Scholarships, Student Loans, and Grants: The Things You Need to Know

Scholarships, Student Loans, and Grants: The Things You Need to Know

As a parent, one of the best things you can do for your children is prepare for the expense of their college education as early as possible. It’s no secret that college costs have gone up over the past few years, just as there is no reason to believe they will be going down.

With that in mind, it’s in your best interest to begin saving as soon as possible to take advantage of lower regular contributions to qualified plans.

When many kids reach the age where they are ready for college, they will find that the money for their education simply isn’t there. When that happens, they will have to look toward sources like scholarships, loans, and grants in order to cover the costs.

In this post, we will explore the various ways you can get money for your kids’ college education.


Scholarships are a bit like a gift given by a school, business, or foundation as recognition for an academic or athletic achievement, but they can also be given based on financial need. Because of that, they never need to be repaid.

While this is one of the best ways to help cover college costs, you should be aware of the fact that, in some cases, a substantial scholarship reward may negatively affect how much you receive from other means of assistance. To learn more about them, visit and do a search for ‘scholarships’.

Federal Grants

Federal grants, like scholarships, do not need to be paid back, and can be used toward your education. In many cases, college students receive Pell grants, which are given by the federal government and are needs-based. These grants are available to both full-time and part-time students.

Supplemental Educational Opportunity Grants

Whether or not you can receive these grants depends on the school, as they are given to the school by the government, and the school then decides who they should be awarded to. You will have to check with your school’s financial aid office to see if these grants are something you are eligible to receive.

Perkins Loans

This is one of the first options for students who do not receive grants. Perkins loans are federally funded loans, and because they are loans, they are easier to get than grants.

Like many grants, they are still needs-based, but they have an interest rate of 5%, which begins to accrue after graduation rather than during the course of the student’s studies.

Generally speaking, the repayment period after school is 10 years, but you may be able to negotiate that, depending on your situation.

Stafford Loans

These are common, private loans that come in both subsidized and unsubsidized options. Subsidized loans are preferable because that means not having to worry about the interest while you are still in school.

Like previous options that we’ve discussed, these loans are needs- based and you can get up to $5500 per year. Graduate students can be awarded more with these types of loans than undergrads.

These loans also have variable interest rates, and they are generally lower than what a Perkins loan offers, but students often consolidate after graduation, and receive an average interest rate for the combined loans.

After graduation, there is a six-month grace period before the student has to begin paying the loan back, giving them time to find work. Like Perkins loans, the repayment term is generally 10 years.

Parent Loans to Undergraduate Students (PLUS)

With this type of loan, the parents take on the responsibility of paying back the loan and are able to borrow an unlimited amount of money at a slightly higher interest rate.

Like Stafford loans, these are private and the terms of repayment, as well as interest rates and fees, are determined by the company providing them and should be investigated before you sign anything.

For more information about ways to pay for school, visit this website. As always, I am here to help if you have any questions about ways to pay for college, so don’t hesitate to get in touch with me.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.

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