Student aid isn’t just a one-size-fits-all deal. There are several types, and knowing the difference can really help you out. You need to repay some types of student aid, while others are like free cash. 

Whatever type of student aid you receive, it’s important to understand the details since there may be conditions, like working in certain environments for a set period after graduation. You may have to repay the amount if you accept the student aid without following through. 

Grants

Think of grants as free money. You don’t have to pay them back, which is awesome. Grants are usually need-based, meaning they’re given to students who really need financial help. You may need to meet certain conditions to keep the grant, such as maintaining a specific grade point average. 

The most well-known grants are:

• Pell Grants 
• Federal Supplemental Educational Opportunity Grants
• Teacher Education Assistance for College and Higher Education (TEACH) Grant
• Iraq and Afghanistan Service Grant

Scholarships

Scholarships are another type of free money, but they’re usually awarded based on merit—things like good grades, athletic ability, or special talents. There are also scholarships for just about anything you can imagine!

Some companies offer scholarships for students who show high potential as future employees. For example, companies like Google or Microsoft might offer scholarships to computer science students, expecting them to work for them post-graduation.

Likewise, healthcare facilities often offer scholarships to nursing or medical students, with the agreement that the students will work for their organization after completing their degree. This kind of scholarship is a win-win: students get financial help with school, and companies secure skilled workers for their future workforce.

Loans

Loans are borrowed money you have to pay back, usually with interest. 

• Federal loans generally have lower interest rates and better repayment options. For instance, the government froze repayment on federal loans during the COVID-19 pandemic.
• Private loans come from banks or other financial institutions. You may consider a private loan if you need more money than a federal loan will offer, such as for private graduate school. 

Work-Study

Work-study programs offer you a part-time job on or near campus, and the money you earn helps pay your educational bills. It’s a great way to gain work experience while also helping to cover your expenses.

However, you need to apply to get any type of student aid. Learn more about how to apply for multiple types of student aid on one application next.