Grants
A grant is a form of financial aid that doesn’t have to be repaid, unless, for example, you withdraw from school and owe a refund. Review a guide from the Higher Education Student Assistance Authority for information about available state and federal grants.
Scholarships
Many nonprofit and private organizations offer scholarships to help students pay for college or vocational school. The criteria for this type of aid may be based on academic merit, talent, or a particular area of study.
Work Study
The Federal Work-Study Program allows you to earn money to pay for school by working part time. You’ll earn at least the current federal minimum wage. However, you may earn more depending on the type of work you do and the skills required for the position. Your total work-study award depends on when you apply, your level of financial need, and your school’s funding level.
Loans
A loan is money you borrow and must repay with interest. If you apply for financial aid, you may be offered loans as part of your school’s financial aid package. It’s important to understand your repayment options so you can successfully repay your loan.
Taxability
Many costs are included in the price of pursuing a degree, including your school’s tuition and fees, room and board, travel and transportation, and more. But what exactly does a scholarship cover? To be considered a tax-free award, scholarship dollars must be used for qualifying college expenses such as tuition and fees, textbooks and equipment, and other related costs. However, using scholarship dollars to pay for room and board or travel expenses could result in taxes being owed. Be sure to consult with the scholarship provider, your financial aid office, and a tax professional to get details on scholarship taxability.
Award Displacement
Award displacement refers to a situation where a student receives a private scholarship, which then leads to a reduction in other forms of financial aid offered by their college (e.g., grants, loans, or work study). This situation essentially negates the benefit of receiving the outside scholarship because receiving one type of financial aid causes a decrease in another, often due to the college adjusting the student’s overall aid package to stay within a certain cost of attendance limit.
Scholarship Seekers Scam Alerts
Be sure to check out the Federal Trade Commission’s website on ways to detect and avoid scholarship scams. You should never be asked to pay for scholarship or financial aid information. These resources are free for students and families to access. If you ever find yourself in a situation where you’re asked to pay for this information, it’s probably a scam.
