Once a college has determined a family’s demonstrated financial need, the financial aid office puts together a package of financial resources that allows families to meet all or part of that need. Below are the components of a typical need-based financial aid package.
Scholarship or Grant
This category includes all aid money that does not have to be paid back. Colleges award grants from their own funds. Some states also have grant programs, and the federal government issues two types of grants: Pell Grants and Supplemental Educational Opportunity Grants.
This is money, provided at reasonable interest rates, to be paid back by the student or parent/guardian after the student leaves college. Many colleges have their own low-interest loan programs available to enrolled students. In addition, there are two federal loan programs (Perkins Loans and Direct Subsidized Loans) available to undergraduates with demonstrated financial need.
Federal Work-Study programs provide jobs for undergraduate students who need financial aid. Students are paid at least the current federal minimum wage. Students may work at approved jobs both on and off campus. A student’s total Work-Study award depends on their financial need, the amount of money a school has for this program, and the amount of aid a student gets from other sources. The college financial aid office is responsible for determining a student’s eligibility and for helping students to locate a job. Resources from a Work-Study job can be used to cover incidental costs (toiletries, supplies, etc.) or applied to any tuition bill.