Financial aid is a game-changer for many students, helping make higher education possible despite rising costs. However, not all financial aid offers are created equal. It’s important to understand and compare your financial aid options carefully to make the best choice for your future.

Types of Financial Aid

Financial aid comes in various forms and can be provided by your college or university, the federal government or private organizations. Here are the most common types of financial assistance you may encounter:

Grants

These are free funds that you don’t have to repay. Grants may come from federal or state governments, your college or private organizations. They often have specific eligibility requirements but can be used for tuition, books, housing and other living expenses.

Student Loans

Federal student loans are one of the most common ways to finance your education. They can be subsidized (meaning the government covers the interest while you're in school) or unsubsidized (where you’re responsible for the interest). There are also private loans from financial institutions and other sources. Be sure to explore all your loan options and consider borrowing only what you absolutely need. Many colleges and states also offer student loan programs.

Scholarships

Scholarships are funds you don't have to repay, often awarded based on academic achievement, extracurricular involvement or specific talents. These can come from your school, private organizations or even local businesses. Be sure to explore all the scholarships you're eligible for as they can reduce your overall financial burden.

Work-Study Programs

Work-study programs offer students the opportunity to work part-time while attending school, often in on-campus jobs related to their field of study. Many schools also offer additional employment opportunities for students which can help cover living expenses.

While these are the most common types of aid, some other options may be available depending on your situation, such as military benefits or private educational loans.

What to Look For

The best financial aid offers are those that minimize the amount of debt you need to take on. Ideally, you want to reduce your reliance on loans, especially unsubsidized loans which accumulate interest while you’re in school.

The reality is that very few people can pay for their entire college education with just grants and scholarships. Tuition costs, fees and living expenses can add up quickly. When comparing financial aid offers be sure to look beyond just tuition and consider additional costs such as:

• Out of state fees if applicable
• Student activity or campus fees
• On or off-campus housing costs
• Food and dining expenses
• Technology fees
• Books and supplies
• Computers or other necessary equipment
• Utilities (if applicable)
• Internet fees (if applicable)

Ideally your financial aid package will minimize the need for loans. If loans are necessary, try to limit them as much as possible and prioritize subsidized loans over unsubsidized loans.

Conclusion

Seeking financial aid is an important step in your journey toward higher education. By comparing your options carefully and understanding the different types of financial aid, you can make a more informed decision that sets you up for success without overwhelming debt. Remember to prioritize grants and scholarships, minimize loans and carefully consider all associated costs, including living expenses.

For more helpful tips and resources to guide you through the financial aid process and beyond, be sure to visit Horizon Credit Union's Financial Training Ground. With a wealth of expert advice at your fingertips, you'll be better equipped to manage your finances and make the best decisions for your future.