Know Your Financial Aid Options

Grants and scholarships are the best way to reduce your student debt burden after college because they do not have to be repaid.

Grants and scholarships help millions of students cover college costs, and are your best bet for helping you pay for college. This type of financial aid is sometimes called “gift aid” because it doesn’t need to be repaid.

You can receive grants and scholarships for different reasons:

  • Financial aid you receive because of financial need is called “need-based aid.
  • Financial aid that you receive for reasons other than financial need, for example academic achievements, personal background, or career interests, is called “non-need based” or “merit aid.”

You can also receive grants and scholarships from different places, including the federal government’s Department of Education, state governments, colleges and universities, and private organizations.

Pell Grants

The Pell Grant is a need-based grant provided by the U.S. Department of Education to undergraduate students with significant financial need. If you’re eligible for a Pell Grant, how much you receive depends on your level of financial need and whether you are a full-time or part-time student. For more information on the Pell Grant, the U.S. Department of Education Federal Student Aid Office has some helpful resources, including this guide to other, smaller federal grant programs.

Did You Know? Millions of students, the vast majority of whom come from families earning less than $40,000 a year, receive a Pell Grant every year. The maximum Pell Grant award typically changes each year (for the 2020-2021 academic year, the most you could receive was $6,895).

Work Study: Financial Aid You Earn 

The federal work study program gives you an opportunity to earn money in a part-time job to help cover expenses you face during the year. Work study aid is not a guarantee of money or a job — if your school offers you work study, the amount of aid you actually receive will be based on the hours you work in a qualified job that you secure yourself. 

Grants and Scholarships

Grants and scholarships can also come from states and colleges themselves, which often operate their own financial aid programs. Whether and how much aid you can receive from these programs varies. Some states and colleges have significant funding available, and others have more limited resources. States and colleges also make their own decisions about who receives available aid. Some prioritize need-based aid, others require some level of academic achievement, and others use a combination of both need and merit requirements. 

Be sure to check with your school’s financial aid office to learn more about what state and institutional aid may be available.

Some colleges operate emergency aid programs to help students dealing with unexpected expenses. If you find yourself with surprise costs that will make it hard to stay enrolled, make sure to contact your school’s financial aid office to see if any emergency aid is available. Some colleges also provide other supports, like food pantries, that can help you cover essentials.

Many private organizations, including businesses, nonprofit organizations, and philanthropies offer private scholarships. Each of these programs is different, with a range of eligibility requirements. 

To support your search for private scholarships, you can use the U.S. Department of Labor’s CareerOneStop Scholarship Finder tool.

Know Your Student Loan Options. Even with savings, paying for college out of pocket is not possible for the vast majority of American families. Borrowing money through loans is one option to help cover college costs that remain after you’ve exhausted all your grant and scholarship options. 

Click here to learn more about borrowing to help pay for college. Our Affordability Calculator can help guide you on the maximum amount that is recommended to borrow.  

A resource from the Peter G. Peterson Foundation, created with support from The Institute for College Access and Success (TICAS)