Main types of financial aid for students

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Grants & Scholarships

Grants and scholarships are considered "gift aid" or free money, which means they do not have to be repaid.
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Federal Work-Study

Federal work-study allows students to work part time on or near campus while in college.
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Student Loans

Student loans are sums of money that help students pay for school and must be repaid.

Grants and Scholarships

Grants and scholarships are types of "gift aid" or free money, which means they do not have to be repaid. They are available through federal and state governments, colleges and universities, and local and national private organizations, and are awarded based on a variety of factors such as:

  • Financial need
  • Academic merit
  • Artistic, musical, or athletic talent
  • Interest in a particular field of study

The college financial aid office will determine your eligibility for grants and scholarships from the school and from federal and state governments. To find out about local scholarships that may be available to you, check with your school counselor, employers, civic groups, public libraries, and community organizations. And beware of scholarship scams that attempt to charge you a fee for scholarship assistance, which is usually free.

Here are common types of aid in the grants and scholarships category:

Federal Pell Grant

A Federal Pell Grant is given to undergraduate students with high financial need (

Federal Supplemental Educational Opportunity Grant (FSEOG)

The Federal Supplemental Educational Opportunity Grant (FSEOG) is given to undergraduate students with exceptional financial need (

Teacher Education Assistance for College and Higher Education (TEACH) Grant

The Teacher Education Assistance for College and Higher Education (TEACH) Grant is a federal grant that provides up to $4,000 per year to students who agree to teach for four years at an elementary school, secondary school, or educational service agency that serves students from low-income families and to meet other requirements. If the service obligation is not met, the grant is converted to a Direct Unsubsidized Loan (

Massachusetts John and Abigail Adams Scholarship

The Massachusetts John and Abigail Adams Scholarship provides a tuition waiver for up to eight semesters of undergraduate education at a Massachusetts state college or university. The scholarship covers tuition only; fees and food and housing are not included. The tuition waiver at University of Massachusetts campuses only covers a portion of tuition – check with each campus for exact amounts. The scholarship must be used within six years of a student's high school graduation (

College and University Grants and Scholarships

College and university grants and scholarships are types of financial aid provided directly by colleges and universities.

Private Scholarships

Private scholarships are a form of financial assistance derived from private sources — including corporations, non-profits, associations, and agencies — to help offset college costs. Scholarships are typically classified as merit-based aid, awarded for excellence in academics, the arts, or athletics.

Applying for College Scholarships
In this recorded webinar, you'll learn key scholarship facts, how to use online search engines to find scholarships, and plenty of helpful tips to use in your search.

Federal Work-Study

Federal work-study allows students to work part time on or near campus while in college. Students are paid work-study funds throughout the academic year for the hours that they work, and they can use the earnings for living expenses, books and supplies, and other indirect education expenses. Work-study earnings are taxable, but they are excluded from the student's total income within the financial aid calculation.

What is Federal Work-Study
Learn what federal work study is, how students quality for the program, and what to do if you receive it as part of your financial aid.

Federal Loans

Student loans are sums of money that help students pay their college expenses and must be repaid. There are a few different student loans provided by the U.S. federal and Massachusetts governments.

Federal Direct Student Loan

Every eligible student who submits a FAFSA® is qualified to receive a Federal Direct Student Loan. You should borrow a Federal Direct Student Loan before you borrow any other loan because these loans offer fixed interest rates and several repayment options. This loan does not require a credit check and the student is the sole borrower. The current maximum Federal Direct Student Loan amounts are as follows for undergraduate students. Graduate student limits are larger and can be found here.

  • $5,500 for freshman year
  • $6,500 for sophomore year
  • $7,500 for junior year
  • $7,500 for senior year

The interest rate on the Federal Direct Loan is fixed for the life of the loan, though each academic year's new loans have a new interest rate determined by the 10-year Treasury note rate and an additional percentage. The loan is always unsubsidized for graduate students, but can be either subsidized or unsubsidized for undergraduate students:

  • SubsidizedNeed-based aid, for which the federal government pays the interest while the student is in school.
  • UnsubsidizedNot need-based, and available to anyone who files the FAFSA. The student may choose to pay the interest while enrolled or defer the interest and add it to the principal amount of the loan upon leaving school.

Massachusetts No Interest Loan (NIL)

The Commonwealth of Massachusetts offers the Massachusetts No Interest Loan (NIL), a loan with zero interest and created to help needy Massachusetts residents attending post-secondary educational institutions in Massachusetts pay for educational costs.

Federal Direct Graduate PLUS Loan

The Federal Direct Graduate PLUS Loan is a federal loan available to graduate students. You must submit an application and undergo a credit check to apply for a Graduate PLUS Loan. Like the interest rate on the Federal Direct Student Loan, the Graduate PLUS Loan interest rate is fixed for the life of the loan, though each academic year's new loans have a new interest rate determined by the 10-year Treasury note rate and an additional percentage. The loan is unsubsidized. You may borrow up to the school's full cost of attendance minus any additional aid received.

Frequently Asked Questions

What are the different types of financial aid programs?

Each year, hundreds of billions of dollars in financial aid are awarded to undergraduate students in the form of grants and scholarships, work-study, and loans. Financial aid is provided by the federal government, the state government, and colleges and universities. Find out the details of the different types of financial aid, and learn the resources available to you and your family if you're a Veteran or serving in the military.

Am I eligible for financial aid?

You must meet certain criteria to receive financial aid, so first learn about financial aid eligibility.

How do I apply for financial aid?

At MEFA, we encourage you to apply for all types of financial aid, from all sources, so that you are considered for as much financial aid as possible. Visit our Financial Aid Applications page to learn about applying for financial aid for college.

What kinds of financial aid are awarded?

Financial aid may be based on financial need or merit, or a combination of the two.

Need-Based Financial Aid

Most federal, state, and college financial aid is based on a student's financial need. Recipients may receive financial aid to cover some or all of their college costs beyond what they can afford. In addition, need-based aid:

  • Requires the student to file the FAFSA and possibly other financial aid applications
  • Is determined by a standardized formula that colleges use to calculate how much each family can afford to contribute
  • Requires the student to fill out an application each year
  • May be awarded in the form of grants, work-study, and loans

Merit-Based Financial Aid

Merit-based financial aid is generally awarded by a college in recognition of a student's achievement — academic, athletic, artistic, or extracurricular — in the form of a scholarship. Not all colleges award merit-based financial aid, and those that do only select its most competitive applicants as recipients. When awarding merit-based financial aid, each college:

  • Establishes its own qualifications, award amounts, and application process (note that this is often a separate application from the financial aid application)
  • May stipulate that a merit scholarship is non-renewable
  • Typically compares students' scholarship applications to determine recipients
What happens after I apply for financial aid?

Colleges and universities take many factors into consideration when awarding financial aid for college students. Visit our After You Apply page to learn about your Expected Family Contribution and how colleges use it to award financial aid.

What else can I do to offset college costs?

In addition to applying for financial aid for college, be sure to apply for private scholarships, which can also help offset college costs.  And make sure to read our tips on how to maximize your financial aid. 

What will be my actual cost of higher education?

After financial aid is applied toward the school's cost, you are responsible for the remaining balance (also called the "net price"). Because of varying financial aid policies, it can be difficult to predict which college will be the most affordable for your family. Therefore, we encourage you to use the Net Price Calculators found on college web sites, and consider applying to at least one college that is affordable regardless of financial aid.

What should I learn about each college or career school's financial aid process?

Financial aid programs vary from college to college. To help identify a college that your family can afford, it's important that you learn how each school on your list makes its decisions when awarding financial aid to students. These questions can help guide your research.

  1. What is the total cost of attendance?
  2. What financial aid applications are required and when are they due?
  3. What are the college's application requirements for divorced or separated parents?
  4. What is the college's policy on need-based financial aid?
  5. Does the college offer merit-based scholarships? How do students apply?
  6. Assuming that cost and family responsibility remain constant, how will grant and loan amounts change from year to year? What if the family's situation changes?
  7. Are scholarships/grants renewable each year? If so, are there conditions such as grade point average, enrollment status, or major?
  8. Are students required to apply for financial aid even if they receive a scholarship?
  9. How do outside scholarships affect the financial aid package the school offers?
Where can I get help with my financial aid questions?

Here at MEFA, we're always available to help you with any of your financial aid questions. You can reach us by phone at (800) 449-MEFA (6332) or by email at You can also communicate with us via Twitter or Facebook.

You can receive free in-person help with the FAFSA at FAFSA Day, a community event held across the Commonwealth. Learn more about FAFSA Day here and then visit the FAFSA Day website for more details.

For additional in-person financial aid assistance, you can visit a Massachusetts Educational Opportunity Center, where you can receive help with all aspects of college planning.

What types of financial aid scams should I be wary of?

Here are some common types of financial aid scams to watch out for:

  1. FAFSA scams: The scammer promises to expand your eligibility for financial aid and take care of all the paperwork, on the condition you pay a "processing fee" and provide your FAFSA ID. At best, you'll be sacrificing your own funds for this so-called "processing fee." At worst, your personal information could be compromised and manipulated to the scammer's own ends.
  2. Scholarship scam: The scammer promises or guarantees you a scholarship or grant for an upfront cost, which they then pocket while giving you nothing legitimate in return.
  3. Suspicious seminars: The scammer offers a financial aid or scholarship seminar that uses pressure tactics (e.g. "pay now or miss this once-in-a-lifetime opportunity") or is evasive in providing information about themselves, their offerings, or their policies. Always investigate an organization thoroughly before committing money.
Comparing College Loan Options
This recorded webinar will help you differentiate among college loan options and better understand the true cost of borrowing.

Save for college early

Learn more about financial aid

Want a full overview of the financial aid application process? Watch our Financial Aid 101 webinar. You'll learn about financial aid applications and types of financial aid, the factors that determine your aid eligibility, how colleges determine the amount of aid to offer, and the details of financial aid offers.

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