What are Ways to Finance a College Education?

<h3 id="section---EssentialInformation">Essential Information</h3> <p>Many students and their families begin the college years by navigating the complex process of obtaining funds to pay for schooling. Some programs are based on financial need, while others rely on academic achievements or other factors. Keep reading to learn about types of financial aid that could help finance your postsecondary education. </p> <h3 id="section---ImportantFactsAboutCollegeFinancialAid"> Important Facts About College Financial Aid</h3> <p /> <table border="1"><tr><td> Qualifications </td><td> Can include academic performance, income level, military service, credit rating, career goals</td></tr> <tr><td> Application Information </td><td> May need to apply annually</td></tr> <tr><td> Amount of Aid </td><td> May cover full or partial tuition costs</td></tr> <tr><td> Types of Schools </td><td> 2-year and 4-year public and private schools typically offer aid</td></tr> </table><h3 id="section---FederalStudentAid">Federal Student Aid</h3> <p>Every year, the office of Federal Student Aid offers more than $150 billion in grants, loans and work-study opportunities for students attending college or a career school. Students can apply for federal student aid by completing the Free Application for Federal Student Aid (FAFSA). The data included in this form also is used by numerous states, colleges and private financial aid providers to determine your eligibility for aid. The FAFSA is available in paper form, or you can complete it online at <i>fafsa.ed.gov</i>. </p> <h3 id="section---Grants">Grants</h3> <p>Usually based on financial need, grants are a form of aid that typically does not have to be repaid (repayment might be required, for example, if a student withdraws from school in the middle of a semester). Grants are available through colleges and career schools, private and nonprofit organizations, and state governments. The federal government also offers several types of grants, including the following: </p> <ul><li>Federal Pell Grants for undergraduate students </li><li>Federal Supplemental Educational Opportunity Grants for undergraduate students with exceptional financial need </li><li>Teacher Education Assistance for College and Higher Education (TEACH) Grants for prospective teachers who intend to work in low-income areas or in high-need fields </li><li>Iraq and Afghanistan Service Grants for students who lost a parent serving in the military in Iraq or Afghanistan </li></ul><h3 id="section---Loans">Loans</h3> <p>Student loans are available from the federal government, nonprofit agencies and private student loan companies. Loans differ from grants in that they must be paid back with interest. Federal student loans, including Direct Loans and Perkins Loans, typically have lower interest rates and greater flexibility in repayment. According to The Institute for College Access &amp; Success Report, 39% to 73% of students who graduated with a bachelor's degree in 2020 had student loan debt, ranging from $18,350 (Utah) to $39,950 (New Hampshire) per student. </p> <h3 id="section---WorkStudy">Work Study</h3> <p>The Federal Work Study program helps students pay for college through part-time employment. Work-study positions pay at least minimum wage and are available to part- and full-time students on the undergraduate, graduate and professional levels. The Federal Work Study program encourages work in community service, such as tutoring and emergency preparedness. </p> <h3 id="section---Scholarships">Scholarships</h3> <p>Scholarships, which do not have to be repaid, are offered through colleges and universities, as well as employers, professional and social groups, religious institutions, nonprofit organizations and private companies, to name a few. They might be awarded based on academic or athletic performance, ethnicity, chosen major or artistic skills, among other parameters. </p> <p>You can learn about scholarship opportunities from your high school guidance counselor or the financial aid office at your prospective or current college or university. Another good source is the U.S. Department of Labor's scholarship search tool at <i>careerinfonet.org/scholarshipsearch</i>.</p>