6 Types of Financial Aid to Help You Pay for College

Figuring out your financial aid to pay for college is one of the biggest obstacles many students face. However, there are many types of college financial aid available that may ease the cost of earning your degree. Whatever path you choose to go down, remember, you always have to pay back financial aid. The one exception is if you earn a grant. Grants do not have to be repaid. ;

tressed about paying for college? You’re not alone. According to a 2018 study by The Princeton Review, the majority of students and their parents were concerned about the level of debt to pay for college, whether they’re studying to be a gerontologist, an actuary, or an early childhood educator! Compare that to ten years ago, when the majority were concerned about not getting into their first choice.



There are five common sources of college financial aid. Many students use a combination of two or more of these sources to pay for college.

Check out the different types of financial aid below to find the fit that’s right for you and learn how to apply to each.


Source of AidTypes of AidDegree LevelBenefits
Federal AidGrants, Loans, Work-studyUndergraduate, graduate, professionalLower interest rates, flexible repayment terms
State AidGrants, Scholarships, Work-study funds, State loans, Tuition assistanceUndergraduate, GraduateMay ease the cost of attending a state school
Institutional AidUsually grantsUndergraduate, graduateGrants awarded based on merit or financial need don’t have to be repaid
PrivatePrivate student loans or private scholarshipsUndergraduate, graduate, professionalScholarships don’t have to be repaid and private loans have variable APR, cosigner options, and allow you to build credit
Personal or Family SavingsPersonal savings, or help from family or friendsUndergraduate, graduate, professionalOften, these are gifts that you don’t have to pay back, or at least without interest


The federal government offers three types of financial aid:

  1. Federal Grants
  2. Federal Work-Study Programs
  3. Federal Student Loans

These each have different requirements and repayment options. For instance, if you meet the federal grant requirements, you don’t have to pay them back. On the other hand, if you don’t meet the requirements, the grants may turn into loans.

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Federal Student Aid ProgramType of AidProgram DetailsMaximum Award Amounts
Federal Pell GrantGrant (not repaid)Available almost exclusively to undergraduate students.Annual – $6,095 (for calendar year July 1, 2018 to June 30, 2019)
Federal Supplemental Educational Opportunity Grant (FSEOG)Grant (not repaid)For undergraduate students with exceptional financial need.
Priority is given to Federal Pell Grant recipients.
Annual – $100-$4,000 depending on school funds availability
Federal Work-StudyEarned (not repaid)For undergraduate and graduate students (not available to international students).
Student coordinates with school to find eligible employers.
Jobs can be on campus or off campus.
Students are paid at least minimum wage.
Federal Perkins LoanLoanFunds provided directly by and repaid to school.
Determined by financial need & fund availability.
Interest rate is five percent.
Annual – $5,500 undergraduate / $8,000 graduate & professional
Subsidized FFEL or Direct Stafford LoanLoanInterest paid by lender while student is in school or period of deferment. Available to all undergraduate or graduate students with financial need attending at least half-time.Annual – $3,500-$8,500 depending on grade level
Unsubsidized FFEL or Direct Stafford LoanLoanInterest paid or accrued by borrower while student is in school or in grace or deferment period.
Available to all undergraduate or graduate students with financial need attending at least half-time.
Annual – $5,500-$20,500 (less any subsidized amounts received for the same year) depending on grade level
FFEL or Direct Parent PLUS LoanLoanInterest paid or accrued by borrower for length of loan.
Available to parents of dependent students (borrower must not have negative credit history).
Lifetime Cost of attendance minus any other financial aid received

Learn more about the specific types of grants and other federal financial aid below.

Check out more about Grants and Scholarships to see if you meet the requirements and learn how to apply!


Many states offer different types of financial aid to in-state students or to out-of-state students who attend school in state. Some of these options include:

  • Grants
  • Scholarships
  • Work-study funds
  • State loans
  • Tuition assistance

If you’re interested in finding the options available through your state, start by contacting your guidance counselor or the financial aid counselor at a specific school. You can also contact your state’s financial aid agency.


As opposed to federal financial aid and state financial aid, which comes from the government, institutional financial aid comes directly from your college or university. In some cases, the aid actually comes from individuals, such as alumni, that is paid through the school.

In most cases, institutional aid comes in the form of grants or scholarships, which means that you don’t have to pay them back.

Usually, institutional aid is awarded based on either financial need, academic merit, or both. As with other types of aid, the first step is to complete a FAFSA. This allows your school to determine what need-based aid they may offer you.

In addition, some schools have additional forms to complete, so be sure to check with the financial aid office or your counselor. Keep in mind that institutional aid is usually very competitive because of the limited amount of funds available, so be sure to check all requirements before submitting your application.


Private financial aid usually comes in two forms:

  • Private Student Loans
  • Private Scholarships

Private scholarships, such as those offered through Unigo.com, range from a couple hundred bucks to ten thousand dollars or more. Do you research to find which scholarships you qualify for.

Private student loans are offered through independent lenders, such as banks or credit unions. While each has unique requirements, many offer benefits such as variable APR, reduced interest rates for automatic debit, and loans with or without a cosigner.


While often college tuition costs more than most families have saved in the bank (especially for families with multiple children), personal savings are an important part of paying for college.

Usually, personal savings can cover:

  • Portion of your tuition
  • Travel
  • Food
  • Books
  • Study materials

However, personal savings don;t always have to come from your own piggy bank or from your parents. In fact, sometimes friends or extended family members can contribute as well.

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There are many type of financial aid that comes from the sources listed above. Some of these options are listed below so that you can learn how to apply and find out which is the perfect source of financial aid for you.


As mentioned, many colleges and universities offer grants based on financial need or merit. There are too many of these to list here, so be sure to contact your counselor or financial aid office to find out specific options at your school.

In addition, there are also a variety of grants offered by the federal government. Some of these options are listed below.


These are usually awarded to undergraduate students who have not yet earned a bachelor’s degree. The maximum award for the 2018-2019 is $5,920, however the exact amount award depends on:

  • Student’s financial need
  • College’s cost of attendance
  • Student’s enrollment status
  • Length of the academic year in which student is enrolled


These grants are awarded to undergraduate students with exceptional financial need and the amount awarded is determined by the college’s financial aid office and depends on the student’s financial need and the availability of funds at the college.


Awarded to students who intend to teach in a public or private elementary or secondary school that serves low-income families, these grants could turn into loans if the service requirement is not met.


These grants are awarded to students whose parents or guardians were members of the Armed Forces and died as a result of performing military service in Iraq or Afghanistan after September 11, 2001. To qualify, a student must be under 24 years old or enrolled in college at the time of the parent or guardian’s death.


Scholarships are some of the best ways to earn financial aid for your degree because it’s free money. However, you do need to find scholarships that you qualify for and send applications. But that’s a little bit of effort for possibly thousands of dollars in awards if you win.

While the bigger awards may be enticing (and it’s a good idea to apply), the smaller amounts such as $500, $1,000, or $2,500 may have less applicants, which may increase your odds of winning. Plus, a few of those amounts could make a huge difference when it comes to paying for your degree.

Check out some scholarships with upcoming deadlines and apply today! EducationConnection is also proud to sponsor a scholarship for Military Active Duty and Veterans.


Check out the different types of federal student loans below to find specific requirements.


As the largest federal student loan program, and with the U.S. Department of Education as the lender, there are four types of Direct Loans:

  1. Direct Subsidized Loans: loans made to eligible undergraduate students who demonstrate financial need
  2. Direct Unsubsidized Loans: loans made to eligible undergraduate, graduate, and professional students, but the students don’t need to demonstrate financial need
  3. Direct PLUS Loans: loans made to graduate or professional students, or the parents of dependent undergraduate students, to help pay for education-related expenses not covered by other financial aid
  4. Direct Consolidation Loans: loans that allow you to combine all of your eligible federal student loans into a single loan with one loan servicer


This is a school-based loan for undergraduate and graduate students with exceptional financial need. For loans under this program, the individual school is the lender.

Percentage of Students with Federal Student Loans

Nearly 52% of full-time/ full-year undergraduate students took out some type of federal student loan.


There are many differences between federal student loans and private student loans. One, interest rates for federal student loans are set by the government.

On the other hand, interest rates for private student loans are set by the individual lender and use factors such as your credit score and whether or not you have a cosigner as determining factors.

However, private loans do have some advantages, such variable interest rates, the ability to release a cosigner after a certain number of on-time payments, and other options.

Check out some of the private student loans to learn more about the specific benefits and learn how to apply! Don’t forget, most of the time it doesn’t hurt your credit to see what types of rates may be offered.


As the job market continues to become more competitive, many companies are searching for benefits to offer employees in order to recruit and retain top talent.

One of these benefits includes offering education reimbursement or other types of funding for employees to earn a degree. At many companies, there are annual caps or a certain percentage limit, so be sure to check with your HR department if your company offers these programs.


Work Study programs allow you to earn money through federally funded jobs on campus or at other approved locations. Campus facilities at many colleges and universities include:

  • Student center
  • Career center
  • Athletic department
  • Residence halls


In order to apply for college financial aid, through any of the sources above, you should:

  1. Complete the FAFSA
  2. Find out your awarded amount
  3. Contact school
  4. Complete necessary loan forms
  5. Find scholarships you qualify for
  6. Apply for scholarships and grants at your school


There are actually two types of accreditation: institutional and specialized. Institutional accreditation makes sure the college itself meets certain standards, while specialized accreditation makes sure a specific program meets its particular industry’s standards.

Accreditation is further broken down into national and regional types. National accreditation is typically used by colleges looking to get their students started in careers as soon as possible. These include technical, vocational, correspondence, and religious schools. National accreditation transfer credits are not widely recognized by regionally accredited colleges and universities.

Regional accreditation, on the other hand, is the standard recognized by most traditional colleges and universities, and is therefore more widely accepted. Both national and regional accreditation is recognized by the U.S. Department of Education, but regional accreditation makes it easier to transfer college credits to other regionally accredited institutions.


According to the US Department of Education, college accreditation is used by both students and universities to:

  • verify that a college or university meets established standards.
  • help students identify acceptable colleges or universities.
  • help colleges and universities determine the acceptability of transfer credits.
  • establish goals to raise the standards among educational institutions.
  • establish criteria for professional certification and licensure and for upgrading courses offering such preparation.
  • establish a basis and criteria for receiving federal financial assistance and student aid.

You can check your school’s accreditation by visiting the following:

To check distance learning accreditation, visit:

Beware of these phrases when considering a school’s accreditation:

  • “Pursuing Accreditation”
  • “Chartered”
  • “Licensed”
  • “Registered”
  • “Recognized”
  • “Approved”

These terms do not necessarily mean a school is accredited. To verify regional accreditation of a school, visit the Council for Higher Education Accreditation.

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  • Offering two quality, competency-based online learning formats: FlexPath and GuidedPath.
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EducationDynamics maintains business relationships with the schools it features.

Sources for school statistics is the U.S. Department of Education’s National Center for Education Statistics.

This is an offer for educational opportunities that may lead to employment and not an offer for nor a guarantee of employment. Students should consult with a representative from the school they select to learn more about career opportunities in that field. Program outcomes vary according to each institution’s specific program curriculum. Financial aid may be available to those who qualify. The financial aid information on this site is for informational and research purposes only and is not an assurance of financial aid.