Paying for College: Government Loans, Grants, and Scholarships

As students prepare to graduate from high school, college looms large in their minds and the minds of their parents. One of the main concerns about college is how to pay for it. Many students feel overwhelmed when they see what the next four years of their education will cost them. If students can’t pay for college themselves (and with the rising cost of tuition, who can?), there are three options: government loans, grants, and scholarships.

The first thing students should do to qualify for any of these three is fill out the Free Application for Federal Student Aid (FAFSA). This form is required by nearly every college and is often the basis of the student’s financial aid package. The FAFSA determines the amount of federal student loans, federal work-study, grants, and some college scholarships. The FAFSA can be completed on the internet at

It’s important to note the differences in the types of financial aid students may receive. Government loans are just that, loans. They will have to be paid back after the student graduates. Typically, these loans have a six-month grace period following the student’s graduation, but if student drops out of school for more than one semester, they may have to start paying back their loans during the time they aren’t in school. Parents can also take out loans to help their children through college, and these loans generally have a similar six-month grace period.

Students hear a lot about consolidating their student loans, and this is an option recent graduates will definitely want to take advantage of. Consolidating takes all of the loans a student has acquired over their college career and combines them into one loan. It also locks in the loan’s interest rate, so the rate will never change no matter how long it takes a student to pay off the loan. Be aware, however, that the six-month grace period may be disregarded by some loan companies if a student consolidates immediately after graduating. Be sure to ask about that when considering a consolidation company.

Grants and scholarships, on the other hand, do not have to be repaid; however, most require students to keep a specific grade point average while in school. Grants are funds generally given by a donor outside of the college and can include government funds or money from individuals. Students usually have to research and apply for grants outside of their college financial aid packet. However, many grants are listed on the internet, and a little searching will turn up a long list of them.

Most of the scholarships a student will receive come from their college. Some of these scholarships are awarded based on incoming student’s GPA, ACT or SAT scores, or FAFSA. When applying for admission, students should fill out a general scholarship form for the college. This form covers all of the basic scholarships for that college; however, many colleges have scholarships set up for specific majors which may not be covered by the general scholarship form. Students should ask their admissions councilor about additional scholarships.

In addition to college scholarships, students may also receive scholarships from organizations and companies. Information about many of these scholarships is available on the web from directories like or, which allow students to view scholarships by major, location, or other criteria. Many of these scholarships are offered by corporations such as Coca-Cola or Wal-Mart, but some local groups also provide scholarships. Rotary Clubs, for example, often offer scholarships to students who meet specific requirements.

Finally, there is another source of paying for college: work-study jobs. These are on-campus jobs, such as working in the library or computer lab, that students can apply for and work at during the school year. Like grants and scholarships, work-study money does not have to be paid back and, as an added bonus, work-study funds are paid directly to the student as a salary. This means students don’t have to even use the money for tuition!

The many types of financial aid can be confusing, but with a little reading, the differences become pretty clear. For students in doubt, college admissions councilors and financial aid directors can help clear up any confusion they may have about specific loans, grants, or scholarships.

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