Grants, scholarships, loans and work-study

Grants and who awards them

A grant is aid you generally keep without repaying it. The federal government funds the Pell Grant, which goes mainly to undergraduates with financial need who have not yet earned a bachelor's degree, and the FSEOG, which schools hand out from a limited pool. Your state may run its own grant programs, and many schools award grants from their own funds.

Each grant comes with conditions. If you withdraw partway through a term, federal rules can require part of a grant to be returned, and some state grants require you to keep a certain enrollment level. State programs often set deadlines earlier than the federal one, so check your state agency's dates as soon as you file.

Scholarships and how they affect the rest

Scholarships come from schools, employers, community groups, religious organizations and private foundations. Some reward grades or talent, some look at financial need, and some are tied to a field of study or a hometown. Each scholarship sets its own application, deadline and renewal terms.

Tell your financial aid office about any outside scholarship you accept. The school has to count it, and need-based aid cannot exceed your need, so another part of your offer may shrink. Many schools trim loans or work-study first, but the policy varies, so ask yours how it handles the change.

Loans, federal and private

Loans are repaid with interest, which sets them apart from everything else in an offer. Direct Subsidized Loans are for undergraduates with financial need, and the government covers the interest while you are enrolled at least half-time. Direct Unsubsidized Loans build interest from the day the money is paid out, and a parent of a dependent undergraduate can apply for a Parent PLUS loan, which involves a credit check.

Private loans come from banks, credit unions and other lenders rather than the government. They usually lack federal options such as income-driven repayment and federal deferment, and their rates depend on credit. Ask your aid office about every federal option before you turn to a private lender.

Work-study and how it pays

Federal Work-Study gives you the chance to earn money at a part-time job, often on campus or with a community service employer. The amount in your offer is the most you can earn under the award that year, and you are paid by paycheck as you work the hours. The money does not come off your bill at the start of the term, so plan for it as income during the year.

A work-study award still requires you to find and keep a job. Ask the aid office or the campus employment office where postings appear, and apply early, since positions can fill quickly. Taking part in work-study can also matter for SNAP, because it is one of the exemptions to that program's student rule.

How the pieces stack in an offer

Most offers list the cost of attendance first, then grants and scholarships, then work-study and loans. Subtract the grants and scholarships from the cost, and what is left is the amount you would cover through work, savings, family help or borrowing. That remainder is a clearer figure to compare between schools than the total aid number.

You can accept, reduce or decline each loan and the work-study award separately. Schools present offers in different formats, so if two offers look hard to compare, ask each aid office to walk you through its own.

Have these in front of you

• Each school's aid offer
• Each school's published cost of attendance
• Award letters for any outside scholarships
• Your state grant notice, if one came