Money you receive to help pay for your college expenses is considered financial aid. There are different types of financial aid available from different sources with varying requirements. This section is all about helping you navigate the financial aid process to get the most assistance possible.
Merit-Based Aid
You may be eligible for this type of financial aid because of a particular skill, achievement, talent or characteristic. Merit aid is usually given in the form of scholarships and is considered "gift-aid" because it doesn't need to be paid back. The most common scholarships are based upon academic or athletic achievement. You must apply for most scholarships by completing an application and often writing an essay about yourself.
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Scholarships are awarded to students who meet certain criteria. They do not have to be paid back. There are hundreds -- and you may qualify for some!
Need-Based Aid
You may be eligible for this type of financial aid if the expected family contribution (EFC) calculated in your
Free Application for Federal Student Aid (FAFSA) indicates you cannot afford to go to college using only your own or your family's financial resources.
Financial need is determined by subtracting expected family contribution (your EFC) from the cost of attendance (COA) at the college you will attend. Need-based aid includes grants, work-study and some loans. Grants are considered "gift-aid" because they do not need to be paid back. Work-study and loans are considered "self-help" because you work for the money offered you in a work-study award and you must pay back all loan amounts your borrow.
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Grants are awarded to students based on financial need and they do not need to be paid back.
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Work-Study positions offer you a way to earn money while you are attending college and may or may not depend on your financial need.
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Loans (to you or your parents) are funds you borrow that you must pay back.
Tax Credits and Savings
A tax credit reduces the amount of federal taxes the taxpayer owes and could result in a larger refund. There are two different opportunities of this type; the
Hope scholarship and the Lifetime Learning tax credit. In addition, there are additional tax code provisions that provide incentives for education.
You can download this excellent publication for students and parents published by the U.S. Department of Education. This booklet is a comprehensive guide to federal student aid programs.