The
College and Career
Library

The Basics of Financial Aid (very basic)

Loans | Grants and Scholarships | Where do Grants come from? | Application Process | Work Study

Loans: the basics

We say this on just about every financial aid web page on this website, that one of the BEST places to find out about any type of financial aid is a college financial aid office. We cannot emphasize that enough. The financial aid staff are trained to keep up with the latest information on loans, grants, scholarships, and other forms of financial aid for college.

There is a lot of literature on the subject of loans, grants, and scholarships. We are not going to duplicate what so many others have created. We would rather direct you to websites and resources that will give an excellent summary of various forms of financial aid. Before we give you the list of websites, we will mention a few things.

Loans ARE loans. A few things to keep in mind about LOANS, are:

• You have to pay back loans, often with interest. You have to pay back loans, with interest. We repeat this because for most people, long after they are done with college, they will continue to pay on those loans.
  
  
• There are all kinds of loans out there. There are rules, regulations, deadlines, and things like that, which are attached to loans. One the best places for finding information about any kind of financial aid, especially loans, is the FINANCIAL OFFICE at a college or university. The staff at these offices can keep up with the latest information about financial aid.
  
  
• The Free Application for Federal Financial Aid (FAFSA) is an EXTREMELY important form that you NEED to fill out in order to apply for federal and state aid.
  
  

The following websites will provide some general, overall, basic information about loans and other forms of financial aid.

The U.S. Department of Education is responsible for producing millions of dollars in financial aid. The following website will give information about federal financial aid. As we state above, the Free Application for Federal Financial Aid (FAFSA) is an extremely important form that you need to fill out in order to apply for federal and state aid.

https://studentaid.gov/

https://studentaid.gov/understand-aid/types

https://studentaid.gov/understand-aid/types/grants/pell

https://studentaid.gov/h/understand-aid/how-aid-works

https://studentaid.gov/understand-aid/eligibility

https://studentaid.ed.gov/sa/types

College Scholarships.org is an excellent site for finding information about loans, as well as grants and scholarships. It is worth your time to explore this site with its many links, because there is a A LOT of helpful information about college on this site. http://www.collegescholarships.org/loans

Peterson's is a well-respected company that has been devoted to providing information about colleges, for decades. There is plenty of information on this site about different aspects of college and other forms of education, such as high schools and trade schools.

GO COLLEGE is a great site for the beginning student for finding out about all kinds of information about college. It would be worth your while to explore this site. Go College explains about Federal student LOANS at the following two links:

http://www.gocollege.com/financial-aid/

http://www.gocollege.com/financial-aid/student-loans/federal/

Scholarships.com is another excellent site to find information about college, especially financial aid. We will provide you to the link that gives information about Federal Aid. http://www.scholarships.com/financial-aid/federal-aid/federal-aid.aspx

Grants and Scholarships: the basics

Most people prefer to receive grant and scholarship money because money from grants and scholarships does NOT need to be paid back. Grants are "granted" to people and the money does not need to be paid back. Most people think of grants and scholarships as the same thing, but there is a slight difference, or two. Many scholarships are awarded based on some merit (merit-based). For example, a specific scholarship may have a requirement that a student will receive the scholarship money if the student can maintain a 4.0 grade point average through college. As soon as the student's GPA falls below 4.0, the scholarship money will stop. The student does NOT have to pay back any of the money awarded to him/her so far. However, the student will not receive any more money from the scholarship fund until the student gets the GPA back up to 4.0. Most people think of grants and scholarships as the same thing because you do not need to pay back any money.

There are different schools of thought about obtaining free money in the form of grants for a college education. One group of people believes that there are loads of grant money out there for the taking and it is easy to get. The opposite view is that there really is not that much money available for people. Our view is somewhere in the middle. There is money out there, but the supply is nowhere near the amount that is needed to meet the demand. Another thing to keep in mind is that it seems that most grants and scholarships are awarded to individuals based on very, very, limiting, specific eligibility requirements. The Grants and Scholarships Web Page will provide sources (books and websites) that will list hundreds of thousands of grants and scholarships. However, finding the right financial aid that YOU qualify for will take A LOT of patience and effort on your part. We will not go into detail because once you start looking for grants, you will see what we mean. Financial aid can be awarded based on all kinds of criteria such as: age, ethnicity, family status (single mom), field of study (career goals), financial status (poverty), gender, grade point average (GPA), health status (disability), military status, place of residence, workplace, and more. Let us give you an example on how this can work. Let's say that a Hispanic female by the name of Joan wants to obtain a grant for attending college to get a degree in accounting. She lives in Minnesota. She is a single mom. Joan served in the military and suffered an injury that qualifies her as having a disability. Joan is struggling financially. When Joan goes to the grant page and researches grants, she qualifies for SEVEN (at least seven) different kinds of grants. Joan can look for

• Financial aid intended for females
• Financial aid intended for Hispanics
• Financial aid intended for "single moms" or single parents
• Financial aid intended for veterans
• Financial aid intended for the disabled
• Financial aid for people considered to be living in poverty (needs-based).
• Financial aid for people living in Minnesota (grants awarded by Minnesota Department of Education)

Okay, some of this might be a little far-fetched, BUT maybe not. At least, this example gives you a good idea of the criteria associated with so many, many, grants and scholarships. It is easy to see how people can become frustrated when searching for "free money" for college. A man might find a scholarship that sounds perfect, but he finds out that the grant is only for females. A student can find a scholarship that sounds great but then finds out that the scholarship is for people who live in a specific city, but the student does NOT live in that city. This is why we say that there is some free money out there, but not everyone will qualify for every grant. It will take a lot of patience and effort to find, apply, and successfully be awarded a grant, or scholarship.

Where do Grants and Scholarships come from?

Financial aid can come from a variety of sources. Here are just a few examples:

• Organizations and associations. Just about any type of organization that you can think of might award grants. We are talking about all kinds of different organizations and associations whether it has to do with business, ethnic groups, medical conditions, social groups, political groups, and you name it.
  
  
• Federal, State, and Local governments.
  
  
• Corporations, companies, and employers.
  
  
• Foundations.
  
  
• Colleges and other forms of educational institutions.
  
  
• Religious groups.
  
  
• Military

As you can see, you can spend a lot of time figuring out where to search for the grant that is right for you. That is why it is so helpful to use indexes (or free scholarship search services) like what you can find on the Grants and Scholarships Web Page.

Applying for the Grant

Okay, let's say that you found a grant that you qualify for. Now, what? It would be nice if all that you had to do is fill out the application form, send the form in, and have the selection committee choose YOU as the recipient of their money. It would be nice, BUT it does not always work out that nicely.

Usually, a selection person or committee will be in charge of reading the applications and choosing the right candidate for the grant money. As you can imagine, the competition for "free money" can be fierce. Often, selection committees are looking for specific qualities in the applicant:

• If an organization is going to give money to a person, the organization wants to make sure that the money will not be wasted. They want to pick a recipient who they feel will take that money, apply themselves, and succeed in reaching his/her educational and career goals.
  
  
• Grade Point Average (GPA) can help decide on who gets a grant. We know how difficult it is to get good grades. We KNOW. However, GPA is a way for the selection committee to help determine if you have the discipline and ability to do what is necessary to succeed.
  
  
• Organizations look for evidence of selflessness, leadership, and ability to succeed at just about anything that you put your mind to doing. This is where it is helpful to list as much relevant information that you can to help show them these attributes. This may include places of employment, volunteer efforts, and community service.
  
  
• Read the grant proposal / application carefully. It is kind of like a job posting. In the cover letter for a job, you need to address the key job requirements. You need to do something similar for applying for a grant. For example, here is a quote from a Union Plus Scholarship: "Applicants for scholarships are evaluated according to academic ability, social awareness, financial need and appreciation of labor."
  
  It would be helpful to address each of the components listed in the application:
  
  
  • "Academic ability": here is where GPA helps.
    
    
  • "Social awareness": this is where a list of community or volunteering efforts will pay off for you.
    
    
  • "Financial need": the application form might require you to fill out some financial information. The organization might have access to the FAFSA form that you may have filled out for some other attempt at obtaining funding, like for a college. This would be considered a "needs-based" grant and the selection committee would decide, according to their opinion, if you really need their help financially to pay for college.
    
    
  • "Appreciation of labor": This particular grant is coming from an organization of unions (labor unions). Naturally, the selection committee would like you to address your appreciation of labor (probably, it would help to mention how unions have had such a positive effect on you and society, EVEN if you do not believe it. )
    
    

Letters of Recommendation: It is important to have a few letters of recommendation from people who can write a very positive picture of you, including positive characteristics as mentioned above. The more impressive the letter sounds AND the more impressive the credentials of the person who is recommending you, THE BETTER.

PLEASE check over spelling, punctuation, grammar, and etc. before sending the application.

If you are not awarded the grant, please send a THANK YOU letter telling them that you appreciate them considering you for the grant (although, they may not have noticed your application.) The thank you letter can be a very effective means to get their attention the next time that you can apply for the grant.

We are sure that there are other things that we could say, but we will end this part of the grant application process by saying that we hope that you succeed in obtaining the financial aid that you need. Please hang in there.

Work Study

Work study is not a grant but is a form of financial aid that we will mention. Many colleges will hire students to help run the college. It provides a win/win situation. The college gets workers to help do jobs around campus, and the government pays for most of the wages. Students get money to help them pay for college. Basically, the federal and state government grants money to a college so the grant money pays for most of the student-assistant's weekly or biweekly salary. The student benefits from work study a couple of different ways, besides just receiving money. Some students can be hired in areas of the college where they can receive valuable work experience. For example, a student who wants to get a degree in computer science, might be able to be employed in the college's information technology department. Something else to keep in mind is that most departments that hire student-assistants are very flexible when it comes to scheduling students to work. Departments have a tendency to "work around" a student's class schedule.