Definition of financial aid for college students

Can someone explain the basics of financial aid for college students? I'm trying to understand the different types of aid and how they work, especially for someone just starting the college application process.

Sure, I'd be happy to break down the key elements of financial aid for you. In general, financial aid is any funding available to students that helps pay for their education-related expenses.

1. Grants: These are financial aid funds that don't need to be repaid. They can come from various sources such as the federal government, state governments, individual colleges, and private organizations. The most common federal grant is the Pell Grant, which is awarded based on financial need.

2. Scholarships: Like grants, scholarships are also 'gift aid' and do not need to be repaid. They are often merit-based, meaning they're awarded for things like academic achievement, athletic ability, or special talents. Some are also need-based or based on specific criteria such as belonging to a certain demographic group.

3. Work-study: This is a federally-funded program that provides part-time jobs to students with financial need, allowing them to earn money to help pay for education expenses. Typically, these jobs are designed to be flexible around students' academic schedules.

4. Loans: Loans are borrowed money that must be repaid with interest. Student loans can come from the federal government or private sources. Federal student loans usually offer lower interest rates and more flexible repayment options than private loans.

Remember that all students who want to be considered for financial aid must complete the FAFSA (Free Application for Federal Student Aid), which determines your eligibility for federal aid. Keep an eye on deadlines as they can vary for different colleges. Make sure to apply early as some financial aid is awarded on a first-come, first-served basis.

Additionally, there's a difference in the terminology - the ' Expected Family Contribution (EFC)' is replaced by the Student Aid Index (SAI). Essentially, it is the number used to determine the amount of federal student aid you are eligible for.

I hope that gives you a basic understanding of financial aid. It can be a complex topic, so don't hesitate to ask if you have more specific questions!