Federal Financial Aid: What Types of Aid are Available?

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Federal Financial Aid

The federal government offers three types of student financial aid

  • Student Loans
  • Student Grants
  • Work-Study Programs

Federal Student Loans

Like any other kind of loan, student loans are a type of financial aid that must be repaid to the lender with interest. Federal student loans cannot be cancelled because you didn't like the education you got, didn't get a job you wanted, or because of financial hardship. Also, a student loan is a loan just like any other you might take out to buy a car or a house. It is a real loan, not a loan "lite." Because student loans cannot be ignored or canceled, it's very important to factor the idea of repayment into your future plans before you apply for a large loan.

Student loan money must first be used to cover college tuition, fees, and room and board expenses. If there is money left over, you can get the remainder as cash to pay for additional expenses, or you can instruct your school to hold the money until later in the enrollment period.

The types of federal loans available to students and parents are:

  • Perkins Loans
  • Stafford Loans, Subsidized and Unsubsidized
  • PLUS Loans for Graduate Students
  • PLUS Loans for Parents
  • Consolidation Loans

Federal student loan programs differ from one another primarily in their eligibility requirements, award amounts, interest rates, lender, and the length of time you're given to repay it. Read more about federal loan programs...

Federal Student Grants

A grant is a gift of money that does not have to be repaid, similar to < a href="">college scholarships, though unlike loans. (Note: There may be special circumstances, such as withdrawal from school or incorrect awarding of funds, under which you'll be obligated to repay the grant.

Federal student grants include:

  • Pell Grants
  • Federal Supplemental Educational Opportunity Grant (FSEOG)
  • Academic Competitiveness Grant (ACG)
  • National Science and Mathematics Access to Retain Talent Grant (National SMART Grant)

All federal grants are awarded to students with financial need. Financial need is determined using a variety of factors, including cost of attendance, expected family contribution, enrollment status, and whether you attend for a full academic year or less. Read more about federal grant programs...


The Federal Work Study program is designed so students with financial need can work part-time to earn money for their education. This program is available for undergraduate as well as graduate students. It's also pretty flexible, as it is possible for full-time or part-time students to enjoy the benefits of the program.

Federal work study programs are administered by the schools that participate in it, and as such, isn’t available everywhere. As a program, it encourages community service work, although they do try to find you work related to your course of study, whenever possible. Read more about the federal work-study program...

Source: "Funding Education Beyond High School,"
Research by Carlos Soto, for CourseAdvisor