Introduction

A compilation of grants comprises a financial aid package., loans, and scholarships that help students pay for college. A financial aid award letter is the document you get when the school has determined your eligibility for federal student aid (grants and loans). If you’re also eligible for non-federal assistance, your school may send its letter or notify you online.

In this post, we’ll explain what’s included in a financial aid package—including grants, scholarships, and work-study programs—and how to read an award letter so you can decide if it’s right for you. We’ll also explain how to fill out the Free Application for Federal Student Aid (FAFSA).

What’s included in a financial aid package

• Grants and scholarships: These funds do not have to be repaid. They can be based on your financial need, merit, or both.
• Federal student loans: Loans borrowed through the federal government and guaranteed by your school (if you attend one). They come with interest rates that vary depending on when they’re taken out and how much you borrow.
• Work-study programs: Jobs funded by your school that you get through them, not an employer; they may provide hourly pay or a stipend for expenses like gas money for traveling between classes or buying lunch at school during breaks between classes (as long as those breaks aren’t longer than 20 minutes).

Types of financial aid

There are several types of financial aid, each with its rules and restrictions. Grants and scholarships are given out by the government or private organizations to students who meet certain criteria. Work-study programs allow you to earn money while still in school by working on campus or through an off-campus employer. Federal student loans are offered through the Department of Education (DOE) and must be repaid with interest after graduation; however, only about 5% of all undergraduate students use these loans because they have high-interest rates and low amounts available for borrowing compared to private lenders like Sallie Mae or Wells Fargo who offer better terms on their products. Private lenders charge higher rates than DOE but may make more flexible repayment plans available depending on your situation, such as having a bad credit history or being unemployed after college graduation.

Need-based financial aid

Need-based financial aid is awarded to students who demonstrate a financial need. It’s based on your family’s income and assets and other factors such as your family size, housing status, and disability status.

You can typically apply for need-based aid through the Free Application for Federal Student Aid (FAFSA). The FAFSA collects information about your household finances so that schools can determine how much money they’ll give you in grants or loans. This means that every student has to fill out this form each year they hope to attend college–even if there are no changes in their circumstances from one year to another!

Merit-based financial aid

Merit-based aid relies on your academic and extracurricular performance.

This type of aid is generally reserved for students with high grades and test scores, but it can also be given to students who demonstrate leadership qualities or participate in specific activities. The most common forms of merit-based aid are scholarships and grants, but some schools offer other types of merit-based awards, such as internships or research opportunities.

Grants

Grants are awards that do not need to be repaid. They are awarded based on financial need and can be from the federal government, state governments, or a college or university. Grants are sometimes called scholarships because they are usually based on merit (academic performance) rather than need alone.

Grants may be for one year or multiple years, depending on the amount awarded; however, there is no guarantee that students will receive any grant money in subsequent years if they do not maintain satisfactory academic progress requirements set by their school’s financial aid office.

Scholarships

If you’re eligible for a scholarship, it can help pay the cost of your education.

Scholarships are generally based on need or merit, but some may require additional materials (such as essays) for the application process. If you receive an academic scholarship, The money could be used for tuition, fees, housing, and other living expenses.

Suppose you’re interested in applying for scholarships from Wake Forest University or external organizations like the Gates Millennium Scholars Program or The Jack Kent Cooke Foundation Scholarship Program. In that case, there are some things that will make your application stand out:

Work-study programs

Work-study programs are financial aid that allows students to earn money while enrolled. Students can apply for work-study programs through their school’s office of financial assistance, and once accepted; they will work on campus or for an off-campus organization that has been approved by their college or university.

Work-study programs help pay for college expenses such as tuition, books and supplies, room & board (if living on campus), transportation costs (like gas), childcare expenses if needed, etc. If you qualify for a work-study program, those funds must be used before any other funding sources, such as loans or grants, come into play.

Federal student loans

Federal student loans are the most common form of financial aid. They’re available to students with financial needs and can be used for undergraduate or graduate studies and professional programs. Types of federal student loans include subsidized and unsubsidized loans, PLUS (for parents), Perkins Loans (for students with exceptional needs), and many others.

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Each type of federal loan has its eligibility requirements:

• Subsidized: You must have demonstrated financial need through FAFSA forms; these funds will be paid directly by the government because your school won’t collect interest while you’re in school or within six months after graduation if you’re still enrolled at least half-time.
• Unsubsidized: You do not have to show proof of income when applying for this type of loan; however, interest accrues from day one until repayment begins–typically ten years after graduation unless otherwise specified by law or lender agreement.

Private student loans

Private student loans are ineligible for federal repayment options, such as income-based repayment. They also have higher interest rates and fees than federal loans—and you can’t consolidate private debt with a Federal consolidation loan (such as the Direct Consolidation Loan).

If your school offers you a package with both funding sources, you must decide which ones you want before accepting their offer. Lastly, unlike federal loans–which are usually granted automatically if you’re eligible–private lenders will only give out money if they decide it’s in their best interest (i.e., they think they’ll be able to collect on the loan).

Expected Family Contribution (EFC)

The Expected Family Contribution (EFC) is the amount of money the college expects you to contribute toward your education. It’s based on your income, assets, and family size. The EFC is calculated by filling out the annual FAFSA (Free Application for Federal Student Aid).

Your EFC determines how much need-based financial aid you can receive, so you must fill out this form accurately! When filling out the FAFSA:

• Make sure all of your information is accurate! Even if something seems irrelevant or obvious (like listing yourself as a dependent), make sure it’s correct on your application so that when colleges look at this data, they know exactly what kind of situation they’re dealing with when deciding how much money they should give out in scholarships and grants each year.

Cost of Attendance (COA)

Cost of Attendance (COA) is the total amount of money you will need to pay for college. It includes tuition, fees, room and board, books and supplies, transportation, and personal expenses. The COA is determined by your school’s financial aid office based on the information you provide on your FAFSA form.

If your family’s income is above $80K per year or if you have no parents who are still living at home with you (if living with grandparents or other relatives), then there may be additional requirements before receiving federal student aid funds such as completing an independent student loan application form called the CSS PROFILE.”

Free Application for Federal Student Aid (FAFSA)

The Free Application for Federal Student Aid (FAFSA) helps you apply for financial aid.

The FAFSA is available online at fafsa.gov. It’s the same form no matter which school you’re applying to, but each school may have additional documents you must complete in addition to the FAFSA.

Suppose you’re filling out your application online with us. In that case, we’ll ask for information about yourself and those who live in your household–including parents and siblings under age 24 and still living at home with their parents or guardians (if applicable).

Conclusion

There are many different types of financial aid, but they all serve the same purpose: to help you pay for college. You can get scholarships, grants, work-study programs, and loans from the federal government and private organizations or individuals. The best way to find out what kind of aid you qualify for is by completing the FAFSA each year before March 1st so that schools can process your application before deciding how much money they will award individuals based on need or merit.