At National University, we strive to make higher education accessible to all adult learners. This informative guide is designed to educate you about your financial aid options, so you can find the resources you need to pay for college and achieve your goals.
College costs have climbed steadily over the years, with reports saying tuition has risen as much as 80 percent since 2000.1 College loan debt has grown too, surpassing car loans and credit cards as the largest source of personal debt. Along with higher costs, many public colleges and universities are spending less per student today than they have in many years because of decreased education funding by other sources. Even severe cuts to per-pupil spending are not enough to make up for the drop in school funding, so tuitions have skyrocketed.
College enrollment has declined correspondingly, but not because people do not want to go to college. The fact is that many families simply cannot afford the increased cost.
In 2017, Americans owed over 1.3 trillion in student loan debt, and 1 in 5 adults ages 30-44 were paying off student loans.
Most college students pay for their education with grants, scholarships, loans, or a combination of the three. The purpose of financial aid is to bridge the gap between educational cost and a student’s resources.
Here is a quick overview of the differences between grants, scholarships, and loans. The following details will give you a deep-dive into each financial aid option.
| Grants | Grants are essentially free money awarded to students based on financial need. Typically, grants come from the government, your college, or a nonprofit organization. Here’s the best part: you don’t have to pay them back. | Cost to you: Free |
|---|---|---|
| Scholarships | Scholarships are usually awarded based on merit or other specific requirements, including minority status, athletic ability, or academic achievements. Scholarships, like grants do not need to be repaid. | Cost to you: Free |
| Loans | Loans differ from grants and scholarships in that they must be paid back. Some loans may be subsidized by the U.S. Department of Education while others are offered unsubsidized—meaning you pay the interest. | Cost to you: That depends on the amount you borrow, when you pay it back, and the interest you accrue. |
Grants are a great way to fund your education because, unlike loans, most do not have to be paid back. Each grant is awarded on a need basis and will have unique qualifiers that must match your situation.
To learn more about federally issued government grants, including eligibility requirements, visit studentaid.gov.
Scholarships are usually awarded based on merit or other specific requirements. Sometimes those requirements may be based on minority status, athletic ability, or may even be awarded to students that win academic competitions. Scholarships, like grants, do not need to be repaid.
You can learn about scholarships in many ways, starting with contacting the admissions office at the school you plan to attend. Another good place to find scholarship information is the U.S. Department of Labor’s scholarship search tool.
Remember that you do not have to pay any agency or individual to find scholarships or other financial aid opportunities.
Loans come in all sizes and varieties and differ from grants and scholarships in that they must be paid back. Some loans may be subsidized by the U.S. Department of Education while others are offered unsubsidized.
The difference is that the U.S. Department of Education pays the interest on a Direct Subsidized Loan while you are in school, and you are responsible for paying the interest on a Direct Unsubsidized Loan.
For a full list of Federal student loans, interest rates, and criteria for eligibility, visit studentaid.gov.
You do not need to pay an agency or individual to find scholarships or financial aid for you.