Aid you keep and aid you repay

Grants and scholarships

Grants usually come from the federal government, your state or the school itself. The Federal Pell Grant and the Federal Supplemental Educational Opportunity Grant (FSEOG) are need-based federal grants, and each program sets its own rules for who receives it and how much. State and school grants follow their own rules, which the aid office can explain.

Scholarships may come from the school or from outside groups, and many come with conditions. A renewable scholarship might ask you to keep a certain grade average, stay in a particular major or enroll full-time every term. Read those conditions now, because losing a scholarship in a later year raises your costs for every year after.

Gift aid can still have strings attached. If you withdraw partway through a term, part of your federal aid may have to be returned, and the aid office can explain how that calculation works at your school.

Work-study arrives as a paycheck

Federal Work-Study gives you the chance to earn money through a job, often on campus. The amount on your offer is the most you can earn through the program that year, and it turns into money only when you find a work-study job and work the hours. You receive it as regular pay on the employer's payroll schedule, rather than as a credit on your bill.

Because the pay arrives over time, it rarely helps with tuition due at the start of a term. Most students put it toward books, food and everyday costs instead.

Loans come back with interest

Federal Direct Subsidized Loans are for undergraduates with financial need, and the government pays the interest while you are enrolled at least half-time and during certain other periods. Direct Unsubsidized Loans start gathering interest from the day the money is paid out. A Parent PLUS Loan is borrowed by a parent, who is responsible for repaying it, even though it appears on your offer.

Some families also look at private loans from banks or other lenders. These usually need a credit check or a cosigner and lack the protections federal loans carry, such as income-driven repayment options. Every federal loan on an offer is optional, and you can accept the full amount, a smaller amount or none at all.