Types of Financial Aid
Financial aid is funds provided to students to help pay for postsecondary educational expenses. Many students use a combination of funding from scholarships, grants, work-study and loans to pay for college.
A scholarship is aid that you may qualify for based on academic performance, athletic skills, or other criteria. Scholarships are an appealing option because they don’t have to be paid back.
Grants
A grant is financial aid that doesn't have to be paid back. Grants may be offered by the federal or state government, college or a private foundation. A range of programs are available to help students who couldn’t otherwise afford post-secondary education.
- State Grants – Many states offer grants to residents pursuing college.
- North Dakota State Grant – Need-based grant awarded to ND residents attending ND schools full-time. Must complete the FAFSA by March 15 to be considered.
- North Dakota Scholars Program – Merit-based grant awarded to residents who score in the upper fifth percentile of all North Dakota ACT test takers.
- North Dakota Indian Scholarship Program – Assists American Indian students in obtaining a college education.
- Federal Grants – There are five types of federal student aid grants. To apply you will need to complete a FAFSA.
- Pell Grant – Need-based grant for undergraduate students.
- Supplemental Educational Opportunity Grant (SEOG) – Awarded to undergraduates with exceptional financial need. Complete your FAFSA early because funding can be limited. Check with your school’s financial aid office to find out its priority deadline.
- TEACH Grant – Awarded to students who intend to teach in a public or private elementary or secondary school that serves students from low-income families. Must maintain a cumulative grade point average (GPA) of at least 3.25.
Under a work-study program, you can work part-time to earn money for your education. Your campus may offer employment through Institutional and/or Federal Work Study (FWS) programs. These programs encourage community service work and work-related to the student’s course of study. FWS provides jobs for students demonstrating financial need. Contact the financial aid office at your campus for more information.
Education Loans
Students and parents may borrow money to pay for school. Education loans are excellent resources for students needing financial assistance. Keep in mind, loans must be repaid with interest. Failure to make your monthly payments on time can adversely affect your credit and your future ability to borrow for other purposes. A word to the wise, keep your level of student loan debt to a minimum. Remember, the level of debt you will be able to manage will vary depending on your lifestyle, income, and where you will be living.
Education loans come in three major categories: Federal Direct student loans, Federal Perkins loans, and private student loans (also called alternative student loans).
Effective July 1, 2010, all federal student loans come directly from the U.S. Department of Education under the Direct Loan Program. Students interested in receiving federal student aid should continue to complete a Free Application for Federal Student Aid (FAFSA) for each school year that they wish to be considered for aid. If you have any questions about applying for federal student aid, please contact (800) 433-3243 or visit Federal Student Aid.
The Direct Loan Program offers the following types of loans:
- Stafford Subsidized: for students with demonstrated financial need, as determined by federal regulations. No interest is charged while a student is in school at least half-time, during the grace period, and during deferment periods.
- Stafford Unsubsidized: not based on financial need; interest is charged during all periods, even during the time a student is in school and during grace and deferment periods.
- PLUS: unsubsidized loans for the parents of dependent students. PLUS loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is charged during all periods.
- Grad PLUS: available to graduate and professional students. Student is the borrower and must have acceptable credit. Payment may be deferred while attending school at least half-time.
- Consolidation: eligible federal education loans may be combined into one Direct Consolidation Loan.
- Private Student Loans – Alternative (or private) student loans help “fill the gap” in your financial aid package. These loans allow you to borrow the difference between what federal aid can cover and the true cost of your education. Alternative loans can be used to pay for tuition, fees, books, room and board, and more.
Another type of federal loan is the Perkins loan. This is a need-based, low interest loan made directly by the school and is repaid to the school.
