Key takeaways:
- Scholarships, grants, and money from work-study programs are types of college financial aid that typically don’t have to be paid back.
- Apply for these awards by completing the FAFSA, using scholarship databases, visiting your colleges’ financial aid office websites, and researching your state’s programs.
- Student loans almost always need to be paid back, and you may have to pay back scholarship or grants if you failed to meet the stated requirements.
Scholarships, grants, and money from work-study programs are three examples of college financial aid that don’t need to be paid back in most situations. Applying for these through your college, the government, and outside organizations can save you thousands of dollars on your education, if not more. By comparison, student loans always need to be paid back. In this article, we dove into these financial aid sources and how you can apply for them.
Types of college financial aid that don’t have to be paid back
1. Scholarships
Scholarships, awarded by educational institutions, nonprofits, businesses, and individuals, don’t have to be paid back in most cases. Each scholarship has its own eligibility criteria, monetary amount, maintenance requirements, and submission deadline. Some are one-time awards, while others can be renewed as long as you continue to meet the criteria.
You can receive scholarships for just about any reason. You can receive them on:
- Merit: Scholarships earned with high GPA, athletic accomplishment, exceptional talent in a particular field, or community service.
- Need: Students may qualify for scholarship based on financial need.
- Likeness: There are awards for everything from hair color to religion and cultural background to sexual orientation.
Where can I apply for scholarships?
- For institutional awards, head to the school’s website. Most students will be automatically in the running for available institutional aid if they applied to the school and completed their Free Application for Federal Student Aid (FAFSA) and/or CSS Profile. However, some schools may require you to apply early by priority deadlines or early action due dates or submit separate applications and essays for more competitive awards.
- For private scholarships, trying using a scholarship database. After you input your information, it returns with awards that you qualify for. Some databases even allow you to apply right through their program. You can also find scholarships through your high school guidance office, community notice boards, and local newspapers.
To improve your chances of winning, always read over the submission details carefully, note the deadlines, and start your search early. There’s no limit to the number of scholarships you can apply to.
2. Grants
Grants are similar to scholarships but instead of being based on merit or other factors, they’re often awarded due to financial need. Others may be based on field of study, ethnicity, or military affiliation. They typically come from the federal government, state government, and educational institutions. You usually don’t have to pay grants back, and they may be renewable.
Some examples of federal grants include:
- Federal Pell Grants
- Federal Supplemental Educational Opportunity Grants (FSEOG)
- Teacher Education Assistance for College and Higher Education (TEACH) Grants
- Iraq and Afghanistan Service Grants
As with scholarships, grants have their own eligibility criteria. Most use the FAFSA or CSS Profile, but some states have their own financial aid applications. Depending on the award and source, you may have to submit additional documentation. Complete your FAFSA and CSS Profile as soon as possible to make sure you meet any institutional deadlines.
3. Work-study
The federal work-study program helps students with demonstrated financial need earn money to cover their college expenses. You’ll work on campus or with a college partner, typically for a few hours a week. You can only earn up to the award amount each semester per your financial aid award letter. Your college will determine your eligibility and award amount based on the FAFSA and the number of available spots in their program.
Examples of work-study jobs include library assistant, event staff, office assistant, computer lab tech, tutor, and IT help desk. You can apply for jobs through your school, but make sure you apply early – the best jobs fill up fast! These positions pay minimum wage, but some that require experience or skill can pay more.
Some states also have their own work-study programs.
When could you have to pay back financial aid?
Student loans for college almost always need to be paid back, and there are select situations where you may have to pay back a scholarship or grant.
If you’ve failed to meet the award requirements
Some scholarships and grants for college come with additional award requirements that you have to meet even after you’ve been selected the recipient. If you fail to meet these requirements, you could have to pay back the money immediately or the award could convert to a loan.
Select scholarships require you to attend a conference in your honor or tutor a future award recipient. If you don’t complete these tasks, your award may be revoked. Here are some examples:
For example, if you accept the Federal TEACH Grant, you agree to teach full-time in a high need field for a set number of years after graduation. If you don’t complete this, the grant converts to a loan that will need to be paid back.
Your eligibility and award amounts could also be affected by switching from full-time to part-time, your GPA, and the school you attend should you transfer. You might also lose out on an award before it’s paid out if your high school GPA dips due to senioritis.
For renewable awards that require a set GPA or enrollment status in order to renew, you won’t lose out on previously received scholarships or grants if you no longer meet the requirements. You simply won’t receive the award for the following years.
If you lied or made a mistake on the application
Always be honest on your financial aid applications. If you’re caught lying, the financial aid may be revoked. Lying on your FAFSA can result in a $20,000 find and up to 5 years in prison! Plus, you’ll lose out on any aid you received.
Even mistakes could impact the offer, so always read over your submission carefully. If you notice an error, reach out to your college’s financial aid office, the awarding organization, or the government office as soon as possible.
If you took out student loans
Student loans have to be paid back as it’s “borrowed” money. When you take out a loan, you’re agreeing to pay back the principal amount plus interest.
College students can apply for loans from two sources: the federal government or private lenders, such as banks and credit unions. Federal student loans tend to have much lower interest rates and more repayment and forgiveness options than private student loans. Some federal loans may even be forgiven or converted to grants in select situations.
Always use other financial aid sources before taking out loans. In most cases, scholarships and grants are considered gift aid. If you do need to borrow money to attend college, focus on federal student loans first. You’ll likely need a co-signer should you apply for private student loans.
To determine the best deal for your college education, compare your financial aid offer letters when they arrive with your acceptance letters. Since they don’t follow a single format and colleges have varying costs, comparing them may be like apples and oranges – but we’re here to help. Head over to our Financial Aid Offer Comparison Tool to get started.
