The best financial aid is the type that students don't have to pay back. The three most common include grants, scholarships and work study.
Grants and scholarships are very similar in that students receive financial help to pay the cost of tuition and the student never has to pay any of the money back. Grants tend to be awarded to students based primarily on financial need, while those who receive scholarships will often demonstrate personal merit, such as academic performance, talent, chosen field of study or ethnicity.
Always keep in mind how scholarships and grants work. Elisia Howard, a Certified Financial Aid Advisor, points out one important trait of both. "Never pay to get a scholarship or any ‘enter to win' offers. Scholarships should always be free to apply to," Howard says.
Work study is a federal financial aid program where students get paid to work while in school. However, their compensation is subsidized by the federal government. Because of work study, students receive higher wages than they would with a regular job or are given a job the employer wouldn't otherwise be able to afford.
The vast majority of financial aid, including gift-based aid, requires that the student enroll in an approved postsecondary institution. This means, at a minimum, that the school is accredited by a federally recognized body.