Sign up for your free account    Sign Up Now
From the Experts at

What Are the Types of Student Loan Programs & Their Differences?

Advertiser Disclosure

What Are the Types of Student Loan Programs & Their Differences?

Three Primary Sources of Financial Aid for Students

  • Loans: Must be repaid (usually in monthly installments over the course of 10-20 years) beginning when the student graduates or when the grace period ends (typically 6 months after graduation).
  • Grants: Gift money that does not need to be repaid. Grants are often provided by non-profit organizations and are usually tax-exempt. Students usually must give or submit a report regarding the project for which the grant money was issued.
  • Scholarships: Awarded based on financial need or on merit, scholarships are also monetary awards that do not need to be repaid. Non-profit and for-profit institutions can provide them. Usually the student must maintain a certain level of academic performance to receive or continue receiving the scholarship money. Scholarships are not usually tax-exempt.

A fourth type of aid comes in the form of work-study, part of campus-based financial aid. If a student has work-study, the student works part-time on campus to help fund college expenses.

Primary Avenues Students Should Explore When Applying for Financial Aid

  • Federal aid: The FAFSA form must be filled out annually for the student to be eligible for subsidized and unsubsidized Stafford Loans; PLUS loans; as well as need-based federal grants: Pell, Academic Competitiveness, TEACH, and SMART.
  • State government grants and loans.
  • Campus-based financial aid: Scholarships, Federal Work-Study, and grants including the Federal Perkins Loan and the Federal Supplemental Educational Opportunity Grant (FSEOG). Most states and schools use the FAFSA to determine eligibility for other non-federal aid.
  • Scholarships: Campus-based scholarships (often found on the college/university’s website), local scholarships, national scholarships.
  • Private agencies: This can include a number of companies, foundations, and employers (either the parents’ or the student’s employer)

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Sign up for your free account. Learn More
  • Stay Connected to Our Experts

    Please submit your email address to get credit & money tips & advice
    from our team of 50+ experts, delivered weekly to your inbox.

Check Your Credit For FREE

Free Credit ScoreGet a FREE personalized credit check-up today.

Get Started – It’s Free!  

Certain credit cards and other financial products mentioned in this and other articles on News & Advice may also be offered through product pages, and will be compensated if our users apply for and ultimately sign up for any of these cards or products. However, this relationship does not result in any preferential editorial treatment.