Understanding Financial Aid

There are three types of financial aid available

1. Grants And Scholarships

Grants and Scholarships are often called “gift aid” because they do not need to be paid back. The Federal government issues need-based gift aid in the form of Pell Grants, while the Pennsylvania state government offers grants and scholarships through the Pennsylvania Higher Education Assistance Agency (PHEAA). Colleges may also offer need-based and/or merit-based grants and scholarships to students that meet specific criteria. Private organizations, like companies, religious organizations, and non-profits also offer scholarships and grants to college students.

2. Work Study

Work study is a form of financial aid that allows you to earn money by working part-time for your college or a participating non-profit. The money you earn is paid directly to you, but you can request that it be sent to your school to pay for tuition.


  1. Being offered Federal Work-Study does not guarantee you a job
    • In order to receive work-study funds, you need to earn them, which means you need to start by finding a work-study job.
  2. Work-Study earnings are removed from your FAFSA calculation for next year
    • Benefit alert: Work-study earnings do not count against you when you complete the following year’s FAFSA form.
  3. Federal Work-Study is not guaranteed from year to year
    • Several factors like family income or financial need will determine if you receive work-study each year.


  1. Students who are offered work-study receive funds in a paycheck
    • Paychecks are based on hours worked, just like a normal job.
  2. Pay may vary
    • Like all jobs, work-study jobs vary in qualifications and responsibilities so the pay will depend on the job that you are hired to do.
  3. Hours worked may vary
    1. Your weekly hours will depend on the type of job you get and your employer’s expectations.


  1. Some Work-Study jobs include positions with nonprofit employers
    • This means some work-study jobs are available for off-campus work. Contact your school’s financial aid office to find out what’s available.
  2. Work-Study jobs may be limited
    • Many campuses offer jobs for students with or without work-study. Apply ASAP to save your spot!
Information from studentaid.gov

3. Loans

When you apply for financial aid you may be offered loans as part of your financial aid offer.
If you have to borrow money, federal loans should be your first choice. Federal loans are offered at a low interest rate, and there is a grace period, meaning you have time after graduating before you have to start repaying. There are two basic types of Federal loans:

  • Subsidized
    The US Department of Education will pay interest on your loan while you are enrolled in school at least half time, for the first six months after you leave school and during a period of deferment.
  • Unsubsidized
    You will be responsible for paying the interest that is charged to your loan while you are enrolled in school, as well as the original amount you borrowed.

Parents may also borrow money to help pay for their student’s education through the federal Parent PLUS loan program. Like federal student loans, Parent PLUS loans offer lower interest rates than loans from a bank.

If you do not receive enough federal or institutional aid to cover the cost of your degree, you may have to take out a private loan. Private loans should be a last resort because they tend to have high interest rates and might require payment while you are still in school. Make sure you have exhausted all other avenues of aid. You must apply for private loans separately – they are not included in the FAFSA. Use this comparison chart of the major private loans available to compare interest rates, term limits, and award limits. You can also visit ClarifiCollege.org and check out their loan calculator. This calculator will help you borrow responsibly.

More Financial Aid Resources:

  • To learn more about grants, scholarships, work-study and loans visit the U.S. Department of Education’s Office of Federal Student Aid.
  • Visit this website to help find affordable colleges and universities.
  • To learn more about the student loan process use this helpful guide.