Introduction

According to the College Board, more than $130 billion in financial aid was awarded to students in 2006-2007, including federal and non-federal loans, federal, state and institutional grants.

Financial aid refers to any grant, scholarship, loan or work-study that is awarded to a student from the federal government, state government, college/university or private source. Financial aid is available in three forms: grants and scholarships, which do not have to be repaid; student and parent loans, which have to be repaid; and work-study, which provides an hour’s pay for an hour’s work.

Three major sources provide the bulk of student financial aid: the federal government, state governments, colleges, and universities. The federal government is the largest single provider, offering more than 70 percent of all financial aid available, mostly through loans.

Generally, there are two types of student aid, need-based aid and merit-based aid. Need-based aid is determined by measuring a family’s ability to pay. Merit-based aid is awarded to students based solely on academic achievement.

You may learn more about financial aid by visiting our interactive video tutorial or by clicking on the links to the left. The online tutorial only takes 15-20 minutes to complete and is free to use.