (FAFSA). The application becomes available in October of your senior year in high school. Many private colleges (about 250 of them) use the the CSS PROFILE to award institutional funds.

It is important to note that some financial aid will be awarded on a first-come, first-served basis. Applying early for financial aid will ensure you get the most money available to you. Check each college’s website to learn the financial aid deadlines, including priority deadlines.


Here are the 4 types of financial aid available to fund college:


Grants can come from federal government, state or the college itself. This is considered gift-aid and does not have to be repaid. Some federal grants available are:

  • Federal Pell Grant
  • Federal Supplemental Educational Opportunity Grants (FSEOG)
  • TEACH Grant
  • Iraq & Afghanistan Service Grants


Scholarships are considered gift aid that does not have to be repaid. They have many criteria that must be met for award and renewal. Most scholarships are awarded based on financial need or merit (for e.g., academic achievement, athletic talent and musical talent).

Scholarships can come from state government, colleges, private companies, religious groups, foundations and other private and non-profit organizations. The scholarships awarded by colleges are often referred to as “institutional” scholarships; those awarded by organizations other than a college are considered “outside” or “private” scholarships.

To apply for many of these scholarships, students have to meet specific criteria. Some of the criteria might include GPA, leadership, college major, financial need, membership in a specific organization, resident of a specific state, first-generation student, and minority students to qualify.

The majority of the high-dollar scholarships are awarded through colleges. In some cases, all a student has to do is to submit a college application to be considered for scholarships. In other cases, a separate application is needed. To learn more about scholarships awarded through colleges, check the colleges’ website for more information.

To find scholarships available outside of colleges, here are some great online scholarships databases to conduct your search:


Student Loans are considered self-help financial aid that has to be repaid. Loans are available through the federal government, colleges, banks and other private institutions. Here are the different types of federal loans available to undergraduate students and parents:

  • Subsidized loans are available for students that demonstrate financial need. While students are in college, the federal government pays the interest on the loans. Upon graduation, students must begin repaying the loan with interest.
  • Unsubsidized loans are available for all students. The difference between this loan and subsidized loan is the government does not pay the interest for students. Students have two options to meet their obligation — pay the interest while in college (the recommended option); or allow the interest to accrue while in college and begin repaying with principal after graduation (not recommended).
  • Parent Plus Loans are available to parents of undergraduate dependent students. Parents must pass a credit check to be eligible to receive these loans. Students whose parents do not qualify for Parent Plus Loans can become eligible for a additional subsidized loans.


These are part-time employment that gives students an opportunity to earn income. These jobs are available on campus and, in some cases, off-campus. Work-study jobs are not guaranteed, you must apply for these positions.

For more information about federal student aid, please visit the Department of Education Federal Student Aid.


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