How does financial aid work?

Financial aid is financial assistance provided to someone who needs money. The term is commonly used to refer to money or assistance provided to students who don’t have the funds needed to complete higher education. The cost of higher education is increasing. This is true not in just one country but in countries across the world. With the growth of private universities and colleges, the cost of education is spiraling.

While the cost of medical education and technology education is high, even basic degree programs are expensive and most students find it difficult to afford the fees. Financial aid helps those desirous of learning to acquire a degree by joining the college or university of their choice. The expenses for education are met through assistance that may be given by the government or other organizations.

Financial aid can cover:

  1. Tuition fee for the course.
  2. Other fees charged by the college/university like exam fee.
  3. Cost of books and other materials needed.
  4. Cost of accommodation that includes hostel fees or fees for other boarding options.
  5. Living expenses.

Financial aid for higher education can include any of the following:

1) Scholarships

A scholarship is a financial aid provided to meritorious students. Those who have worked hard and done well at their schooling or basic college level are rewarded by providing them with funds that would cover their cost of education. Scholarships are granted by public organizations, including colleges/universities. They are also offered by private organizations, charitable organizations, and private foundations who are interested to help students who deserve to study.

Students need to apply for the scholarship with all their details and produce their marks cards/credit scores. Scholarships are awarded based on the marks/score/grade point. Scholarships need not be paid back. It can be given as a one-time check or periodically (every semester/year). It may be given directly to the college or the student, to use as he pleases.

2) Grants

A grant is need-based financial aid. Scholarships are awarded on merit, whereas grants are given based on the specific needs of a student. The objective of grants is to make education affordable for students. To apply for a grant, a student needs to provide details of his/parents’ income, assets owned, and expenses needed for college education. Based on these details, a sum of money is granted to the student. Grants need not be repaid.

3) Work study scholarship/program

A work-study program is where a student gets employment either at the college/university, so that he can work after college hours and earn money needed for his expenses. A work-study scholarship may pay part of the college fee, while other expenses have to be earned by the student by working part-time. Colleges can select students to work as an assistant in a department and pay a stipend to take care of their expenses.

4) Student loans

While scholarships and grants need not be repaid, loans have to be repaid. Getting a loan from a bank is not easy and may require a guarantor or surety. Student loans are given at low interest rates with easy repayment options allowing students to pay once they start working. These loans are also awarded based on merit/need.

To avail of financial aid, first research on different options available.Apply for aid well before college starts so that you can get funds on time.