Loans, Grants, & Scholarships: A Student’s Guide

Heading off to college next year? We’re so happy for you! If you’re nervous about covering the cost of college, we recommend sitting down and having an upfront conversation about it with your parents or guardians. They may be helping you out where they can, you may be chipping in a bit yourself, but what kind of financial assistance will you need to make it work? And if you don’t have someone at home to help out, your school guidance counselor and local financial institutions have a ton of resources to help you along. Read on to learn about loans, grants and scholarships.

Student Loans

In many cases, student loans are necessary when it comes to paying for college, and you’ll have to repay this money after you graduate. So, the cost of the college you choose will likely be a major factor in your decision-making, as the more it costs, the more you’ll probably need to pay back. One type of loan is a Federal Direct Loan, which you can get by filling out the FAFSA (Free Application for Federal Student Aid) with your parents. Federal Direct Loans can be either  subsidized or unsubsidized. Subsidized loans don’t charge interest while you’re in college, while unsubsidized ones accrue interest while you’re still in school. Students qualify for subsidized loans based on their financial need as demonstrated by the FAFSA.

If after grants, scholarships and Federal Direct Loans there is still a gap in paying for school, there are more loan options you can consider. Make sure you do your research on the type of loan that works best for you. You might pursue a private loan, which has certain pros and cons and will usually need a cosigner like a parent or guardian. 

Loans taken out by parents or guardians

There are numerous loan options for your parents or guardians depending on their ability and desire to help. These would be taken out in their names, and they may ask you to repay a portion or all of the loan to them someday. See this article on loans for which parents and guardians can apply.


Grants give students free money that doesn’t need to be repaid after college under most circumstances. These are usually based on your financial need as demonstrated by your FAFSA, or on merit. The federal government, state government and private colleges all have grant money that they can award based on your calculated financial need. You may have heard of Pell Grants, which come from the federal government and are awarded based on high need. 

Private colleges sometimes require more application forms, like the CSS profile, in order to award school-specific institutional grant money. Make sure you check their website and complete all the application requirements. They’ll also communicate with you via email often, so make sure you keep an eye on your inbox.


Scholarships are more free money for college, typically awarded based on merit or a combination of need and merit, athletics, extracurricular involvement, cultural identity and more. Some colleges consider all students for scholarships as part of the admissions process while others require a separate application. Make sure you research this and take any necessary additional steps when applying.

Lots of other organizations offer scholarships to college students, like banks or credit unions, corporations and community groups. Check out resources like Fastweb to find and apply to outside scholarships that are a good fit for you. Your school guidance counselor probably also will be able to find you appropriate scholarships, and help you weigh your chances of landing them.

No matter how you choose to pay for college expenses like tuition, room and board, and books, keep in mind that you’ll also likely need some spending money and a way to pay any extra bills you have. You might even be getting money from a work study job as part of your financial aid package. Before you head off to college, it’s a good idea to have a checking account with a debit card for easy access to your money.