Financial aid has become indispensable to anyone applying for a school/ college education in today’s world. The main reason for this is the escalating cost of education. You need money not only for the tuition and exam fees but also for meeting the cost of books, food, boarding and much more. So, you require lots of cash and it would be better if you look at various avenues to gather the same. There are so many perplexing options available for students that you really need help to understand the same.

Types of financial aid:

The various types of finance available for students fall under three categories.

They are:

• Free money
• Low-cost money
• Work money

i) FREE MONEY:

Free money refers to those amounts that help towards your education and which need not be repaid. You don’t have to pay any interest nor repay the principal too. These are mostly of two types-scholarships and grants.

Scholarships

Scholarships are awarded to those students who are academically very bright and have a bright future. These students are sometimes poor and have parents who are not financially stable enough to meet the escalating fees. In spite of these disadvantages, these scholars are intelligent and hardworking. They excel in their studies and are awarded scholarships. These may be of various types depending on who is awarding the same. There are school scholarships, college scholarship, local and state scholarship.

Grants

A grant may be awarded by a University or by the government to encourage study in a particular stream.

ii) LOW-COST MONEY:

Low-cost money means student loans. These carry better interest rates than the normal loans. You also don’t have to repay the same till you finish your college.

Types of student loans

Student loans are of two types-federal loans and private loans. Federal loans are awarded by the federal government while private loans are given by private lending companies. The former has many more advantages and favorable terms as compared to the latter.

iii) WORK MONEY:

While pursuing your education, you can take up a small part time job in your college itself or in some place nearby and earn a few extra dollars. This will help you get by your college expenses. However, be careful. Don’t allow your job time to swallow up your college and study time.

Knowledge about all these options is absolutely essential before going in for each of them. Plan your finances properly and you can wheeze through college easily.