Financial assistance for both private and public higher education comes in two primary forms: Grant programs and loan programs. About the book: https://www.amazon.com/gp/product/0226510921/ref=as_li_tl?ie=UTF8&camp=1789&creative=9325&creativeASIN=0226510921&linkCode=as2&tag=tra0c7-20&linkId=130e0f0b283f0e7d6542d3e6b4eaab72 Grant programs consist of money the student receives to pay for higher education that does not need to be paid back, while loan programs consist of money the student receives to pay for higher education that must be paid back. Public higher education institutions (which are partially funded through state government appropriation) and private higher education institutions (which are funded exclusively through tuition and private donations) offer both grant and loan financial assistance programs. Grants to attend public schools are distributed through federal and state governments, as well as through the schools themselves; grants to attend private schools are distributed through the school itself (independent organizations, such as charities or corporations also offer grants that can be applied to both public and private higher education institutions). Loans can be obtained publicly through government sponsored loan programs or privately through independent lending institutions. Grant programs, as well as work study programs, can be divided into two primary categories: Need-based financial awards and merit-based financial awards. Most state governments provide need-based scholarship programs, a few also offering merit-based aid. Several need-based grants are provided through the Federal Government based on information provided on a student's Free Application for Federal Student Aid. The Federal Pell Grant is a need-based grant available from the Federal government. The federal government also has two other grants that are a combination of need-based and merit-based: the Academic Competitiveness Grant, and the National SMART Grant. In order to receive one of these grants a student must be eligible for the Pell Grant, meet specific academic requirements, and be a US citizen. A student's eligibility for work study programs is also determined by information collected on the student's FAFSA. Need-based financial awards are money or work study jobs provided to students who do not have the financial resources by themselves to pay for higher education. The intent of need-based financial aid is to close the gap between the required cost to pay for the higher education and the money that is available to pay for the education. Merit-based financial awards are money given to a student based on a particular gift, talent, conditional situation, or ability that is worthy of the monetary award, regardless of economic standing. The intent of merit-based financial aid is to encourage and reward students who exhibit these qualities with attendance at a school of higher education through the financial incentive. Not only does merit-based assistance benefit the student, but the benefit is seen as reciprocal for the educational institution itself, as students who exhibit exceptional qualities are able to enhance the development of the school itself. Financial aid has also been found to be linked to increased enrollment. A study conducted by the National Bureau of Economic Research found that an increased availability of any amount financial aid amounts to increased enrollment rates. Evidence also suggests that access to financial aids also increases both "persistence and competition". Further benefit has been noted with academic based scholarships, augmenting the effects of financial aid by incentivizing the scholarship with performance-based requirements. In 2012 student loan debt owed in the United States totaled over $1 trillion. In 2012, total student loans exceeded consumer credit card debt. There are many different types of loans that can be taken out by a student or the student's parents in order to pay for higher education. In general these can be divided into two categories: Federal Student Loans and Private Student Loans. There are five kinds of student loans available through the government: Perkins Loans, subsidized Stafford Loans, unsubsidized Stafford Loans, direct loans, and PLUS loans. A student's eligibility for any of these loans, as well as the amount of the loan itself is determined by information on the student's FAFSA. The interest rate and whether or not interest accrues on the loan while the student is in school depends of the type of Federal loan. Students can also acquire loans privately, through banks, credit unions, savings and loan associations, or other finance companies (ref. article pg. 3). Private loans are typically used to supplement federal student loans, which have a yearly borrowing limit. However, private loans typically have more rigid repayment policies. http://en.wikipedia.org/wiki/Higher_education_in_the_United_States

• published: 17 Jun 2014
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