Finance your college education with 3 forms of aid.

There are three basic forms of financial aid:

  1. loans
  2. gift aid (such as grants and scholarships)
  3. work-study

US students can rely on just one of these forms of financial aid to fund college, although many use two or even all three. International students have even fewer options. Here’s a look at a few forms of financial aid to help you determine what it is you might be eligible for.

Student Loans

Student loans are forms of financial aid that must be paid back with interest. These loans can come from the federal government, the state government, private lenders (such as a bank) or even the school you plan to attend. Keep in mind that most international students aren’t eligible for US federal student loans.

Student Loans: Pros

  • They have low interest rates.
  • Some loans, such as subsidized Stafford Loans, are awarded on the basis of need. If you are eligible and submit a FAFSA, you are almost guaranteed assistance.
  • If you are eligible for subsidized Stafford Loans, the government pays interest on them while you are in school.
  • As long as you’re up to date with your payments, student loans are a great way to build your credit.

Student Loans: Cons

  • Loans must be repaid.
  • You must pay interest, something not necessary with grants and scholarships.
  • Defaulting on a student loan can have serious consequences. The term “defaulting” means failing to meet the terms and conditions of a loan (such as having overdue payments). Defaulting can result in 7 or more years of a damaged credit rating, loss of a generous payment schedule and deferment options, and lowered wages by the federal government in order to repay the loan.

College Scholarships and Grants

Scholarships are forms of financial aid that do not need to be repaid. You can get a scholarship based on a wide range of criteria, such as academic, athletic or creative ability. They are also awarded for personal essays and to students pursuing particular fields of study, students who are part of underrepresented groups and students who live in a particular area or region. Some scholarships are awarded because of financial need. Scholarships come from many sources, including schools, charities and private businesses. University Language Services even awards its own scholarship! Grants, like scholarships, are forms of gift aid that do not need to be repaid.

The Difference Between Grants and Scholarships

Grants can generally be used for various college expenses, but most scholarships can be used only for annual tuition or student housing costs. Also, grants generally come from government offices or non-profit organizations, while scholarships come from a variety of sources. Each grant and scholarship must be applied for individually.

Scholarships and Grants: Pros

  • They do not need to be repaid.
  • They accrue no interest.
  • There is no limit to how many scholarships and grants a student can receive.

Scholarships and Grants: Cons

  • Scholarships and grants tend to be very competitive. The more money awarded for a particular scholarship, the more difficult it is to win.
  • Gift aid rarely covers the entire cost of a college education.
  • Applying for scholarships takes time. Each grant or scholarship has a separate application.

Other Forms of Financial Aid

  • Federal Work-Study (FWS) – Work-study allows students to supplement tuition payments with money earned from a part-time on-campus job. The federal government pays part of the student’s wages. It then becomes cheaper for a college department or business to hire a FWS student. As a result, it is often easier for work-study students to find part-time campus employment. FWS eligibility is based on need.
  • Military aid – Students planning to work in the armed forces are eligible to receive government financial aid. Military aid is sometimes available for veterans and their dependents.
  • Tuition payment plans – Some services allow you to split the cost of yearly tuition into a short-term, 12-month payment plan. While this is interest-free, beware: 1) Some tuition plans have fees or finance charges. 2) Making payments directly to a post-secondary institution is tax deductible, but paying via a service is not.

Finding the Aid You Need

Attending a US college or university can be expensive. Not all international students are eligible for all types of financial aid, especially aid from the federal government.

Contact the schools you are applying to, research what types of financial aid you can receive and regularly search for scholarship competitions open to international students. If you do this, your US college education expenses are more likely to decrease.