What Are The Different Types Of Student Loans? – Need help exploring your options for paying for school? Find all the main types of financial aid in this guide.
College education has become expensive these days. Few students can earn enough money during the summer—let alone all year—to cover their tuition costs.
What Are The Different Types Of Student Loans?
Fortunately, there are many financial aid options. The problem is understanding the nuances of each type of aid.
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Sifting through tab after tab of information like types of assistance, eligibility criteria etc. takes time.
We wanted to make the process easier for you, so we’ve created this guide that covers the types of financial aid available. Learn more about your options and what’s right for you
Scholarships are a great form of aid because you don’t have to pay for them. Yes, it’s free money, helping you pay off or avoid student loans!
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There are so many of these, it’s hard to know where to start. Fortunately for you, tools like this app can help you find thousands of opportunities.
It works well in high school and college. If you have certain grades and test scores, you can win a scholarship, known as a scholarship.
Many schools automatically pay you a standardized amount if your grades reach a certain level. Others may pay more if you have high grades and scores.
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If you have talent in sports, you can turn it into money by winning a scholarship to the school of your choice.
You’ve probably heard of full-ride scholarships. These are rare, but one winner gets a scholarship as long as you complete your contract.
In addition, there are sports scholarships. They can’t cover everything, but when combined with other aids they can help a lot.
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Not a great student or athlete? Don’t worry—if you want to help give back to your community, you can earn money through community service scholarships.
Many private and public organizations offer scholarships to students who show an interest and commitment to giving. They may require you to write an essay, make a video, or complete some other assignment to submit, but the money will be worth it!
It’s always a good idea to check with your staff or parents. They can offer scholarships to college-age children of workers.
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Now, these are not the same as tuition fees. This is a special benefit which is available only to the employee of the company. I will talk more about this later.
If you’re active in hobbies or extracurriculars, there are scholarship opportunities to help you get into college.
For example, say you like to play an instrument in your spare time, but it’s not part of your head. Scholarships are available for musicians.
Different Types Of Student Loans
Or maybe you’re a big debate fan and join a debate club. You may be able to find scholarship competitions related to debate or speech.
Many scholarships have been created by public and private organizations to help students who cannot afford a college education.
Some may consider certifications, but others may be specific to a major or general academic field, such as STEM.
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However, scholarship sites often allow you to specify your race, gender, ethnicity, or other aspects of your identity in order to qualify for these opportunities.
However, grants are generally based on financial need. This is different from T scholarships, which are usually based on merit of one kind or another.
Here’s an interesting fact: About $2 billion in benefits each year are unclaimed. You may have some money in that pile, even if you don’t “need” it.
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There are 4 main types of federal grants. In addition, there are often government and private benefits that you may be eligible for.
The most popular is the Federal Pell Grant program. Provides financial assistance to needy undergraduate, graduate or professional students.
Not all schools participate in the FSEOG program. Keep this in mind if you’re still applying to school and need extra help.
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Additionally, each school sets application deadlines, and grant-in-kind aid may expire, unlike Pell Grants. If you are at a participating school, apply for aid as soon as possible.
The federal government offers Iraq and Afghanistan Service Scholarships to students whose parents or dependents died serving in Iraq and Afghanistan after 9/11.
Students must also be eligible for Pell Grants based on EFC criteria (but not others) and must be under 24 years of age or enrolled in college at least part-time when their parent or guardians have died.
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Do you want to be a teacher? The federal government can provide scholarships of up to $4,000 per year.
These are more complicated and have more requirements — without entering an education career — so check the federal student aid website for more information.
Beyond the 4 types of federal grants above are state-based funding programs. You should check your state government, nonprofit or financial aid website to see what types of opportunities are available in your state.
Types Of Student Loans
Many private organizations also provide grants. In most cases, it will contain rows of specific elements (unnecessarily) such as id, location, major, etc.
There are quite a few of these, so it’s worth checking out even if you’re not sure what you’re good at.
Student loans are the most widely used aid. Almost 70% of students take out loans to finance at least part of their higher education.
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Unlike a scholarship or grant, you must repay the loan over time. In most cases, you can wait until you graduate before starting your payments.
The silver lining of taking out this loan is that paying off the loan on time will help build your credit score. Down the road, a good credit score can help you achieve all kinds of financial goals.
William D. The Ford Federal Direct Loan Program, also known as a direct loan, is a student loan program offered by the United States Department of Education. It is the largest loan program and has 4 types:
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Many banks, lenders and other financial institutions offer private student loans. However, this should be a last resort for several reasons.
First, interest rates are often higher than federal loans. They are also flexible, meaning they can change over a wide range of interest rates.
Private lenders usually don’t have nice programs like deferment, forbearance and repayment plans (although most of them are offered in 2020 due to the crisis).
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The worst part is that some private providers may pay while you are in school. It cannot be done on a student budget.
Finally, you may need a spouse like a parent to get a personal loan. A cosigner agrees to be responsible for your loan if you are unable to pay.
Never get stuck with high interest rates. At the very least, you can refinance your loan at a lower rate when your credit score improves.
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Work-study is a form of federal aid that allows you to work in certain approved jobs to pay for school. Jobs can be on or off campus, but will be related to your major or community service.
However, the advantage here is flexibility. Work study is flexible in scheduling your hours around classes. That way, you can pay for school without giving up good grades.
Also, work-study activities look good on your resume when applying for internships or jobs, as they are always important.
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This usually takes the form of a refund – when you complete a semester or a year, the company will refund some of your tuition fees.
Companies may have eligibility rules, he said. Check your employer’s HR department and employee handbook for benefit types, eligibility, benefit caps, and more.
Service members, veterans and their families can receive military financial aid to thank them for their service.
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A popular military aid is the Department of Veterans Affairs, known as the GI Bill.
If you qualify for the GI Bill, the VA will pay more for your school. They will give you monthly housing allowance and tuition and books allowance.
Another popular form of military assistance is training provided through the Officer Training Course (ROTC). This applies to your education and post-graduation service in lieu of military training while you are a student.
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In addition, many private organizations provide scholarships, grants, and other assistance to service members, veterans, and their families.
Few students ever rely on one form of financial aid. You are likely to raise money from several sources to pursue your higher education.
With this in mind – make sure that you don’t have to pay any help to reduce your debts. Grants, scholarships, internships, whatever.
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If you have educational expenses after using various types of aid and other financial sources, such as 529 plans, only loans are appropriate. Federal Direct Loans can be subsidized or unsubsidized. Both types of loans offer many benefits including flexible payment options, low interest rates.
