Types of Federal Aid Video Transcript

Title: Types of Federal Student Aid

Duration: 2:14

If you need help paying for college or career school, the office of Federal Student Aid might be your best option.

We offer more than $150 billion to students each year in the form of grants, loans, and work-study funds. And federal student aid can be used to pay for school expenses such as tuition, room and board, and books and supplies.

After you've filled out the Free Application for Federal Student Aid or FAFSA, you'll receive an award letter from each school you list on your FAFSA. This letter explains both the federal and non-federal financial aid options that a school is offering you.

So let's talk about federal aid. If you qualify for and receive a federal grant, you won't have to repay the money. That will definitely help offset the cost of school, but you may still need additional help.

If so, a federal student loan might be your answer. Remember, a student loan is just like any other loan; it's borrowed money that will have to be repaid with interest.

If you plan to take out a loan, consider federal student loans first. Compared to private student loans, federal student loans often have lower fixed interest rates and offer many benefits that you won't find otherwise.

For example, when it's time for you to repay your federal student loan, your loan servicer can work with you to find the best repayment plan for your individual needs. Plus, you may be able to adjust your loan payments based on your income. You also may be able to defer your federal loan payments, deduct student loan interest on your taxes, and even consolidate your eligible federal student loans into one loan with one monthly payment.

Federal loans can even be forgiven based on certain types of employment. Getting a work-study job is another great option to help pay for school. Eligible undergraduate and graduate students will be able to earn at least minimum wage.

If you have questions or need any assistance, you can contact the financial aid office at your college or career school or visit studentaid.gov for more information.