Financial Aid 101

Your coaches introduce the next steps in making higher education affordable.

AliciaIf you and your family have saved some of the money you need to pay for your child’s education but still need more, there may be a solution. It’s called financial aid.

CassieThere are several kinds of financial aid. To keep things simple, let’s divide it into three main categories:

First, there’s money that’s given to you that you don’t have to pay back, like grants and scholarships. Second, there’s money that a student earns by working part-time, usually on campus. This is called the Federal Work-Study program. The third category is the money you borrow. These are loans that you do have to pay back. Student loans are available from three main sources: the U.S. federal government, state governments, and financial institutions, like banks. Some families also use home equity loans to help pay for education expenses.

AliciaFinancial aid — the combination of money you receive, money you earn, and money you borrow — all added to the money you save — can make it possible for you pay the cost of higher education, whether that’s at a college, community college, trade school, or technical school.

CassieThis is just a quick overview. For a lot more information about financial aid — including how to complete a Free application for federal student aid, or FAFSA — see the School & $ section of the Hands on Banking course for Young Adults.

Remember these key points
$ received, earned, borrowed:

  • Grants & scholarships
  • Work-study program
  • Loans — public and private

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