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Are Student Loans Financial Aid

Last Updated on August 12, 2023 by Oluwajuwon Alvina

To get all the important details you need on financial aid for students, do you have to pay back financial aid, financial aid grants and lots more All you have to do is to please keep on reading this post from college learners. Always ensure you come back for all the latest information that you need with zero stress.

There is no doubt that student loans have helped students who otherwise couldn’t afford to go to college gain access to higher education, but are these loans financial aid? Families normally don’t think about this question until they receive financial aid award letters. But it’s really important this question is pondered during the college application process because then families can decide together what can kind of aid they’ll accept for both themselves and their children.

Student loans should never be looked at as free money for education. They come with interest rates charged and really are financial transactions. Parent loans are also financial transactions. Families need to think about these loans in similar ways as they would other types of loans. Does that mean they’re bad? No. When individuals takes out a car loan, it’s because they need a car to get to and from work or school. They’re not thinking, “Great, I just got a loan for nothing.”  They’re thinking, “I borrowed money for this great car.” As long as education debt is borrowed at reasonable amounts, the answer is the same for education loans.


Should you fill out the FAFSA if you don’t want student loans?

The answer is always yes. Students could lose out on free money from scholarships and grants if the Free Application for Federal Student Aid isn’t filled out and submitted. Why? The reason is that while the title of the application implies the results are only used for federal student aid, schools the student requests receive data from the form often use the information to determine whether the student will get funding from the college itself. Not filling out the form is basically telling schools, “Please don’t give me money.”

Do families consider student loans financial aid?

This is an important question that should be answered on an individual family basis. Families may decide the student won’t attend any school where the student will have to borrow money. This means that families should research by contacting high school counselors and using net price calculators to determine schools on the students short list that are likely to give them enough free money to avoid student debt. This also means families should include schools on the student’s application list where tuition is low enough that money the family has saved will cover costs.

Are you willing to start saving for higher education now?

The good news is that there’s additional free money available from many states for higher education that families can start gathering from the birth of their child.  Families can save for higher education in 529 plans, tax-advantaged investment accounts. All 529 plans allow funds to grow federal income tax free. Many states also offer state tax deductions on contributions. In addition, several states offer free money to families via matching grants up to a certain level on contributions.  Some states also offer grants for opening an account and / or a limited number of scholarships.

Bottomline: The definition doesn’t exist where student loans are free money.  But the definition does exist where student loans can and do help families afford college. The problem happens when families don’t also think about whether the student can afford repayment, a discussion that should be had with career services on college campuses and student money management offices.  Families need to plan for what they’re willing to save and spend on a college education but also what they’re will to borrow.

College Financial Aid Disbursement: When and How to Expect It | Paying for  College | US News

financial aid for students

Types of Financial Aid

Financial aid is money to help pay for college or career school. Grants, work-study, loans, and scholarships help make college or career school affordable.A variety of financial aid sources are available to help you pay for college or career school.GrantsScholarshipsWork-Study JobsLoansAid for Military FamiliesAid for International StudyAid and Other Resources From the Federal GovernmentAid From Your State GovernmentAid From Your College or Career School

A variety of financial aid sources are available to help you pay for college or career school.

Financial aid can come from federal, state, school, and private sources to help you pay for college or career school.

Besides financial aid, you should also think about what you can do to lower your costs when you go to college.

“Types of Federal Student Aid” Video

Check out this video to learn about federal grants, loans, and work-study jobs and how they can help fund your education.


A grant is a form of financial aid that doesn’t have to be repaid (unless, for example, you withdraw from school and owe a refund, or you receive a TEACH Grant and don’t complete your service obligation). A variety of federal grants are available, including Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), Teacher Education Assistance for College and Higher Education (TEACH) Grants, and Iraq and Afghanistan Service Grants.


Many nonprofit and private organizations offer scholarships to help students pay for college or career school. This type of free money, which is sometimes based on academic merit, talent, or a particular area of study, can make a real difference in helping you manage your education expenses.

Work-Study Jobs

The Federal Work-Study Program allows you to earn money to pay for school by working part-time.


When you receive a student loan, you are borrowing money to attend a college or career school. You must repay the loan as well as interest that accrues. It is important to understand your repayment options so you can successfully repay your loan.

Aid for Military Families

There are special aid programs or additional aid eligibility for serving in the military or for being the spouse or child of a veteran.

Aid for International Study

Federal student aid may be available for studying at a school outside the United States, whether you’re studying abroad or getting your degree from an international school.

Aid and Other Resources From the Federal Government

Besides aid from the U.S. Department of Education (ED), the federal government offers a number of other financial aid programs. These programs include

  • tax benefits for education;
  • education awards for community service with AmeriCorps;
  • educational and training vouchers for current and former foster care youth; and/or
  • scholarships and loan repayment programs through the Department of Health and Human Services’ Indian Health Service, National Institutes of Health, and National Health Service Corps.

Federal student aid from ED covers such expenses as tuition and fees, room and board, books and supplies, and transportation. Aid can also help pay for other related expenses, such as a computer and dependent care. Thousands of schools across the country participate in the federal student aid programs; ask the schools you’re interested in whether they do!

Apply for federal student aid—grants, work-study, and loans—using the Free Application for Federal Student Aid (FAFSA®) form. And remember, the first F in “FAFSA” stands for “free”—you shouldn’t pay to fill out the FAFSA form!

You can estimate your eligibility for federal student aid and your Expected Family Contribution (EFC) with our Federal Student Aid Estimator. Be sure to use the tool before you fill out the FAFSA form.

Aid From Your State Government

Other than federal aid, you might be eligible for financial assistance from your state. Contact your state grant agency for more information.

Aid From Your College or Career School

Many schools offer financial aid from their own grant and/or scholarship funds. Find out what might be available to you:

  • Visit your school’s financial aid page on its website, or contact the financial aid office.
  • Ask at the department that offers your course of study; they might have a scholarship for students in your major.
  • Fill out any applications your school requires for its own aid programs, and meet your school’s deadlines.

Are Student Loans Financial Aid

Student loans are a great way to get the education you need, but they can also be intimidating. Here are five things you should know about student loans and financial aid:

  1. You don’t have to pay back your entire loan at once. The standard repayment plan is 10 years, but you can choose other options depending on how much you make and how much money you have in your budget.
  2. Student loans don’t affect your credit score—just your ability to borrow money in the future. This means that if you’re planning on buying a house or car soon after graduating, it’s important to make sure you don’t take out as much in student loans as possible so that you can still qualify for a loan later on down the line!
  3. There are lots of different types of student loans out there, but they all have one thing in common: they’re all going to cost more than what you would pay for tuition alone when considering interest rates! So it’s always best to try and keep costs down by looking into scholarships or grants first before taking out any type of loan at all!
  4. If something unexpected happens like an emergency medical procedure or an unexpected expense related directly

do you have to pay back financial aid

When it comes to paying for college, families have many financial aid options. But they should keep in mind that the type of aid received will determine whether it needs to be paid back. Students have to pay back financial aid if it is in the form of a loan, but they do not have to pay back grants, scholarships or money awarded through a work-study program.

Students eligible for grants or scholarships should exhaust those options before taking out any loans, experts say. But for many families, those kinds of financial aid aren’t enough. An average of 66 percent of graduates from the class of 2017 took out loans to pay for college, according to U.S. News data, and they borrowed nearly $30,000 on average.

With the nation’s student loan debt now reaching about $1.5 trillion, Marty Somero, director of financial aid at the University of Northern Colorado, says students are often responsible for researching loans and repayment plans, which can unintentionally lead to excessive debt.

Do You Have To Pay Back Financial Aid

financial aid grants

Federal Pell Grants are usually awarded only to undergraduate students. The amount of aid you can receive depends on your financial need, the cost of attendance at your school, and more. The Pell Grant application process is the same as any federal financial aid process—you need to complete the FAFSA.3

Academic Competitiveness Grants (ACG) are awarded to Federal Pell Grant recipients who have successfully completed a rigorous high school program, as determined by their state or local education agency and recognized by the Secretary of Education.

National Science and Mathematics Access to Retain Talent (SMART) Grants are available to students for their third and fourth academic years of college and are intended to encourage students to pursue college majors in high demand in the global economy, such as science, mathematics, technology, engineering and critical foreign languages.4

TEACH Grants provide grants to students who agree to teach in a high-need field for four years at an elementary school, secondary school, or educational service agency that serves students from low-income families. You’ll need to apply for a TEACH Grant every year by submitting the FAFSA. You’ll also need to complete TEACH Grant counseling and sign a new Agreement to Serve every year and meet other requirements.

Federal Supplemental Education Opportunity Grants (FSEOG) assist low-income undergraduate students who need a lot of financial aid to help pay for college. Each participating school receives a certain amount of FSEOG funds each year from the U.S. Department of Education’s Office of Federal Student Aid. Once all of the school’s FSEOG funds have been awarded to students, no more FSEOG awards can be made for that year.6

Iraq and Afghanistan Service Grants are available to students whose parent or guardian died as a result of military service after September 11, 2001, in Iraq or Afghanistan and meet other eligibility requirements.


Student loans are not financial aid. Student loans are considered in your financial aid package, but you will have to pay them back after you graduate.

If you want to avoid student loans and get more aid, there are some things you can do:

-Apply for scholarships

-Get a part-time job during the school year (or summer)

-Save money while you’re in high school so that you can pay for college yourself