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For many people, federal financial aid is critical in order to afford the cost of college. It can come in different forms — some don’t have to be repaid (free money), others do.
Here’s a rundown of the federal financial aid that you could qualify for.
Grants, like scholarships, are sometimes called gift aid because they don’t need to be repaid. Grants are usually distributed based on financial need rather than merit.
After submitting the Free Application for Federal Student Aid (FAFSA), students who demonstrate financial need may receive the following federal grants:
The Federal Work-Study Program provides part-time jobs to undergraduate and graduate students. These jobs allow students to gain career experience and earn money for college. These jobs are specific to each school, so availability of work-study jobs differs from one college to the next. Students in the program will earn at least the federal minimum wage, and can work as much as their award amounts allow.
Jobs in the program could be on campus or off campus. However, even if you qualify for a work-study award, jobs aren’t guaranteed. You must still search and apply for available positions.
Undergrad students are paid hourly; grad students, either hourly or by salary. You’ll receive payment from the school at least once a month; you’ll receive payment directly, unless you request the funds to go directly to your bank account or back to the school to cover education expenses.
Work-study isn’t technically free money; you’re earning it by working. Still, it provides another source of funding for school, just like grants.
Grants and work-study don’t require reimbursement. Federal student loans, on the other hand, are borrowed from the federal government and must be repaid, usually with interest. All federal undergraduate loans have the same fixed rate, determined by Congress.
These loans don’t have to be paid back until after graduation, but students can begin making payments at any time, even if they’re interest-only payments. The sooner you repay your loan, the less money you will pay in interest.
New undergrad students can apply for loans through the Federal Direct Loan Program. The program includes:
Note: Subsidized loans are based on financial need.
Federal loans also offer special benefits when it comes time to repay, including income-based repayment, loan forgiveness, military benefits, and others.
Paying for college can feel like a puzzle at times, and an intimidating one at that. But the best way to be prepared for covering the cost is to know all of your options. Federal financial aid is just one piece; depending on your financial need, it could be the most crucial one of all.
We are committed to helping you reach your potential. If you have questions, or would like more information about how to pay for college, please call 1-888-411-0266 to speak to a Student Lending Specialist, visit us online, or stop by your nearest Citizens Bank branch.
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