Types of Financial Aid
Most college students rely on multiple sources of financial aid to pay for their education. While different types of funds can work together to form your aid package, you should take advantage of them in this order:
1. Free Money
Grants and scholarships are awarded based on financial need, accomplishments and/or abilities. They are gifts. You will not have to pay this money back.
2. Earned Money
A work-study job is a campus or community-based job that is part of your financial aid package. You will earn this money and will not have to pay it back.
3. Borrowed Money
Loans are money that you pay back with interest. Start with federal loans, which offer the best interest rates and terms. Private loans should be your last option.
If your family is saving for your college education, a state-sponsored College Savings Iowa 529 account is an excellent option. Even non-family members can set up these accounts, starting with as little as $25. The earlier you can start saving, the farther your money will go.