Most college students rely on multiple sources of financial aid to pay for their education. While different types of funds can work together to form your aid package, you should take advantage of them in this order:
1. Free Money
Scholarships and grants are awarded based on financial need, accomplishments and/or abilities. They are gifts. You will not have to pay this money back.
2. Earned Money
A work-study job is a campus or community job and federal financial aid funds pay a portion of your wages. The number of hours is limited to allow you to focus on your studies and college experience. Although work-study is part of your financial aid package, you are responsible for getting the job based on referrals from the financial aid office. Work-study funds are offered to students based on financial need. You qualify by filing the FAFSA.
3. Borrowed Money
Loans are money that you pay back with interest. Start with federal loans, which offer the best interest rates and terms. Private loans should be your last option.
If your family is saving for your college education, a state-sponsored College Savings Iowa 529 account is an excellent option. Even non-family members can set up these accounts, starting with as little as $25. The earlier you can start saving, the farther your money will go.