"The Four Main Types of Financial Aid in the U.S."

Almost everyone in the U.S. is familiar with the term "financial aid" but what exactly does the term mean? What are the different types of financial aid and who is eligible for them? These are extremely important questions to answer as the cost of college continues to increase across the country. The first thing anyone who is considering going to college should know is that financial aid is not a unified entity; there are numerously different types of financial aid and sources available to a wide range of people, and no single application covers all the aid you may be eligible to receive. In order to clarify this somewhat confusing topic, below is a list of the four main types of financial aid, their sources, who is eligible and how to apply.

Grants: Grants are sums of money that can be designated to help pay for tuition, room and board, books and other costs of attendance. The most important aspect of a grant is that the recipient is NOT responsible for paying the money back. In essence, grants are financial gifts awarded to students with no strings attached. Grants come from the U.S. Department of Education (Federal government), can come from state governments and sometimes from the colleges. Government grants are awarded bases solely on economic need; it is in fact illegal to deny or give out a federal Pell Grant on the basis of gender, sex, religion, etc. This usually applies to state grants as well. Grants from the colleges can have their own process for determining who is eligible, and sometimes require a specific GPA, accomplishments in extracurricular activities or community involvement. In order to be eligible for Federal Grants, a student must file a FAFSA (Free Application For Federal Student Aid) form after January 1st of the year he/she plans to enroll in college. Each state will have their own applications for their grants, as do each college that offers this type of financial aid.

Loans: As the name implies, a loan is a sum of money that a student or a parent borrows to help pay for college that must be re-paid at some date. While many private banking institutions offer loans for college, this article deals with loans offered by the federal government as they are the only loans usually incorporated into the term 'financial aid', mostly because loans guaranteed by the federal government are different from loans offered by private institutions. The biggest difference are the student loans

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