What Are The Different Types Of Financial Aids?

Financial aid is an excellent source of financial support for pursuing higher education, especially when planning to study abroad. Studying abroad comes with a substantial financial burden, from expensive international fees to travelling and living expenses. It can be a mind-draining experience. Fortunately, multiple sources like scholarships, grants, and student loans make college more accessible for international students. 
Financial aid is not a foreign concept; however, to fresh college students and many parents, it is a new thing requiring complete information. In this article, we’ll give you a low-down on the seven types of financial aid and also explain the steps to apply for aid.

What is Financial Aid?

Attending college in a foreign country is a wise investment in one's future, but it typically comes at a high cost. The higher cost of living, travelling expenses, stationery, and tuition fees are why you should consider financial aid. It provides peace of mind since students and parents don't have to worry about monthly expenses. There are a variety of aid solutions that are less likely to make you stressed in your educational journey.
Paired with a student bank account, financial aid options can minimise your financial burden and help you focus on your academic and career aspirations. Always remember that the key is to prepare, conduct comprehensive research, and choose the finest financial aid choices for your particular circumstance.
Now, let us discuss the types of financial aid for college available for students planning to study abroad.

Types of Financial Aid for College

There are various types of financial aid available for students, they can choose between scholarships, fellowships, grants and many more. Let’s take a look at the various types of Financial aid for College students. 

1. Scholarships

Scholarships are a type of financial aid provided to students by governments and private institutions. They are typically given to students for further studies related to undergrad or postgrad courses. They are also given based on academic merit, diversity and inclusion, athletic ability, and financial need. Scholarships typically demonstrate an organisation's good values. They are highly dependent on their academic histories or other activities, such as their achievements in sports or any notable extracurricular activities that will help the student's career. Financial aid and scholarships go hand in hand, but they are different from each other.

There are many types of scholarships available, and they are also divided into categories by which a student can choose and select one according to their needs:- 

1. Merit-based scholarships

A merit-based scholarship is awarded to students who have high performance academically. They are gifted students who have excellent academic records. These awards are usually given to students who maintain their GPA while they are excelling in their classes. 

2. Need-based scholarships

Need-based scholarships are awarded to students from low-income backgrounds, and their qualification is determined based on their family income. Applicants for need-based scholarships must pass a background check to fit into their criteria and qualify for the scholarship. 

3. Identity-based scholarships

Identity-based scholarships are scholarships awarded to people coming from marginalised backgrounds, the LGBTQ+ community, and People from ethnic or racial minorities. These scholarships help people from these categories get their communities to come forward. 

4. Government-based scholarships

Government-based scholarships are scholarships given by the government of the country the student belongs to. They are based on academic achievements, social work or even on need-based criteria. 

5. Athletic-Based Scholarships

Athletic scholarships are awarded to students who show extraordinary performance in sports and play on the national and international levels. They are highly popular in the USA and Canada but are nearly non-existent in the rest of the world. These scholarships give a chance to students who have given their full attention to sports and let them do further studies in good colleges and universities to let them compete on a higher level. 

6. Activity-Based Scholarships

Activity-based scholarships are scholarships awarded to students who show extraordinary skills in activities like filmmaking, social services, charity and many more like these. These scholarships give students a chance to showcase their talents and skills on a bigger scale and even offer them from multinational companies and organisations. 

7. Military-Based Scholarships

 Military-based scholarships provide financial aid and scholarships for students, veterans, and soldiers already serving in the army. These scholarships help them advance their careers or help them get enlisted in the army. 

8. Employer Sponsered Tuition Assistance

Employer-sponsored tuition assistance funds the company provides to help their employees while doing a certain course of study or a basic course online. The employee usually gives the funds and later is reimbursed by the company by their respective policy. 

2. Fellowships 

Fellowships usually come under merit-based scholarships but are regularly categorised as financial aid. They are awards presented to students and professionals to continue their studies in an advanced study in their subject. Graduate and postgraduate students compete in order to get a fellowship, and they show utmost dedication towards their academic goals in order to get a fellowship. Getting a fellowship is harder than getting a regular merit-based scholarship. 

There are three types of fellowships and different fields categorise them:-

1. Graduate Fellowships 

Graduate fellowships are awarded to students who have started their graduation. These fellowships usually pay for their tuition fees, accommodation, airplane tickets, academic resources and health insurance. These allow students to focus on their academics rather than worrying about their funds and help them perform better. 

2. Medical Fellowships 

These fellowships are specially for physicians who have completed medical school and residency in their speciality. These fellowships help doctors learn more about their preferred sub-speciality. For example, if a resident doctor who has completed ophthalmology and wants to continue their research and practice ophthalmology in children can apply for these fellowships. 

3. Postdoctoral fellowships

These fellowships are specially designed for people who have completed their doctorates and need additional time to research and study. These fellowships help them continue their studies and give them a chance to teach and research simultaneously. 

3. Grants 

Grants are similar to scholarships. The federal government, the state, and universities award them. Grants are always need-based and highly competitive. Applicants must complete the forms and procedures as soon as the deadlines approach. By applying for grants, students can avoid student loans and save money while focusing on academics. 

As every financial aid grant has its type, they are:- 

1. Federal Grant 

The most popular type of grant is the federal grant. The federal government sponsors it. One of the most popular types of federal grants is the Pell Grant. The Pell Grant can offer you a maximum amount of $5775 and does require a family's income below $50,000 however, families with income less than $20,000 are usually awarded with the Pell Grant. 

2. State-Sponsered Grants 

State-sponsored grants are highly popular and are offered to minority families or interests in high-demand fields. For example, if a particular state has an issue with orphan children, then the state tackles this issue by giving those children state-sponsored grants to help them study and get them back on track. Most state-sponsored grants require the student to study in the same state, but you can definitely look for options. 

3. College-Based Grants

College-based grants are offered to low-income students. Students need to fill out a form to show their financial needs. They can also be awarded based on merit, the field of study, or student-specific criteria. Athletic grants are offered to students with high athletic performance. However, they require a minimum GPA and an excellent athletic record. 

4. Loans 

Educational Loans are loans taken up by the students who need financial aid. Educational loans are one of the easiest financial aids to get as one needs to repay them with a certain amount of interest. Education loans are based on two criteria. They are based on location and course. You can also apply for federal loans, which will help you get loans from the federal government at low interest rates. Always consult your financial aid counsellor before you take any loans and spot any loan scams. It is always advised to try for federal loans as they have low interest rates, and you can save yourself from loan scams.  

1. Federal Student Loans

Federal student loans, unlike scholarships and grants, do demand repayment, although they often have lower interest rates and better conditions than private loans. It is one of the best types of financial aid for college available for international students since it offers the flexibility to pay back in instalments. These are provided mainly by government banks with lower interest rates, so once you finish your studies, you can quickly repay without further financial hassle. Repayment usually begins once the student graduates or leaves school.

2. Private or Alternative Loans

Some students turn to private or alternative loans when federal student loans and other types of financial aid for college don't fully defray the cost of their education. Banks, credit unions, and other private lenders offer these loans. It’s essential to be prudent when contemplating alternative loans because they frequently have higher interest rates and less flexible payback terms than federal loans.
Each of these seven types of financial aid for college has the potential to help students accomplish their academic objectives. However, it is crucial to realise that financial assistance is not a one-size-fits-all answer. Income, academic achievement, and the institution or university a student expects to attend can all influence eligibility and availability.

5. Work-Study Programs

Work-Study is a federally supported program that gives part-time jobs to financially needy undergraduate and graduate students. Work-study programs are one the most rewarding types of financial aid for college since they allow learning to earn money, and you get to repay your student loan altogether. These occupations can be on or off campus and are frequently related to the student's major. Work-study money helps to refund the loan amount and, at the same time, offers you helpful work experience.

6. Tuition Payment Plans

Some colleges and universities offer tuition payment plans that let students, and their families spread out the cost of tuition and other expenses over the academic year. Although these programs don't offer conventional financial aid, they can assist families in creating a budget for college costs and avoiding the need for expensive loans. Tuition Payment Plans are types of financial aid for college where students can quickly pay their fees in instalments. 

7. Student Allowances 

Student allowances are weekly payments that can help a student go through his week, excluding tuition fees. They are divided into three parts, where students under 24 are given around $300 per week. Single parents with a child are given anything between $300-$400, and parents with one child are given anything up to $500 weekly. This helps them buy groceries and their basic expenses. An individual does not have to pay back their student allowances. 

To Maximize Financial Aid Opportunities:

A student can maximise their financial aid opportunities by tying various methods, let’s take a look at the various financial aid opportunities available which a college student can maximise. 

1. Create a Budget

You can choose the types of financial aid for college, and a carefully planned budget that details your educational expenses will keep your finances in control. You don't have to worry about more enormous obstacles like tuition fees in your academic journey. Consider everything: tuition, textbooks, housing, and daily living expenditures.

2. Complete the Free Application for Federal Student Aid (FAFSA)

Students should fill out the FAFSA wholly and honestly since it is used to determine the eligibility requirements. Many institutions and states also use the FAFSA to identify who is eligible for institutional and state help. The FAFSA must be submitted accurately and by the deadlines listed.

3. Search for Scholarships

The finance aid market is full of opportunities which will help students pursue their dream education in a very flush manner. You can find many portals, educational counsellors and organisations that can help you quickly find and get the perfect scholarships for college that you can avail of. These opportunities have a massive impact on your educational background, and to make it more evident, you have to put a reasonable amount of time and effort into researching for the right opportunity. 

4. Explore Institutional Aid

Many international universities and colleges offer international scholarships and grants to needy students. If you fulfil the requirements, the possibility of completing your higher education at a low price is indeed possible. Students should investigate the financial aid possibilities available at the institutions they are considering and seek advice from the financial assistance office.

5. Borrow Responsibly

When considering student loans, it is critical to borrow only what is necessary and to understand the loan terms. Also, It is more accessible for parents to ensure that the EMIs are paid on time. The more you borrow, the more difficult it becomes to pay back, so borrow responsibly to ensure you pay back with no future stress.

Higher education is a colossal investment, and financial aid is the solution to make education more flexible, especially in a foreign country. Students may alleviate their financial burden and prioritise their academic and career goals by proactively researching and applying for financial help. Always remember that the key is to prepare ahead of time, conduct comprehensive research, and choose the finest financial aid for your particular need.