Georgia Student Finance Commission

Types of Financial Aid

Financial Aid Basics

Types of Financial Aid

There are five types of financial aid to help pay for college - scholarships, grants, loans and work-study. Traditional savings and 529 savings plans are also ways families can contribute to the costs of college.



Review Federal Aid and State Aid programs at College Money Matters.



Source: Federal Student Aid


Scholarships are considered gift aid (or free money) because they generally do not need to be paid back.

  • These can be awarded by governments, colleges, and even private organizations for many reasons which include, but are not limited to, being a good student, excelling at a certain sport, being a member of a certain religious organization, your parent works for a particular company, based on your college major or where you live.
  • An example of Georgia scholarships that are merit-based (based on your academic standing) is the HOPE Scholarship and Zell Miller Scholarship.
  • Be careful when applying for scholarships and avoid scholarship scams. You don't have to pay anyone to search for a scholarship or fill out an application. There are many free searches available to you, including our Scholarship Search.
  • If you are especially accomplished in a sport, you may be able to win an athletic scholarship. Schools and athletes follow the rules of the association to which they belong. The National Collegiate Athletic Association (NCAA) is the largest. Learn more about athletic scholarships and student-athletes.
  • Check with your high school counselor or community library for other scholarship resources.

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Grants are a form of financial aid that also do not need to be paid back.

  • Grants can come from federal and state governments, as well as from individual colleges.
  • Many grants are need-based, which means they are usually awarded based on your or your family's financial circumstances. An example of a need-based grant is the Federal Pell Grant.
  • Some grants are considered non-need based grant (financial considerations are not involved in awarding decision-making). Examples of this would be Georgia’s own HOPE Grant and Zell Miller Grant

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Loans are borrowing money from a bank, government or lending institutions with the understanding you have to pay the money back. This type of financial aid is considered self-help aid. Loans will also have added interest that has to be paid back with the loan.

  • Loans borrowed from the federal government through the Direct Loan Program typically offer students a low-interest option compared to alternative loans through banks and other lending institutions. The federal government has established limits on the amounts of money students are able to borrow.
  • Subsidized loans are need-based loans which the government pays the interest while the student is in school. Unsubsidized loans are not based on income, but eligibility is determined by the student's class status, estimated cost of attendance and other financial aid awards.
  • With a Direct Plus Loan, the parent can borrow the remaining amount of your college costs, but they will have to complete a credit check application and can be denied based on these results.
  • The Student Access Loan is a 1 percent fixed rate loan, designed to assist students attending an eligible USG, TCSG or private postsecondary institution in Georgia who have a gap in meeting their educational costs.
  • Service cancelable loans are loans that can be repaid through service upon completion of your field of study. In Georgia, service cancelable loans include the Georgia National Guard Service Cancelable Loan and the Scholarship for Engineering Education.

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Undergraduate, graduate and professional students with financial need can participate in the Federal Work-Study program, numerous postsecondary institutions offer work-study employment opportunities to students.

  • On-campus positions include working at the dining hall or in the library.
  • Some colleges also have off-campus positions usually related to your course of study.
  • The money earned will help cover your educational costs, whether it is directly applied to your overall college cost or deposited into your bank account. 
  • Check with the financial aid or student employment offices at your college for more information.

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Savings Plans

Although not a form of financial aid, having a traditional savings account or, even better, a saving plan is a great way to offset the immediate out-of-pocket costs that going to college can have on a family.

  • Beginning a 529 college saving plan early on will allow your family more time to save for college costs and lessen the burden when payment deadlines roll around beginning freshman year.
  • For more information on the benefits and to open an account, visit Georgia’s Path2College 529 Plan.

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