Peterson's FAABteachersmanual Page 2
The Basics of Financial Aid
Financial Aid: Money supplied by outside sources to help pay for the cost of
education beyond high school, commonly referred to as postsecondary
Loans: Money you borrow and are required to pay back with interest. In most
cases, the terms of loans are more generous than for commercial loans.
Payments are generally deferred until the student has finished college.
Grants and Scholarships: Money with no strings attached. Grants and
scholarships don't need to be repaid or maintained by a job. Grants are often
awarded by the government and are based on financial need alone, while
scholarships are given to students who have met some criteria, such as
academics or athletic merit, regardless of whether the student needs the money
to pay for college.
Work-Study: Money you can earn while you are enrolled in school. Students
generally work 10-15 hours per week during the academic year and full-time in
Need-based Aid: Aid in which financial need is a criterion. For some aid,
financial need is the only factor for eligibility. While for other aid, financial aid
may be one of many factors that are used to award money.
Merit-based or Nonneed-based Aid: Scholarships in which financial need is
not a criterion. Merit-based aid is based on qualities such as talents,
performance, or accomplishments.