Types of Financial Aid
Paying for your education may seem like a difficult task. The least expensive option for Alaskans is to attend one of the schools in the University of Alaska system. Even these schools can cost more than $25,000 per year for tuition, books, and room and board. Students who choose to attend a private school in Alaska, or a school in a different state, often have expenses much greater than this.
But the cost of education does not need to be an insurmountable obstacle to reaching your education goal. There are many financial aid options available to students to help make the cost affordable.
Financial aid refers to money that is either given or loaned to students to help pay for their education. Some financial aid is need-based, some is not. Some financial aid is specifically geared toward helping specific groups, such as minority students or students in health professions training programs.
There are seven major types of financial aid available. Many students receive more than one type of aid.
- Loans are amounts of money given to students that eventually must be repaid by the student. Most students qualify for some sort of loan. Banks, governmental agencies, and colleges and universities offer loans to students. Repayment for loans includes paying back the money that was borrowed PLUS interest. Interest is the cost the lender charges to the borrower for the use of the money. Interest accrues until the money is completely paid back to the lender. The amount that accrues is based on the amount of time the borrower has the money before it is paid back. By the time the loan is repaid, the amount paid for interest can be even larger than the amount of money borrowed! Therefore, it is important to find out when the loan must be repaid, exactly how much must be repaid, how much interest is charged, and when interest will start to accrue. Students are usually not required to start paying back the loan until after graduation. When that time arrives, a schedule of monthly payments is set up by the institution that makes the loan. These schedules involve monthly payments for several years. NOTE: Students may want to pay any interest that accrues while still in school to reduce the cost of repaying the loan.
- Scholarships are monies awarded by certain organizations for achievement, leadership, involvement, and community service, generally after a competitive application process. There is no need to repay a scholarship as long as all stipulations are met.
- Grants are also monies which do not need to be repaid as long as all stipulations are met. Grants often have fewer specific requirements than scholarships, but grants are generally based on a student’s financial need.
- Fellowships are usually based on achievement in school and are available to graduate students (students who have completed a four-year bachelor’s degree or are attending graduate school).
- Federal Work Study Program provides jobs for students with financial need, allowing them to earn money to help pay education expenses and gain training at the same time. It encourages community service and work related to the student’s course of study. The benefit of this type of employment is that work schedules are planned around the student’s class schedule.
- Tuition Waiversare sometimes offered by university departments or programs. For more information, contact the department for which you would like to be considered for a tuition waiver.
- Organizational Commitments are an option for some students who have membership in or contractual agreements with certain groups (e.g. Air Force ROTC or National Health Service Corps). Under these agreements, these groups can concurrently pay for a student’s tuition or repay debts incurred while attending a university in exchange for an agreed upon length of service or employment.
Students may also elect to secure employment on campus or in the surrounding community to help pay for their education. This can help supplement living costs and other incidentals, although employers may or may not work around the student’s class schedule.
Note:The College Grants Database gives a comprehensive overview of the different types of funding available to students attending college. The website includes direct links to the major federal programs, as well as information about applying for funding for specific careers (such as nursing), funding for minority students or other disadvantaged students, and funding for particular types of schools. There is a wealth of resources on this site. Check it out: http://www.collegegrant.net/grants-loans-and-scholarships/
This page was last updated by Janice Troyer on October 29, 2015