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Financial Aid: Sources

Sources of Financial Aid

Financial aid is money available from a variety of sources that helps student's and their family pay for college education. Four basic types of financial aid are available.

  • Grants: Awards of money based upon your financial need, and possibly academic achievement or other factors. Grant aid does not need to be repaid.

  • Scholarships: Awards of money based upon your grades or other achievements; financial need may or may not be a criteria. Scholarship aid does not need to be repaid.

  • Educational loans: Money that your parents or guardians borrow to pay for your educational expenses. Loans must be repaid with interest.

  • Work-Study: Part-time job programs to earn money for college expenses.

Federal Grants

Federal Loans & Work-Study

State Aid

Private Scholarships, Grants & Loans


The federal government has a series of financial aid programs designed to help families with demonstrated need to afford the increasingly high cost of a college education. The U.S. Department of Education is the largest source of financial aid for college, but they are not alone in providing assistance from the federal level. Scholarships, loans, job training, money to pay existing student loans, they're all available from a variety of programs administered by the federal government. Important Note: Not all schools participate in all federal student aid programs. Check with your high school guidance counselor or your school's financial aid office to make sure your school participates in the federal program (s) you are interested in.

  • Federal Pell Grants: Based on financial need these are available to undergraduate students only. Grants do not have to be repaid.

  • Federal Supplemental Educational Opportunity Grant (FSEOG): These are grants available for undergraduates only; awards range from $100-$4,000.For students with exceptional financial need who are eligible for Federal Pell Grants.


Educational loans are moneys that you or your parents borrow for educational expenses. Loans must be paid back with interest. An educational loan is a serious commitment. You must make payments until the loan and interest are fully paid. The federal government sponsors a variety of subsidized and unsubsidized loan programs.

  • Federal Perkins Loans: Are low-interest (5 percent) loans that must be repaid; the maximum annual loan amount is $4,000 for undergraduate students and $6,000 for graduate students, administered by the college you are attending and guaranteed by the federal government.

  • Federal Subsidized and Unsubsidized Stafford Loans: Are student loans that must be repaid and are available to both undergraduate and graduate students. If your school participates in the William D. Ford Federal Direct Loan (Direct Loan) Program, the federal government provides the funds for your Stafford Loan. If your school participates in the Federal Family Education Loan (FFEL) Program, a private lender provides the funds for your Stafford Loan, although the federal government guarantees the loan funds. First-year undergraduates are eligible for loans up to $2,625. Amounts increase for subsequent years of study, with higher amounts for graduate students. The interest rate is variable, but never exceeds 8.25 percent. If  you qualify (based on need) for a subsidized Stafford loan, the government will pay the interest on your loan while you are in school, during grace periods, and during any deferment periods. You are however responsible for interest payments on unsubsidized loans.

  • Federal Parent Loan for Undergraduate Students (PLUS): Are unsubsidized loans made to parents of dependent students that are enrolled at least half-time. Low interest, variable rate loans made by lending institutions on a separate PLUS application are available.

  • Federal Direct Loans: This is same as Federal Subsidized Stafford, Unsubsidized Stafford and PLUS loans, except in this case ONLY the U.S. Department of Education issues the loan instead of a lending institution or other private lenders.

  • Federal Work Study (FWS): Provides jobs (both on campus and off campus) to undergraduate and graduate students, allowing them to earn money to pay education expenses. Work hours are limited by the school.


Grant or financial aid programs in various forms are provided in all US states. These programs may vary in their terms or eligibility requirements depending on the requirements of each individual state's Department of Education or higher education agency. However, many of these programs are jointly funded by the state and the federal government through the Federal State Student Incentive Grant Program.

  • There are some basic requirements for almost all state grant programs. One usually needs to be a resident of the state which is awarding the grant. Most states also require that you attend a college in your state of residence if you are going to receive state aid. For detailed information about the grants and scholarships available in your state, check with your state's Department of Education or higher education agency.

  • For the address and phone number of the appropriate agency, select your state's name from this State List


Private or outside scholarships can be obtained by students who put time and effort into the search.

  • Outside scholarships can include aid provided by your own high school, local community organizations, service clubs, private companies or any other foundations, religious organizations, community organizations, and civic groups, as well as organizations related to your field of interest, such as the American Medical Association or American Bar Association.

  • Untapped sources With federal and state funding being cut, there is a lot of interest in the private sector as a source of financial aid.  While there are untapped sources of financial aid in existence, much of that aid is relatively difficult to get. Many of the private sources of aid  may have very restrictive requirements to qualify, and many scholarships can be highly competitive based on grades, achievements and talents.

  • Financial aid from private sources can affect your financial aid status at the college you choose to attend. Colleges ask that you inform them of any awards made directly to you. These scholarships are calculated into your financial aid package.