Paying for College

Paying for college can be a daunting taskóbut it doesnít have to be. Use our tips, articles to stay up to date on the best ways to pay for college, including scholarships, savings, grants, loans, and more. To make the most of available funding, it is important to understand the different types of aid.

Financial Aid Sources for College:

(Suggested Read: Financial Aid Guide for Students; FAFSA; EFC; Financial Aid FAQs)


Money provided by the federal or state government based on a student's financial need, and possible academic achievement or other factors. Grant aid does not need to be repaid.  The U.S. Department of Education offers a variety of federal grants to students attending four-year colleges or universities, community colleges, and career schools. To obtain federal or state grant every student require to complete and submit the Free Application for Federal Student Aid (FAFSA).

1. Federal Pell Grant: unlike a loan, does not have to be repaid. Federal Pell Grants usually are awarded only to undergraduate students who have not earned a bachelor's or a professional degree. Amounts can change yearly. However, the grant amount students get, depend on- their financial need; their cost of attendance; their status as a full-time or part-time student; and their plans to attend school for a full academic year or less.

 Note: Students cannot receive Federal Pell Grant funds from more than one school at a time.

2. Federal Supplemental Educational Opportunity Grant (FSEOG): is a grant for undergraduate students with exceptional financial need. The FSEOG does not need to be repaid. The FSEOG program is administered directly by the financial aid office at each participating school and is therefore called ďcampus-basedĒ aid. Not all schools participate.  Students should check with their school's financial aid office to find out if the school offers the FSEOG. Students can receive between $100 and $4,000 a year, depending on their financial need; when they apply; the amount of other aid they get; and the availability of funds at their school.

Each participating school receives a certain amount of FSEOG funds each year from the U.S. Department of Educationís office of Federal Student Aid. Once the full amount of the schoolís FSEOG funds has been awarded to students, no more FSEOG awards can be made for that year. This system works differently from the Federal Pell Grant Program, which provides funds to every eligible student.

3. Iraq and Afghanistan Service Grants: if a student's parent or guardian died as a result of military service in Iraq or Afghanistan, they may be eligible for an Iraq and Afghanistan Service Grant. This provides money to college or career school students to help pay their education expenses. However, Iraq and Afghanistan Service Grants have special eligibility criteria.


Is financial award for students to further their education. Scholarships are awarded based upon various criteria, which depends on the goal and purpose of the donor. Scholarship money is not required to be repaid. Grants are often need-based, while scholarships are usually merit-based.

Common Categories of Grants and Scholarships :

Tax Benefits:

The Internal Revenue Service (IRS) provides tax benefits for education. These The tax benefits can be used by students to get back some of the money they spend on tuition, loan interest etc. Two tax credits help offset the costs (tuition, fees, books, supplies, equipment) of college or career school by reducing the amount of a student's income tax:

1. The American Opportunity Credit: allows each student to claim up to $2,500 per year for the first four years of school as the student works toward a degree or similar credential.

2. The Lifetime Learning Credit:  allows each student to claim up to $2,000  per year for any college or career school tuition and fees, as well as for books, supplies, and equipment that were required for the course and had to be purchased from the school.

Educational Loans:

Money borrowed by students to pay for educational expenses. Loans must be repaid with interest.

1. Federal Stafford Loan Program: are available to both undergraduate and graduate students. Stafford loans are provided through the Federal Direct Loan (Direct Loan) Program, meaning the federal government provides the funds for the Stafford loan. There are two types of Stafford loans:

2. Federal Graduate PLUS Loan Program: master's, doctorate, and certificate students can use PLUS loans to bridge the gap between other financial aid and full tuition. The Graduate PLUS loan has a fixed interest rate, and repayment can be deferred until after graduation.

3. Direct Consolidation Loans: allows students to combine all of their eligible federal student loans into a single loan with a single loan servicer.

4. The Federal Perkins Loan Program: is a school-based loan program for undergraduates and graduate students with exceptional financial need. Under this program, the school is the lender.

Federal Work-Study:

Are part-time job programs for students to earn money for college expenses. Undergraduate/graduate students with work-study jobs generally work part-time or on/off-campus while enrolled. Hereís a quick overview of Federal Work-Study:

Private Scholarships and Grants:

There are many college scholarships and grants that are offered by national private or non-profit organizations. Private scholarships can include aid provided by a student's high school, local community, service clubs, private companies or any other foundation, religious organization, community organization, and civic groups. Private sources of aid usually have  restrictive requirements to qualify, and many scholarships can be highly competitive based on grades, achievements and a student's talent. Financial aid from private sources can affect a student's financial aid status at the college they choose to attend. Colleges request students to inform any awards made directly to them. Private scholarships or grants are calculated into a student's financial aid package.

(Read: Scholarships for International Students)

State Aid Programs:

Grant or financial aid programs in various forms are provided in all U.S. states. These programs may vary in their eligibility requirements depending on each individual state's Department of Education or higher education agency. However, many of these programs are jointly funded by the state and the federal government through the Federal State Student Incentive Grant Program. There are some basic requirements for almost all state grant programs. Students need to be a resident of the state awarding the grant. Most states also require that students attend a college within their state of residence, provided they receive state aid. For detailed information about the grants and scholarships available in each U.S. state, visit: The U.S. Department of Education site.