These are the 4 different types of Financial Aid awards you can receive. While the amounts may vary, the same types of awards are given at both 4-year and 2-year colleges.
- Scholarships and Grants – These awards are the best. They’re free money that never needs to be paid back. When offered, always accept Grants and Scholarships.
- Subsidized Loan – If you need to take out a loan to finance your education, these are the ones you should use. Their main advantage is that the money you borrow does not accrue any interest while you’re in college, including if you continue on to graduate school.
- Unsubsidized Loan – These loans do accrue interest and should only be used if absolutely necessary. For example, on a $10,000 Unsubsidized Loan with a standard 6.8% interest rate, the amount of interest that accrues per day is $1.86. Meaning after 4 years of college, you’ll owe over $12,750.
- Work-Study – Unlike the other awards, the student has to work for this money. However, the jobs are often very easy, giving the student time to study while at work. There’s nothing like getting paid to do your homework. Colleges don’t always offer these awards in their initial letter, so if you don’t see it listed, you can reach out to the college’s financial aid office and often they will update their offer.