Longview High School
Longview, Texas

This page was last updated on
09/18/2008 03:07 PM

 Types of Financial

Aid

Loans – Refers to money that you or your parents borrow for your college education that must be paid back. Educational loans are usually offered at lower interest rates than other types of loans offered by banks and other private lending institutions. Some loans require that you start paying the principle back immediately. You pay a certain amount each month until the loan is paid off. Other loans permit you to wait until after you graduate to start paying the balance back. Lending institutions include the state and federal government which offers the Perkins Loan, the Stafford Loan, and the Plus Loan. Your eligibility for specific loans is based upon the responses that you provide on the  FAFSA form. Like other loans if you default on (fail to repay) a government loan, your credit rating and your ability to receive future loans (such as a new car loan or a mortgage loan for a home) are negatively affected. Defaulting on a loan could also result in the withholding of federal income tax refunds.

Grants – Constitute money that you are given based on financial need only that never needs repayment. A grant is basically money that is ear-marked for education expenses for students who need help paying college expenses. Various organizations, colleges, universities and corporations, including the U S and state governments offer grants. The information you provide on the FAFSA determines your eligibility for a grant. You must maintain certain specific criteria to stay eligible for the grant money. If you fail to maintain your eligibility, you forfeit the grant money and in some cases must pay a refund. Each grant will come with its own unique set of guidelines. Well-known grants include the Pell Grant and the Family Supplemental Educational Opportunity Grant (FSEOG).

The Work Study Program - Allows students to work at a job on the school campus. The salary that the student earns can be used for educational expenses.

Scholarships – Provide free money that is based on academic achievement, leadership skills, volunteerism, and/or financial need.  You don't have to return/pay back scholarship money. Individuals and corporations may offer scholarships and each may set their own eligibility criteria. They pick the recipient by evaluating the responses on an application that they prepare for applicants. The person or organization also determines how, as well as when, the money is paid to the scholarship recipient (winner).

Many colleges and universities have early financial aid AND scholarship deadlines that are approaching fast. What's the difference? Isn't a scholarship a kind of financial aid? It sounds confusing, but here is a way to keep it all straight. Remember that financial aid comes from a variety of sources--the federal government, the state government, the college or university, and individuals or businesses. All government entities as well as colleges and universities (and some businesses and organizations) use the information that you provide on your FAFSA to consider you for need based financial aid. Need based financial aid is awarded according to your family's economic status as it is reported to the Internal Revenue Service. Several other factors, such as family size, the number of dependent children already in college, are considered as well. None of this information can be submitted until after January 1, of the year in which you intend to enter college, usually the fall after you graduate from high school. So why do some colleges have financial aid deadlines before January 1st? These colleges have scholarships available to them that are not dependent upon a student's economic status but rather their academic standing. These scholarships are referred to as non need-based scholarships or academic based scholarships. Even though you may think that your grades might hinder you from selection for such a scholarship, it is important that you go ahead and meet the college's financial aid deadline. Applicants can never know exactly what scholarships they are considered for and your college just might have a particular scholarship for which you meet all the criteria. Some philanthropists are specific in making sure that the recipient of their scholarship is not the top student in the graduating class. Some organizations specify that its recipient is not in the top 10% of the graduating class. For this reason, you should make sure that you                                                DON'T MISS THE FINANCIAL AID DEADLINE!

NOW is the time to visit the websites or read the bulletins (catalogs) of those colleges and universities that you are considering applying to for admissions. Complete the portions of the financial aid form that you can. Then, as soon as you can after January 1st, submit your FAFSA. After the college receives your FAFSA information, then you are considered for the need based financial aid that a particular college has to offer. Important:  Don't feel that you are committing to attending a particular institution by applying for their financial aid. Just as you can apply to more than one college or university for admissions, you may apply for financial aid at several different institutions. If you are awarded financial aid from more than one institution, you will have time to consider each one and either accept or decline the scholarship offer at a later date. By doing this you can select the best financial aid package rather than settle for what only one college offers.

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