What Are the Four Basic Types of Financial Aid?

There are four basic types of financial aid; scholarships, grants, work study and student loans.

There are four basic types of financial aid:

• Scholarships: Scholarships are often merit-based, and are available on a limited basis for certain qualities or programs. 
• Grants: Grants are also based on particular needs or merit, and they could be offered by an institution, the government, or a particular funding program. 
• Work study: Work study allows students to do jobs on campus for a small amount of pay, often with the intent that students can do their homework while performing their job responsibilities. 
• Student loans: Student loans are given by outside lenders that students will have to pay back over time. 

These four types of financial aid have particular benefits as well as some disadvantages.

Scholarships and Grants:  Money Based on Merit and Program Opportunities

If you are a top level student or are talented at music, sports, or some other activity, you might be a perfect candidate for scholarships and grants. You will need to research these various opportunities.  You'll need to be able to  showcase your talent via an application or recruitment process. 

Some of these scholarships and grants might be offered through your school, but with a simple online search, you can also find out information about grants online and scholarship programs as well. Your town or local businesses also might offer scholarship programs.  

Work Study: An Opportunity to Earn While Learning

If you are interested in working several hours a week at a desk while studying, a work study opportunity is perfect for you. You can apply for work study jobs, and often individuals are given the opportunity when they are applying for financial aid to get a certain amount of money from such an opportunity.  

Student Loans:  Outside Loans to Cover the Rest

If you are still lacking the funds you need for school, then you will probably have to get student loans. These are loans designed for individuals looking to finance part or all of their educational costs, and they might take a long time to pay off.  If you are still looking for more information about what are the four basic types of financial aid, speak to a financial counselor at your school or local financial institution to learn more about your options. 

Do You Need Financial Aid?

Not many young people or parents realize just how expensive an upper level education can be. It can cost $50,000 for tuition, room, and board alone, never mind additional expenses that come with the cost of living at a school. The actual cost of living at a college and studying can be thousands of dollars extra. Parents may, or may not, be able to afford the entire cost or they may choose not to help. Many parents are under the misconception that their children at college or university need money because they are spending too much on parties and social activities, but the truth is, it costs a lot for everyday incidentals: printing supplies, books, school supplies, activity and lab fees…everything adds up.