4 Financial aid is money that is given, earned, or lent to help students pay for their education. Financial aid makes it possible for millions of students to go to college. The four types of financial aid Financial aid comes in four forms: grants, scholarships, work-study, and loans. Grants and scholarships are considered “gift help” be- cause they represent money that is given to students. Work-study and loans are considered “self help” because theyprovidemoneythatmusteitherbeearnedorrepaid. u Grant – money given, usually because of financial need u Scholarship – money awarded for exceptional academic achievement, an outstanding talent, and/or financial need u Work-Study – money earned by working at a part-time job u Loan – borrowed money that must be repaid Need-based and merit-based financial aid Most of the financial aid that’s awarded is “need-based.” Need-basedfinancialaid– This type of financial aid is awarded to students whose families do not have sufficient financial resources to pay for college. In other words, need-based financial aid goes to students who need help paying for college. When determining eligibility for need-based aid, a family’s financial situation is theonly thing that’s considered;thestudent’sacademicrecordisnotafactor. Grants, loans, and work-study are all examples of need-based financial aid. Part II Financial Aid Overview