What types of federal financial aid are available?

Federal financial aid includes grants, work-study, and loans. 1. Federal grants Grants are sometimes called "gift aid" because they generally don't need to be repaid (except under certain circumstances). They're usually distributed based on financial need rather than merit. After submitting the FAFSA, students may be eligible to receive the following federal grants: Federal Pell Grant: The Pell Grant is for students who demonstrate financial need. Students could receive up to $7,395 for the 2025–26 award year depending on need, cost of attendance, and enrollment status, but the amount varies each year. Federal Supplemental Educational Opportunity Grant (FSEOG): The FSEOG is administered directly by colleges' financial aid offices, but not all schools participate. If eligible, there are a range of awards depending on your financial need and available funding. Teacher Education Assistance for College and Higher Education (TEACH) Grant: Students who plan to pursue a career in teaching in a high-need field may be eligible for the TEACH Grant. However, you must agree to complete a teaching service obligation after graduation to receive it. If you don't fulfill the requirement, the grant is converted to a loan. 2. Federal work-study The Federal Work-Study Program provides part-time jobs to undergraduate and graduate students with financial need to help them earn money for college expenses. Job offerings are specific to each school and aren't necessarily guaranteed, even if you're accepted to the program. Spots are limited, and you need to apply for any available positions. Some quick facts about work-study: You can earn at least the federal minimum wage and there's potential to earn more based on the position and work-study award. You can work as much as your award amount allows. There are typically jobs available on campus or off-campus through college partners. Undergraduates are likely to be paid hourly, while graduate students may receive a salary. You'll be paid at least once a month. You may be paid directly by the employer unless you ask for the money to go toward your college expenses. 3. Federal student loans Grants and work-study typically don't require reimbursement. Federal student loans, on the other hand, are borrowed from the U.S. government and must be repaid, usually with interest. All federal undergraduate loans have a fixed interest rate, determined by Congress. These loans usually don't have to be paid back until after graduation, but students can begin making interest-only payments while in school. The sooner you repay your loan, the less money you will pay in interest. Types of federal loans include: Federal Direct Subsidized Loans: The government pays for interest on subsidized loans while the student is in school and during the six months after the student graduates or leaves college. You need to have demonstrated financial need and be an undergraduate to qualify. Federal Direct Unsubsidized Loans: Interest begins accumulating immediately on unsubsidized loans and the student is responsible for paying that money. It's available to all students, regardless of financial need. Federal Direct PLUS Loans: PLUS loans are available to parents of students. The parent is responsible for paying back the money. Federal loans may offer special benefits when it comes time for repayment, including income-based repayment, loan forgiveness, military benefits, and more.

A guide to types of federal financial aid for college students

Key takeaways

Federal financial aid for college students can include grants, loans, and work-study, depending on the individual’s demonstrated need.
You need to complete the FAFSA to be considered for any federal financial aid programs.
While federal grants and work-study money don’t generally need to be paid back, you will have to pay back any loans you accept plus interest.

Federal financial aid comes from the U.S. government, and depending on your financial need can include grants, work-study, and loans that can help you better afford college. To qualify, you need to complete the Free Application for Federal Student Aid (FAFSA). In this guide, we walk you through the various types of federal financial aid, plus cover a few other sources of college funding you should know about.

What is financial aid?

Financial aid, such as state and federal grants, work-study, loans, and private and institutional scholarships, is money to help pay for college or career school, making it more affordable. Depending on the source, you can use financial aid to pay for a variety of school-related expenses that include housing, tuition, fees, books and supplies.

What is federal financial aid?

Federal financial aid comes directly from the federal government and includes student loans, grants (like the Pell Grant), and work-study. Students can apply for federal financial aid by completing the FAFSA.

Available online every October 1 for the following academic year, students should submit the form as soon as possible. Delaying could cause you to miss out on grants, work-study programs, and other sources of financial aid, as money is granted on a first-come, first-serve basis

For more tips on completing the FAFSA, check out tips to make completing your FAFSA easier.

What types of financial aid are available?

Federal financial aid includes grants, work-study, and loans.

1. Federal grants

Grants are sometimes called “gift aid” because they generally don't need to be repaid (except under certain circumstances). They’re usually distributed based on financial need rather than merit.

After submitting the FAFSA, students may be eligible to receive the following federal grants:

Federal Pell Grant: The Pell Grant is for students who demonstrate financial need. Students could receive up to $7,395 for the 2025–26 award year depending on need, cost of attendance, and enrollment status, but the amount varies each year.
Federal Supplemental Educational Opportunity Grant (FSEOG): The FSEOG is administered directly by colleges’ financial aid offices, but not all schools participate. If eligible, there are a range of awards depending on your financial need and available funding.
Teacher Education Assistance for College and Higher Education (TEACH) Grant: Students who plan to pursue a career in teaching in a high-need field may be eligible for the TEACH Grant. However, you must agree to complete a teaching service obligation after graduation to receive it. If you don't fulfill the requirement, the grant is converted to a loan.

2. Federal work-study

The Federal Work-Study Program provides part-time jobs to undergraduate and graduate students with financial need to help them earn money for college expenses. Job offerings are specific to each school and aren't necessarily guaranteed, even if you’re accepted to the program. Spots are limited, and you need to apply for any available positions.

Some quick facts about work-study:

You can earn at least the federal minimum wage and there's potential to earn more based on the position and work-study award.
You can work as much as your award amount allows.
There are typically jobs available on campus or off-campus through college partners.
Undergraduates are likely to be paid hourly, while graduate students may receive a salary.
You'll be paid at least once a month.
You may be paid directly by the employer unless you ask for the money to go toward your college expenses.

3. Federal student loans

Grants and work-study typically don't require reimbursement. Federal student loans, on the other hand, are borrowed from the U.S. government and must be repaid, usually with interest. All federal undergraduate loans have a fixed interest rate, determined by Congress.

These loans usually don't have to be paid back until after graduation, but students can begin making interest-only payments while in school. The sooner you repay your loan, the less money you will pay in interest.

Types of federal loans include:

Federal Direct Subsidized Loans: The government pays for interest on subsidized loans while the student is in school and during the six months after the student graduates or leaves college. You need to have demonstrated financial need and be an undergraduate to qualify.
Federal Direct Unsubsidized Loans: Interest begins accumulating immediately on unsubsidized loans and the student is responsible for paying that money. It’s available to all students, regardless of financial need.
Federal Direct PLUS Loans: PLUS loans are available to parents of students. The parent is responsible for paying back the money.

Federal loans may offer special benefits when it comes time for repayment, including income-based repayment, loan forgiveness, military benefits, and more.

Other types of financial aid

The federal government isn’t the only source of financial aid for college. Here are a few other ways you can get money for your degree:

Scholarships: Through state governments, organizations, nonprofits, schools, and individuals, scholarships typically don’t have to be paid back. They can be based on merit, financial need, or other criteria. You can find scholarships you qualify for through databases, such as our Scholarship Search tool.
State grants: Almost all states offer financial aid to its residents. Most require students to complete the FAFSA and/or state-specific applications to apply. Each program is different, so research your state’s options ahead of time.
Employer tuition reimbursement: Some employers cover tuition for their employees or children of their employees. Program availability varies.
Private student loans: Private student loans from financial institutions can help you cover the gap between what you have and what you need to attend college. However, they have fewer protections, higher interest rates, and fewer repayment options than federal student loans.

Scholarships are available in more places than you probably think. Did you know we even award them at Citizens? You could enter to win our annual $15,000 scholarship towards school certified expenses.* No purchase necessary. You can learn more here.

Understanding all of your financial aid options

Paying for college can feel like an intimidating puzzle, but the best way to prepare for covering the cost is to understand what's available to you. Federal financial aid is just one piece, but it could be a crucial one. Complete the FAFSA each year and apply to scholarships throughout college, not just freshman year.

Citizens is here to help you navigate your student lending options for today and the future. Learn more about your options on our student lending page.

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* Citizens Scholarship: No purchase necessary. Void where prohibited. The Citizens Scholarship Sweepstakes is open to legal residents of the 50 United States, D.C., and U.S. Territories, who are 18 years of age or older, are students, or prospective students, or parents or legal guardians of students intending to enroll or enrolled at least half-time in an accredited undergraduate/graduate post-secondary institution. Sweepstakes begins at 5:01 PM ET on 3/31/26 and ends at 5:00 PM ET on 3/31/27. Sponsored by Citizens. See Official Rules for details.

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Disclaimer: The information contained herein is for informational purposes only, as a service to the public, and is not legal advice or a substitute for legal counsel. You should do your own research and/or contact your own legal or tax advisor for assistance with questions you may have on the information contained herein.