Category: Grants and Scholarships

Earning a graduate degree is a great way to increase your income potential. In fact, Indeed reported that, on average, the earnings increase from a bachelor’s to master’s degree is roughly 20%. Nonetheless, it can be difficult to understand how to pay for grad school.

Graduate school can be expensive. According to FinAid.org, a graduate degree costs anywhere from $30,000 to $120,000, depending on the program. This makes financial decisions around paying for graduate school even more important.

While that reality may be overwhelming, there are several ways to pay for your graduate degree. Let’s break down your top 5 options: scholarships, fellowships, grants, work-study, and loans.

How To Pay for Grad School

As with any degree, there is a certain order you should follow when it comes to how you finance your education.

Scholarships, fellowships, and grants are all forms of free aid, or gift aid. Typically, scholarships, fellowships, and grants do not need to be paid back, so you’ll want to accept these first. 

>> MORE: What are the four types of financial aid for grad school?

After accepting any free money available to you, you should pursue work-study next. Federal work-study is considered earned money, meaning you have to trade your time to receive it. While not everyone will receive federal work-study, it’s a great option for those who do.

Loans should always come last in the process because they are borrowed money. When you borrow a loan, it’ll typically accrue interest, and by the time you pay it back, you’ll have paid a significant amount in interest. 

>> MORE: Compare student loan rates: how to pay for grad school

#1: Finding the Best Scholarships for Graduate School

Graduate scholarships are typically awarded based on academic or professional achievements. However, there are scholarships awarded based on other factors such as:

1. Financial need
2. Membership in a minority group
3. Residency status
4. Special interests

>> MORE: Best scholarships to help you pay for grad school

What GPA Do You Need to Get Graduate School Scholarships?

Typically, you’ll need around a 3.5 GPA to be a competitive applicant for most graduate school scholarships. That said, there are scholarship programs that have a lower GPA minimum. 

Where Can You Find Graduate School Scholarships?

You can find graduate school scholarships in a variety of places such as:

1. Professional organizations
2. From your school’s financial aid office
3. Online search engines

For example, the American Bar Association offers scholarships to first-year law students from underrepresented communities through their Legal Opportunity Scholarship.

For search engines, there are a wide variety of options available such as ScholarshipOwl, Scholarships.com, Chegg, and Fastweb.

#2: Exploring Graduate Fellowship Options

A fellowship is another form of free aid that you’ll want to seek out before taking on student loans.

What is a Graduate Fellowship?

A fellowship is an award given to graduate students to subsidize the cost of education. Some fellowships are awarded simply to fund your education, similar to scholarships. Other fellowships are awarded specifically to fund academic projects such as dissertations, thesis projects, or research.

Fellowships are awarded by schools, professional organizations, and nonprofits, typically based on merit.

>> MORE: How much does grad school cost?

How Much Can You Get From a Fellowship?

The amount you receive from a fellowship depends on the specific program. For example, the NSF Graduate Research Fellowship Program is a five-year fellowship that provides three years of financial support. Recipients receive an annual stipend of $34,000 and a cost of education allowance of $12,000.

The International Dissertation Research Fellowship (IDRF), however, provides a one-time stipend that varies depending on the research plan of the recipient. On average, each IDRF recipient receives $23,000.

When searching for a graduate fellowship, pay close attention to the length of the program and how the funds are disbursed to you or your university.

Is a Fellowship Better Than a Scholarship?

Fellowships and scholarships are both forms of free money, but you may have to complete an academic project to receive fellowship funding. If you’re interested in a particular academic project, a fellowship may be a solid option for you. If you’d prefer to receive free money with no strings attached, a traditional scholarship may be better for you.

While one is not necessarily better than the other, it’s important to understand how each one works to make an educated decision.

#3: Finding the Best Grants for Graduate School

Grants are similar to both scholarships and fellowships — they are free money you don’t need to pay back.

Who is Eligible for a Grant for Graduate School?

Typically, grants are awarded based on financial need. Some grant providers may have additional eligibility requirements such as having a certain GPA or enrollment in a specific program. Some may even require you to have specific research goals.

>> MORE: Best grants: How to pay for grad school

How to Find Grants for Graduate School

Graduate school grants can come from a variety of sources such as the federal and state government, your school, and professional organizations.

Federal Grants

To be eligible for any federal grants, you must complete the FAFSA. The information you provide on the FAFSA is used to determine your financial need, which is then used to determine your federal grant eligibility.

Does the Pell Grant Cover Graduate School?

As a graduate student, you are not eligible for the Pell Grant. The Pell Grant is intended for undergraduate students, minus a few exceptions.

State Grants

State grants are provided by individual U.S. states, and thus, each state grant program runs a little differently. Reach out to your state’s department of education to learn more about the grants they may offer.

School Grants

Some universities offer grants to students pursuing a graduate degree at their institution. Check with your specific program to learn more about the grants offered for your field of study. Don’t hesitate to ask the school’s financial aid office as well. There may be generic institutional grants available to both undergraduate and graduate students that you qualify for.

Professional Organization Grants

Professional organizations focus on advancing individuals within a particular profession or with specific interests. Because of this, they tend to offer financial assistance to those pursuing degrees within their field. For example, the American Bar Association and the American Marketing Association provide grants to eligible individuals pursuing related degrees.

>> MORE: Ultimate guide to college grants

#4: Getting a Work-Study Job for Graduate School

Work-study is a federal aid program that provides part-time jobs to undergraduate and graduate students with financial need. To be eligible for work-study, you must complete the FAFSA. Your application will determine if your level of financial need meets the minimum requirement of the work-study program.

>> MORE: How to fill out the FAFSA: application requirements

Who is Eligible for Work-Study?

Both full-time and part-time graduate students are eligible for work-study. If you accept the work-study aid offered to you, you will be responsible for finding a work-study role through your college/university. Speak to your school’s financial aid office for specific information regarding how work-study functions at your school.

How Much Money Can You Get in Work-Study?

The exact amount you receive in work-study will depend on the school you attend. Although, at minimum, work-study roles must pay the federal minimum wage. However, there are some work-study roles that offer more generous hourly rates.

>> MORE: What is a work study?

#5: Finding the Best Student Loans for Graduate School

Student loans should always be the last option when determining how to pay for grad school. The more you borrow, the more you will have to pay back due to the interest that accrues. That makes selecting a good student loan that much more important. 

>> MORE: Compare graduate student loan rates

What Makes a Graduate School Student Loan Good?

Cosigner vs No Cosigner

A cosigner is an individual that signs onto a loan alongside you, taking full responsibility for the loan if you’re unable to pay it back. A creditworthy cosigner can help you secure a lower interest rate and better terms.

If you don’t have access to a cosigner, that is okay, too. Non-cosigned loan options are available, but they may have higher interest rates.

>> MORE: Best student loans for without a cosigner

Minimum Income Requirements

If you are pursuing a graduate degree immediately after your undergraduate degree, you may not have a substantial full-time income just yet. Some private lenders have minimum income requirements, so if you plan to take out the loan without a cosigner, you’ll need to make sure you meet that income threshold.

Interest Rate

Each student loan will have its own unique interest rate and terms. Always compare interest rates carefully to select the loan that is best for you.

>> MORE: What is the average student loan interest rate

Repayment Options

Each individual lender will offer a unique set of repayment options. While some lenders may offer a deferred repayment option, allowing you to postpone repayment while in school, others may only offer immediate repayment. This would force you to begin making loan payments while in school, which many students are unable to do. Be realistic about which repayment options would work for you and ensure the lender you select offers them.

Federal & Private Loan Options for Graduate School

As a graduate student, you will likely have access to both federal and private student loans.

Federal

Federal student loans are provided by the federal government. To be eligible for a federal student loan, you must complete the FAFSA.

Private

Private student loans are provided by private entities such as banks, financial institutions, and nonprofits. To see what private student loans you qualify for, complete the Sparrow application.

>> MORE: Compare graduate student loan rates

Our Picks for the Best Private Student Loans for Grad School

The best student loan will always be the one that works best for you. However, the following are our top picks for graduate school student loans.

Arkansas Student Loan Authority

The Arkansas Student Loan Authority (ASLA) is an Arkansas state entity that provides educational funding for all Arkansas students who wish to attend higher education institutions. ASLA is a great option for Arkansas students.

Ascent – Cosigned Loans & Non-Cosigned Loans

Ascent is an online lender that offers three types of student loans: a traditional cosigned loan, a non-cosigned credit-based loan, and a non-cosigned outcomes-based loan. Collectively, the three options provide a great selection for those who do not have a cosigner available, are international or DACA students, or have lower credit scores.

Brazos

Brazos is a non-profit lender offering private student loans to Texas Residents. They offer a wide range of loan options, covering undergraduate, graduate, MBA, law, medical, dental, veterinary, and doctoral degree programs. Therefore, Brazos is a great option if you live in Texas, have strong credit, and want competitive interest rates.

College Ave Student Loans

College Ave’s student loan offering is available for undergraduate, graduate, professional, and career school students, as well as parents of students. Accordingly, it’s best if you are seeking a more flexible repayment term that allows you to find a loan that matches your budget.

Earnest

Earnest’s student loans are available to undergraduate, graduate, and professional students. It is best if you are seeking competitive interest rates, unique borrower perks, and flexible repayment options that allow you to find a loan that matches your budget.

LendKey

By connecting borrowers with a network of 100+ lesser-known credit unions and community banks, LendKey allows you to work with smaller lenders with low rates and good customer service, rather than traditional lending institutions. LendKey’s student loan offering is available to undergraduate and graduate students. In addition, it’s best if you have strong credit and want generous cosigner release and forbearance policies.

MPOWER

MPOWER is an online lender that offers non-cosigned undergraduate and graduate student loans to international, domestic, and DACA students. Accordingly, it is best for international students and DACA students who don’t have a credit history and can’t access a qualified cosigner. 

Prodigy Finance

Prodigy Finance is an online lender that offers non-cosigned graduate student loans to international students. Accordingly, it is best for international students who don’t have a credit history and can’t access a qualified cosigner. 

SoFi

SoFi is a strong option for undergraduate, graduate, law, and MBA students, as well as parents looking to fund their child’s education. With competitive interest rates, a diverse set of repayment options, and exclusive member benefits, SoFi is a good fit for borrowers with a strong credit score or a creditworthy cosigner.

Final Thoughts from the Nest

While graduate school can be a costly affair, there are a variety of ways to pay for it. When figuring out how to pay for grad school, always remember to pursue aid in the following order: scholarships, grants, fellowships, work-study, student loans.

When it comes time to check out private student loan options, start with Sparrow.

Sparrow’s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

If you are considering going to grad school after college, you may be wondering, “How much does grad school cost?”

Making the decision to attend graduate school is one thing, but paying for it is another issue. Whether you plan to take out graduate student loans, receive a scholarship, or pay out-of-pocket, being aware of the average cost of grad school and how it varies is important. 

On Average, How Much Does Grad School Cost?

The average cost of tuition for public grad schools is roughly $30,000 per year, while private grad schools cost around $40,000 per year. However, these figures do not apply to specialized degrees in medicine and law, which usually cost significantly more. 

While you are calculating the cost of grad school, be sure to think about the cost of attendance (COA), in addition to the tuition. The COA is the total amount of money you will have to pay to attend grad school, including tuition and other fees like transportation, room and board, school supplies, and more. 

>> MORE: Compare college graduate student loan rates

Is Grad School More Expensive than Undergrad?

There is no “right” answer to the question of whether grad school is more expensive than undergrad, as the price depends on your field of study, type of degree, and other factors. 

Generally, medical, law, and other specialized degrees cost more than an MBA or a Master of Arts. STEM degrees can also be pricier than a degree in humanities or social sciences, given that there may be additional costs in labs, equipment, and other materials. 

Is Graduate School Worth the Price?

The question of whether grad school is worth the cost ultimately depends on your personal aspirations and financial standing. 

Before making the decision, be sure to carefully weigh the pros and cons. Here are some things to consider: 

Pros of Attending Grad School

• More scholarship opportunities: Grad schools are usually more generous with their scholarship offerings than undergraduate programs are. If you take the time to find and apply for scholarships, you may be able to offset the cost of your tuition. 
• Career advancement: An advanced degree can unlock career doors for you that may not have been accessible with only a Bachelor’s degree. 
• Increased salary: The average salary of an individual with a Master’s degree is higher than the average salary of an individual with a Bachelor’s degree. By going to grad school, you can increase your earning potential.
• Specialized study in the field you love: If you’re going to grad school, you are probably going to study something that you love and enjoy. By attending graduate school, you will be able to have an in-depth, specialized study of the field and become an expert.

>> MORE: How to budget as a college graduate

Cons of Attending Grad School

• Loss of opportunity to make more money: A majority of undergraduates decide to work in the industry after graduation. Going to grad school may be a potential loss of income that you could have made had you begun working instead. 
• Loss of time: Attending grad school can take anywhere from one to three years, in general, which may set you behind in comparison to your peers.
• Potential student debt: If you don’t receive any financial aid or gift aid, you may need to take out graduate student loans to afford the cost of attendance. If you have previous debt from your undergraduate education, you may be shouldering even more student loan debt.
• Delayed work experience: You may miss out on industry experience if you decide to go to grad school. 

>> MORE: Best options: graduate student loan lenders

How to Pay for Grad School

As with any degree, there is a certain order you should follow when it comes to how you finance your education.

Scholarships, fellowships, and grants are all forms of free aid, or gift aid. Typically, scholarships, fellowships, and grants do not need to be paid back, so you’ll want to accept these first. 

>> MORE: Learn more about 5 strategies to pay for the cost of grad school

After accepting any free money available to you, you should pursue work-study next. Federal work-study is considered earned money, meaning you have to trade your time to receive it. While not everyone will receive federal work-study, it’s a great option for those who do.

Loans should always come last in the process because they are borrowed money. When you borrow a loan, it’ll typically accrue interest, and by the time you pay it back, you’ll have paid a significant amount in interest. 

>> MORE: Compare student loan rates: how to pay for the cost of grad school

Closing Thoughts From the Nest

Attending grad school is a big decision to make. Be sure to reach out to current graduate students, academic mentors, and other role models who have been in your position before. 

When it comes to financing the cost of your grad school tuition, be sure to consider all of your options. If you want to explore graduate student loans, consider submitting a free application with Sparrow. Sparrow allows you to compare your pre-qualified, private student loan options across 17+ different lenders.

Sparrow aims to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

Now that you’ve been accepted into college, it’s time to figure out how you are going to pay for your education. As you sift through your financial aid packages, it may be confusing to differentiate between the different types of financial aid you were offered. 

In this article, we’ll cover everything you need to know about the different types of financial aid and how you should go about accepting your financial aid package. 

The 4 Types of Financial Aid

There are four key types of financial aid: scholarships, grants, work-study, and loans. 

Scholarships

Scholarships are a form of financial aid that is awarded based on academic merit or other achievements. They do not need to be paid back (yay!). 

Scholarships are a popular form of financial aid. In fact, 58% of families paid for some amount of their college tuition with scholarships in 2020. 

Scholarships come in all shapes and sizes. Depending on the organization that is offering the scholarship, scholarships can range from $100 to the entirety of your four-year tuition. 

Usually, you have to apply for scholarships by providing general information about yourself, writing an essay to a prompt, and demonstrating why you are the best candidate for the scholarship. However, there are also scholarships that you can apply to with a single click of a button or through other creative means. 

Where Do Scholarships Come From?

Scholarships come from a variety of sources, including state governments, private organizations, non-profit organizations, academic institutions, and more. 

What Can I Use Scholarships For?

This depends on the type of scholarship you receive. Some scholarships require students to use the money on specific expenses, such as textbooks and school supplies, tuition, or university housing costs. Other scholarships are more flexible and allow the student to use the money on an educational expense they deem fit. 

How Do I Find Scholarships?

There are a variety of ways you can find and apply for scholarships. You can:

1. Reach out to your high school and/or college’s financial aid office and ask for assistance in finding scholarships. 
2. Use scholarship search engines like Bold, Sallie Mae’s Scholarship Search, or Chegg.
3. Find organizations that specialize in your academic field of study. For example, if you are on a pre-dental track, find dental organizations and see if they offer any scholarships. 

Grants

Like scholarships, grants do not need to be paid back. However, grants are only issued based on financial need, meaning you must meet a specified financial threshold to be an eligible recipient. 

Most likely, federal grants, which are offered by the federal government, will be applied to your financial aid package. Non-federal grants are very similar in nature to scholarships, so this article will focus on the different types of federal grants.

What Types of Federal Grants Are There?

There are four types of federal grants:

1. Federal Pell Grants
2. Federal Supplemental Educational Opportunity Grants (FSEOG)
3. Iran and Afghanistan Service Grants
4. Teacher Education Assistance for College and Higher Education (TEACH) Grants

Work-Study

Work-study is a federal program that allows undergraduate and graduate students to work on-campus and earn money to pay for their educational expenses. Any money earned from the federal work-study program does not need to be paid back or used towards tuition – the student can use the money how they deem fit. 

Who Is Eligible for Work-Study?

To be eligible for work-study, you must meet the following requirements:

• You must be enrolled as a full-time student at an accredited university. 
• You must have submitted your Free Application for Federal Student Aid for the school year.
• You must demonstrate financial need. 

Loans

There are two main types of loans: federal student loans and private student loans. Because loans are borrowed money, they must be paid back with interest. 

Accepting loans is a large responsibility – you’ll want to know exactly what you are getting into before you take on any debt. 

Federal Student Loans

Federal loans are a type of loan that is offered by the federal government. Generally, federal student loans are the best option for student borrowers because of their varied repayment plans, strong borrower protection, flexible eligibility requirements, and potential for federal loan forgiveness.

All federal student loans have a fixed interest rate that is set by Congress, meaning the interest rate you receive when you originate the loan will remain the same throughout the life of the loan. 

Most students are offered a mix of unsubsidized and subsidized Federal Direct Loans. 

Between unsubsidized and subsidized loans, subsidized loans are clearly the winner. However, you cannot pick and choose between these loans – you must meet a financial requirement to be eligible for subsidized loans. 

Private Student Loans

Private student loans are offered by private entities like banks, financial institutions, and other private companies. Private student loan lenders are autonomous, meaning they set interest rates, repayment plans, and borrower protections as they please. 

If you are a first-time borrower, it may be difficult to receive a private student loan that has a fair interest rate, or even receive a private student loan at all. You will most likely need to add a cosigner that has a strong credit history to your loan to receive better terms. 

Generally, experts recommend that you accept federal loans before private loans because federal loans tend to have better interest rates, repayment terms, and borrower protection plans for the borrower. 

Accept Financial Aid in This Order

If there is one thing to take away from this article, it is FEB — Free, Earned, Borrowed.

You’ll want to accept financial aid in this order, starting with any free money, then earned money, and then borrowed money. Accepting aid this way will help you minimize the amount of debt you incur. 

Free Money: Scholarships and Grants

Scholarships and grants are essentially free money. They do not need to be paid back, so feel free to take as much as you can get. Any federal grants that you are eligible for will show up on your financial aid package, so you can accept them through your account portal. 

On the other hand, you will have to apply for a majority of scholarships, so be sure to do that. 

Earned Money: Work-Study

Next, you’ll want to accept any work-study that is offered on your financial aid award. While work-study money is earned and is not free, work-study still lowers the amount of money that you will need to borrow. 

Borrowed Money

Borrowing money is a large responsibility, given that the amount you owe can spike immensely with interest accrual. You’ll want to accept any borrowed money in the following order so that you can graduate with the least amount of debt. 

#1: Federal Subsidized Loans

Federal subsidized loans do not accrue any interest while you are enrolled at least half-time in school, during your grace period, as well as during loan deferment periods. Because interest does not capitalize on these loans, federal subsidized loans will be your cheapest loan option.

#2: Federal Unsubsidized Loans

Federal unsubsidized loans accrue interest for the entire life of the loan. However, because the loans are offered by the federal government, they come with a myriad of repayment options, borrower protection plans, potential loan forgiveness, and deferment plans. 

#3: Private Student Loans

Private student loans should be accepted last. While you may be able to receive a more competitive interest rate if borrowing with a cosigner, private student loans have more limited repayment options and are not eligible for loan forgiveness. 

Closing Thoughts From the Nest

As you navigate through your financial aid packages, remember to accept your financial aid in the following order: FEB (Free, Earned, Borrowed). It is a helpful guide for accepting financial aid to take on the least amount of debt possible. 

If you are still exploring private student loan options, consider using Sparrow. We offer a quick, free application that allows you to see which student loans you qualify for across 15+ private lenders. 

College is expensive, but that doesn’t mean you should accept every last bit of financial aid. Now I know, that probably sounds counterintuitive. I mean, who wouldn’t use all the offered financial aid?!

However, there are many instances where financial aid can actually be detrimental rather than helpful, so knowing when to decline certain financial aid options is very important. The general rule is to borrow only what you need for direct educational expenses (things like rent, tuition, books, etc.). Avoid wasting financial aid on non-educational items, as that could lead to greater issues in the long run.

To know whether you should accept the aid offered to you, it’s important to understand the different types of financial aid available to you. Here’s what you should know.

>> MORE: What are the different types of financial aid?

What is Considered Financial Aid?

Financial aid can be anything from grants, scholarships, work-study jobs, loans, and even aid from local or state sources. Essentially, financial aid is provided to students to help you focus on what’s important —your education. Using financial aid for other expenses can make for a sticky situation.

Do I Have to Accept All of My Financial Aid?

Absolutely not! In fact, many financial aid experts recommend that you only accept what you really need.

While accepting scholarships and grants is often harmless, you should be careful about how much you accept in student loans. While borrowing money is often necessary for many students, borrowing more than you need can wind up costing you a lot more in the long run. This happens as the cost of borrowing money is compounded by the interest rate of the loan. 

>> MORE: What is the average student loan interest rate?

Estimating your budget and expenses to determine the amount of money you will need to borrow is the best way to only borrow what is needed. 

Accept Aid in This Order

As mentioned before, financial aid comes in various forms: grants, scholarships, work-study jobs, and loans. If you want to save money,  however, you should accept aid intentionally and in this order: 

1. Scholarships and grants. If it is free money, take it.
2. Work-study. Any earned money should come second.
3. Federal student loans, followed by private student loans. Borrowed money should always come last.

Because scholarships and grants are practically free money, you should always try to use those first before looking at other options. One thing to note is that many scholarships and grants have conditions you must meet to either be eligible for or to continue receiving the funds over the course of your education. Thus, although there may not be financial terms like a loan, it is imperative that you understand the criteria for this financial aid option. 

A work-study program is quite simple. You work for the money, so you don’t pay it back. This means you will have to spend time both working and studying. While it may be a bit more to juggle, there have been studies that show students who have a part-time job and study are better at managing their time.

Federal student loans and even private student loans should come last. With loans, you will have to pay the money back, plus interest. Depending on the type of student loans, you may receive a subsidized loan meaning interest won’t start accumulating until you leave school. So, if you have the option, choose a subsidized loan before an unsubsidized loan. 

>> MORE: Find the best student loan rates

Know When to Decline Certain Financial Aid

With the basics of financial aid covered, let’s look at specific instances where it is favorable to decline certain financial aid.

You Are Paying Out of Pocket

If you intend to pay out of pocket for school, you don’t actually need to accept the loans in your financial aid package. Instead, you should look for more “free money” options, like scholarships and grants.

You Can Find Aid With More Favorable Terms Elsewhere

If you do decide to borrow a loan, you should look for the best lender that is offering the most favorable terms. For example, Parent PLUS Loans often have higher interest rates. Therefore, you may actually be able to find lower interest rates with private loan lenders. In this case, you may want to consider all your options before accepting the PLUS loan. 

>> MORE: Parent PLUS loans: Everything you need to know

Is It Okay to Accept All of It?

Now that we’ve gone over when to decline certain financial aid and how to sort through all the different options, let’s go back to the original question. Do you have to accept all financial aid?

No, you don’t have to accept all of the financial aid offered to you. However, it is still very important to note that it is okay to accept all of it. If you believe the financial aid options are favorable to your circumstances, then it is totally fine to accept it. Just make sure you do your research and have all your questions answered before rushing into something.

>> MORE: What is the best type of financial aid?

Final Words

Knowing when to accept and decline financial aid is very tricky. However, with the right guidance and due diligence, you can optimize your decisions and make the most out of your financial situation.

Don’t be afraid to say no to financial aid, and remember that although some aid may seem like free money, you should always research the terms of everything offered to you. Take your time to find the best options that will put you in a better position, both financially and mentally.

Sparrow aims to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

Many people don’t talk about the different pathways that you can take after high school graduation, except the traditional four-year college route. Going to trade school is a viable option to consider if attending college is not for you. You may be wondering, ‘what is trade school’ and ‘is trade school free?‘

Trade school has a shorter time commitment, is less expensive, and teaches you specialized skills for direct entry into the career field of your choice after graduation.  

Because going to trade school is a lesser-known option, many students have no idea what trade school is, how they can apply, and what they can do with it.

What is Trade School?

Trade school, also known as career, technical, or vocational school, is a specialized institution that provides students the skills, hands-on training, and education necessary to work in a specific “trade” or occupation right after graduation. 

These occupations are typically hands-on careers, like cosmetology, plumbing, welding, carpentry, and automobile repair. 

For most trade schools, a high school diploma or GED is necessary to attend. 

Trade School vs. College

Pros and Cons of Trade School

Consider the pros and cons of attending trade school carefully before making your decision.

Pros of Trade School

1. Time: Trade school only takes a maximum of two years, which is half the time you spend at a traditional four-year college. Once you’ve graduated, you can find employment almost immediately. If you’re looking for a relatively short time commitment and quick employment, trade school might be the best option for you.
2. Money: On average, trade school is less expensive than a four-year college. Because trade schools are anywhere between eight months and two years, you’ll be paying for a shorter period of time as opposed to if you went to a four-year institution. Plus, if you’re eligible for financial aid or employer-paid tuition reimbursement, you might even attend for little-to-no cost.
3. Specialized Education: You don’t need to take any general education courses, like math, English, or science, at trade school. All your education will be centered around the field that you are specializing in, and you’ll receive focused, hands-on training. 
4. Career Assistance: Most trade schools help their graduating students secure jobs within their specialized industries. Generally, trade schools offer skilled trades-focused career fairs, early employment assistance, and a wide network of employers.

Cons of Trade School

1. Varying Reputability and Quality: When you’re researching prospective trade schools, be sure to dive deep into the student assistance programs, completion rates, and job placement statistics of the school. Trade schools vary in reputability and quality, and you don’t want to attend a trade school that won’t provide you with the necessary skills and assistance to earn your trade certificate and be employed after graduation.
2. Accreditation: Not all trade schools are properly accredited, meaning that these schools do not qualify for federal financial aid. If you do not attend an accredited trade school, you will most likely have to pay out of pocket or turn to private lenders. 
3. Limited Career Selection/Flexibility: Because you’ll be learning the technical skills necessary for one specific industry, it will be difficult to secure jobs outside of your specialized field. For example, if you attend a trade school for HVAC (Heating, Ventilation, and Air Conditioning), it will be near impossible to obtain a job in plumbing or cosmetology without going back to school. 

Is Trade School the Right Choice for Me?

Here are some questions you should ask yourself when deciding whether or not trade school is the right choice for you:

1. Do I know what I would specialize in? Do I want to specialize in it? Why?
2. Do I want to start working right after graduation?
3. Can I see myself dedicating time and effort to this career, or will I get sick of it quickly?
4. Is there a demand for this job in the market?
5. Will this career allow me to be financially stable?

How to Pay for Trade School

While the cost of trade school is relatively cheaper than a four-year college, you’ll want to be informed of the options you have for financing your education. While trade school can cost just a few thousand dollars, pricier trade schools can cost up to $17,000 per year.

Public trade schools are usually cheaper than private trade schools, so be sure to compare tuition and additional fees between schools to avoid paying more than you need to. 

>> MORE: What are the 4 types of financial aid for students

Scholarships & Grants

Scholarships and grants are both forms of gift aid, meaning they do not need to be repaid. They are great ways to defray the cost of tuition, and there are many options available for trade school students.

For example, the DEWALT Trades Scholarship offers 20 scholarships of $10,000 for incoming trade students who intend to pursue full-time study. The Porch Skilled Trade & Technology Scholarships award $2,000 to eligible students.

You can find more scholarships and grants for trade school students by using scholarship search engines.

Federal Student Loans

The federal government offers student loans for students pursuing postsecondary education. To find out which loans you qualify for, you will have to submit the Free Application for Federal Student Aid (FAFSA).

The FAFSA opens on October 1st and closes on June 30th every year. Be sure to take note of these dates, and submit your FAFSA as soon as possible to qualify for as much aid as you can get. 

You should prioritize federal student loans over private student loans, as federal student loans generally have lower interest rates, flexible repayment options, and borrower protection plans. 

>> MORE: Most common errors to avoid when filling out the FAFSA application

Private Student Loans

If scholarships, grants, and federal financial aid don’t cover the cost of tuition for you, consider getting a private student loan.

Private student loans are offered by private organizations that set their own interest rates, repayment options, and borrower protection terms. 

Because private student loans operate individually and are not all partnered with the same trade schools, it can be challenging to find what private loans you qualify for with different trade schools. 

Sparrow can help. If you submit a free application with us, you can see what private student loan options you have with the trade school of your choice. Here are a few of our top picks for student loans for trade school:

>> MORE: Best private student loans of 2023

Sallie Mae’s Smart Option Student Loan for Career Training

Sallie Mae is one of Sparrow’s lending partners that offers competitive interest rates, multiple repayment options, and no origination fee or prepayment penalty. Sallie Mae is one of the largest private student loan companies that lend to undergraduate, graduate, MBA, law, medical, dental, and career training program students. 

>> MORE: Sallie Mae student loans review

College Ave Career Loans

College Ave is an online student lender that aims to simplify, clarify, and personalize the student loan borrowing experience. College Ave is known for its competitive interest rates, strong customer experience, and for allowing its customers to choose their own loan terms. 

Ascent Career and Bootcamp Loans

Ascent is a private student loan lender that does not require cosigners or have any application fees. They offer both outcomes-based and credit-based loans, making Ascent an extremely attractive lender for first-time borrowers and students with no credit history.

Closing Thoughts From the Nest

With the skilled labor shortage, going to trade school is a great option if you’re looking for an affordable education and to be employed quickly.

Be sure to thoroughly research trade school programs before making a selection; many trade schools differ in reputability, curriculum, student support services, accreditation, and cost. Remember that if a trade school is not accredited, you will be unable to receive federal financial aid.

Sparrow’s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

Once the summer wraps up, it’s the busiest time of the year for high school seniors: college application season.

From juggling deadlines, to standardized tests, to finalizing your college list, the process of applying for college can become quite tumultuous and hectic. 

If you need a breakdown on how to apply for college, here’s seven easy steps you can follow to guide you through the process.

Step One: Visit Colleges

Many students fixate on the academic fit, student culture, or prestige of colleges when forming their college list, often without considering where they will be living for the next four years of their life.

Visiting prospective colleges in-person is an important step to take when figuring out what you’re looking for in a college geographically, spatially, and climate-wise.

For example, if you’re from a big city and the college you’re visiting is in a tiny, suburban town, consider how adaptable you might be with the change. If you’ve grown up in sunny weather your entire life, consider how altered climates might impact you. 

Visiting colleges is also a great way to get a feel for campuses, interact with students, and attempt to envision your four years there. After all, seeing pictures of a college campus on the Internet versus being there in person are incomparable.

If visiting colleges is not an option for you, opt-in for virtual tours that the college offers, and contact the admissions office to connect you with current students who can share their experiences with you. 

Step Two: Take the ACT or SAT

Due to the COVID-19 pandemic, many universities became test-optional for the application cycle, and some even became test-optional permanently.

Test-optional is when the student is allowed to submit their college application sans standardized testing scores, without any disadvantage to their strength as an applicant.

The UC System has gone test-optional permanently, Harvard extended their test-optional policy to 2026, and now MIT has gone back to requiring standardized test scores. 

Because the test-optional policy varies from school to school, be sure to determine which schools require standardized test scores so you’ll know whether or not you will need to take the ACT or SAT.

Despite the test-optional policy, students are highly encouraged to take the ACT or SAT if their circumstances allow it. A strong standardized testing score is a beneficial addition to your application, and if the schools you are applying to do not require test scores, a weak score can’t hurt your application.

When deciding between the SAT and ACT, take a timed, “real-life” attempt at a practice test for both the SAT and the ACT and see which test you do better on. 

Here’s a breakdown of the structural differences between the ACT and the SAT.

Source: The College Board

Step Three: Narrow Down Your College List

Once you’ve attended both in-person and virtual college tours, spoken with students who are attending potential college options, and made a list of prospective schools, it’s time to narrow down your list.

 Group your schools into safety schools, target schools, and reach schools.

Make note of the application fees and deadlines that are specific to each school. Submitting applications can cost from $35-$90, but if you qualify for financial aid, application fees may be subsidized.

Step Four: Complete the FAFSA

The Free Application for Federal Student Aid (FAFSA) opens on October 1st and closes on June 30th. You must submit the FAFSA to be eligible to be considered for federal financial aid, such as grants, loans, and scholarships. 

Almost all schools in the United States require students to submit the FAFSA to gauge a student’s financial need and award financial aid packages. 

Financial aid is disbursed on a first-come, first-serve basis, so be sure to submit your FAFSA as soon as possible after the October 1st open date the year prior to when you plan to enroll.

Step Five: Make Note of Application Deadlines

Colleges have individual application deadlines that you should stay on top of. Create a Google sheet with the schools you are applying to, how you are applying, and which deadline to meet.

Generally, there are three ways to apply to a college: early action, early decision, and regular decision. You should note that individual research must be conducted to familiarize yourself with a school’s application processes.

• Early action: You submit your application earlier than the regular deadline (usually due in the fall of your senior year) and hear whether you’ve been accepted or not from the schools earlier in the year. Early action is not binding and may increase the chances of being admitted.
• Early decision: You submit your application earlier than the regular deadline and must commit to the school if you are accepted. Students generally apply early decision if they are set on attending a specific school. Students cannot apply early decision to multiple schools since it is a binding agreement.
• Regular decision: You submit your application by the regular deadline (usually in the winter) and hear back from schools within the regular time frame.  

Sample Way to Organize Application Deadlines:

Step Six: Get Your Application Materials Ready

Here’s a handy list of application materials you will need when applying for college:

1. High school transcripts: You can access your transcripts from your high school. Schools will usually ask for either an unofficial or official transcript. An unofficial transcript is usually available online and can be easily accessed by you. An official transcript is sent from your high school to the requesting institution directly. 
2. Letters of recommendations (usually two): Colleges will usually ask for two recommendation letters. It is encouraged that students submit one letter of recommendation from a STEM (Science, Technology, Engineering, or Math) teacher and the other from a Humanities/Social Sciences teacher. If there is the option to submit additional letters of recommendation, take advantage of this. When asking teachers for recommendation letters, be sure to ask early so that they have ample time to write a stellar letter.
3. Personal statement essay: Your personal statement essay is the main college essay that you will apply to every college with. It should describe an important aspect of yourself that you wish to highlight.
4. List of extracurriculars with descriptions: Keep your resume handy for the extracurriculars section of your college application. You will be asked to detail your extracurricular activities, highlight any awards or leadership positions, and describe your roles.
5. Test scores: AP Test score(s), SAT/ACT score

Be sure to check with individual schools for specific application requirements.

Step Seven: Submit Your Application

You can submit all of your college applications online through common applications, which allow you to send your application to multiple schools from one portal. 

1. The most popular common application is the Common App, which is used by 900+ colleges. 
2. The Coalition for College is another common application that is partnered with 150+ colleges.

Bonus Steps

While not necessarily part of the college application process, these last few steps are important in actually getting to college.

Step 8: Review Your Financial Aid Awards

Congratulations! You’ve been accepted into college and have received multiple financial aid awards to consider and compare.

You’ll want to find the net price that you’ll have to pay for the school year and compare your aid offers. The net price is the total that you pay for the school year once all scholarships, grants, and loans have been factored in. 

First, create a spreadsheet with a column for each of the schools that you were accepted to. 

You’ll want to record the cost of attendance, the amount of free aid that you’ve received, the amount you’ll have to borrow, and the cost of attendance when subtracted from the free aid. For an example of what this can look like, check out this table.

Take note of the following considerations: Which school offered the most financial aid? What is my family’s financial budget? Which financial aid offers are reasonable to accept, and which are not?

If you have any questions about your financial aid offer, contact the school’s financial aid office for assistance. 

Step Nine: Accept the Admissions Offer and Put in Your Deposit

After much consideration, you’ve finally decided which school you want to attend from the extensive list of schools you were offered admission from.

Though it may differ from school to school, the standard acceptance deadline is May 1st, which is National College Decision Day.

When you do decide which offer to accept, you will likely be required to put a deposit down to secure your spot. Your school should instruct you on how to pay your deposit, so keep a lookout in your email for the information.

Step Ten: Explore College Financing Options

Scholarships, grants, and student loans are the three main ways that students cover the cost of tuition.

1. Scholarships

Scholarships are a form of gift aid that is awarded based on merit and personal achievements. You do not need to pay back any scholarships that you receive. 

All students can apply for scholarships and win free money for school. Here are some of our favorite scholarship search engines:

• Sallie Mae
• Scholarships.com
• Chegg.com

Be sure to look into the scholarships that your school offers; the applications for these scholarships are usually due by the start of the school year. 

2. Grants

Grants are another form of gift aid that are awarded based on financial need. Your financial aid package should include grants that you are eligible for, and you should accept all the grants that you receive because they do not have to be paid back.

Outside of the grants that you’ve received from your financial aid offer, you can apply to grants that are offered by the federal government, your state, private organizations, and your school.

3. Federal Student Loans

Federal student loan offers should show up in your financial aid package. These are loans offered by the federal government and generally offer better terms for undergraduate borrowers as opposed to private student loans.

Federal student loans are usually unsubsidized or subsidized. With subsidized loans, the federal government will pay the interest that accrues while you are in school. So, when you graduate, the balance on your subsidized loan will be the exact amount you borrowed. With unsubsidized loans, the government will not cover the interest that accrues. So, when you graduate, the unsubsidized loan balance will be the amount you originally borrowed plus the interest that accrued while you were in school. 

If given the choice between an unsubsidized and a subsidized loan, go with the subsidized loan. 

Be sure to give priority to your federal student loans and turn to private student loans as the last resort.

4. Private Student Loans

If your federal financial aid doesn’t cover all of your tuition, consider applying for private student loans. 

Private student loans are offered by private organizations, like banks and financial institutions.

These should be your last resort options, as interest rates are usually higher for private student loans and repayment plans tend to be less flexible.

When you’re looking for private student loans, Sparrow can help. Sparrow offers a free application that once submitted, matches you with private student loans you qualify for. Sign up today.

Closing Thoughts From the Nest

We hope that this step-by-step guide helps you along your college application journey. We’ve all been there before, and we know you can do it!

If you need any assistance regarding how to apply for college, reach out to your high school’s college counselor, speak with upperclassmen, and use your resources. Best of luck!

Sparrow’s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

According to Education Data, American parents save $5,143 annually for their kid’s college, on average. Without this parental support, paying for college can feel out of reach. However, each year, thousands of students pay for college on their own, successfully utilizing a variety of resources to support them. 

Here’s how you can pay for college without your parents’ help.

#1: Start Saving Early

While there are a variety of recommendations regarding how much to save, the approaches may not be feasible if you are paying for college on your own. So, rather than focusing on saving a certain amount, focus on saving as much as you can. Consider picking up a side hustle or part-time job prior to college to provide you with an additional income.

If you are in a position where you are unable to direct any income towards saving for college, don’t worry — you aren’t out of luck. While helpful to have some cash to put towards college, it isn’t a make-it-or-break-it factor.

#2: Utilize AP Classes

As a high school student, you may be offered the opportunity to take AP courses. While these courses require additional labor, they can save you thousands of dollars if counted for college credit.

What are AP Credits?

The Advanced Placement (AP) program was created by the College Board to provide high school students the opportunity to take college-level courses and earn college credit for doing so. The program offers a wide variety of courses, from AP English Language and Composition, to AP US History, to AP Psychology.

At the culmination of each course, AP students are offered the option to take the AP exam. If you score sufficiently on it, you could gain college credit and skip the equivalent course in college. Skipping the equivalent college course could allow you to graduate early, which in turn could save you thousands of dollars in tuition and fees.

How Much Can AP Credits Save You in College?

The amount of money AP credits can save you varies greatly depending on the courses you take, the school you choose to attend, and the major you decide to enroll in.

Each school will have its own unique AP credit policy. So, while some schools may only accept 5s on the AP exam (the highest you can score), other schools may accept 3s and up. Likewise, some programs may require you to take all of the major courses at the school itself, which could discount your AP credit. Let’s break this down with an example.

Let’s say you apply to the University of Connecticut.

If you take the AP English Language and Composition exam, you will only be eligible for the equivalent UConn course credit if you score a 4 or 5. However, if you took the AP Calculus BC exam, you would only need to score a 3 to be eligible for the equivalent UConn course credit.

If you do earn a qualifying score, though, you would earn anywhere from 3 to 6 credits on average. At UConn, 15 credits is the average semester course load. So, if you took 5 AP courses throughout your high school career and earned qualifying scores on all exams, you may be able to knock an entire semester off of your college career at UConn.

At UConn, out-of-state tuition is around $20,000 per semester. So, in theory, the AP credits could save you nearly $20,000.

While this will change from school to school, the same idea applies. Depending on the courses you take, the school you attend, and your AP score, you could save a decent chunk of money. 

How to Find Out Where Your AP Score Counts

If you applied to multiple schools, check to see which school(s) will accept your AP scores for credit. Simply search for “[school name] AP credit policies” to find each school’s policy.

If you already have your AP test scores in hand, check to see which scores will qualify for the equivalent course credit at each school. If you don’t have your test scores yet, see which school takes lower scores. The lower the accepted score, the more likely you are to score high enough for it to count for credit.

If you have specific questions regarding how your AP credits could help you graduate early, reach out to your intended college’s program directly. They will be able to provide you with a more accurate assessment of how your AP credits may be applied to your degree to save you money in the long run.

#3: Be Strategic About Which School You Choose to Apply To

The cost of college will differ greatly depending on the type of school you choose to attend. For example, while the average cost of a 4-year in-state public institution is $25,487 per year, the average cost of a full-time in-district community college program is $3,730 per year.

When paying for college without your parents’ help, you may find more affordable college options more appealing. Consider the average cost of each college program when deciding where to apply. 

Likewise, consider the application fees of each school. To avoid paying hundreds of dollars in application fees, narrow down your list of schools to the ones you could truly see yourself attending. For the ones you do apply to, contact the school directly to ask about an application fee waiver. Many schools waive application fees for students like yourself who are navigating the college process without parents.

#4: Apply for Scholarships

Scholarships are essentially free money. (Yup, money you don’t have to pay back.) So, it’s recommended that you exhaust all scholarship options before considering student loans.

Throughout the search process, you will encounter a variety of scholarship opportunities, such as academic scholarships, private scholarships, institutional scholarships, and need-based scholarships.

To find scholarships to apply to, consider the following sites:

1. Sallie Mae’s Scholarship Search Tool: While Sallie Mae is one of the most well-known private student loan companies, they also offer a robust scholarship search engine. After registering, the engine will send you customized scholarship recommendations based on your profile.
2. Scholarships.com: As one of the most established scholarship websites, Scholarships.com has reported nearly $19 billion in scholarships, making it a great place to search for and apply to scholarships.
3. Chegg.com: Chegg is well-known for its textbook rental service and homework help, but it’s also a great resource for scholarships. Chegg offers over 25,000 scholarships and tutors to help review your scholarship essays before you submit them.
4. Fastweb.com: Fastweb has over 1.5 million scholarships in its database and will send you personalized application recommendations based on your profile. The platform will even email you when deadlines are approaching so you don’t miss any opportunities.
5. Niche.com: Niche.com is known for providing insight on colleges and universities from over 140 million real reviews and ratings. However, the site also offers a wide variety of scholarships, using a similar matching process as other platforms.
6. Cappex.com: Cappex database holds over $11 billion in scholarship opportunities and allows you to narrow your search based on a variety of factors.

#5: Apply for Financial Aid

If you are an independent student, you do not need your parents’ information to apply for federal student aid through the FAFSA. If you are a dependent student, however, you will need your parents’ information to complete the form.

Dependent vs Independent Student

For financial aid purposes, you are considered an independent student if you are at least one of the following:

• At least 24 years old
• A graduate/professional student
• An orphan or ward of the court
• An emancipated minor
• Married
• Someone who is homeless or at risk of being homeless
• Have legal dependents (children)
• Have a dependency override from a financial aid administrator with proper documentation

If you are at least one of the above, you are considered an independent student. To see what federal financial aid you qualify for, complete the FAFSA.

If you do not identify with any of the above, you are considered a dependent student. If able, you should complete the FAFSA with your parents’ information. You will need information such as:

• Social Security Numbers
• Tax information
• Family income information
• Records of untaxed income
• Information on any financial assets you or your parents may have

If you are considered a dependent but obtaining that information from your parents is not possible for whatever reason, you should consider filing for a dependency override. A dependency override allows you to file as an independent despite being considered a dependent by the above criteria. You can file a dependency override for the following reasons:

• An abusive family environment (ie. sexual, mental, physical, or other forms of domestic violence)
• Abandonment by parents
• Incarceration or institutionalization of both parents
• Parents lacking the mental or physical capacity to raise a child
• Parents cannot be located
• Unsuitable household (ie. child is removed from the home and placed in foster care)
• A married student’s spouse dies or gets divorced

Filling out the FAFSA can provide you with access to thousands of dollars in financial aid. Make sure to complete the form as soon as you can after the October 1st open date.

#6: Compare Aid Offers Carefully

Without financial support from your parents, finding an affordable school will likely be a top priority. So, when you receive financial aid packages from each school, be sure to compare the aid offers carefully. 

Start by writing down the following information for each school:

1. The cost of attendance
2. The free aid you won’t have to pay back (ie. scholarships, grants, etc.)
3. The cost to attend after subtracting the free aid
4. The aid you would have to pay back (ie. any federal student loans you were offered and any private student loans you would need to take out)

For example, let’s say you applied to the University of Connecticut, Eastern Connecticut State University, and the University of Bridgeport as an in-state student. You also won $6,000 total in private scholarships — one $5,000 scholarship and one $1,000 scholarship. Comparing aid offers may may look like:

Comparing the offers side-by-side will allow you to see which school is most affordable. In this example, you can see that while the University of Bridgeport offered more scholarship money than Eastern Connecticut State University, the difference in tuition still makes ESCU more affordable. Make sure to compare your aid offers carefully to determine which school is best for you financially.

#7: Don’t Be Afraid to Ask For More

It never hurts to ask for more financial aid, especially if your parents are claiming you as a dependent student but not helping you pay for college.

To appeal your financial aid, simply submit a financial aid appeal letter to the school’s financial aid office. Make sure to address the financial aid director by name, be polite, and provide appropriate documentation. You can use a financial aid appeal letter template to craft your letter.

#8: Use Savings First 

When it comes time to actually confront the bill, dip into your savings first only if you have an emergency savings set up.

Most financial professionals recommend an emergency savings that is at least 3 months of your typical expenses. So, if you know you typically spend around $1,500 per month, you’ll want to have an emergency savings of $4,500.

While putting some of your savings towards your college education is helpful, you should not do so at the expense of putting yourself in an unstable financial situation. If you do have savings, however, consider putting what you can towards your tuition bill.

#9: Consider Student Loans

While helpful, student loans should be somewhat of a last resort as you will have to pay them back with interest.

First, look at the federal student loans offered to you in your financial aid package. Federal student loans will typically have lower interest rates than private student loans as well as more flexible repayment terms.

If you were not offered federal student loans, or if federal student loans do not cover your remaining balance, consider private student loans. If you are applying without a cosigner, you will likely need a strong credit score to qualify on your own. If you don’t have a strong credit score, consider non-cosigned loan options.

The most efficient way to find a student loan option that you qualify for is to use Sparrow. Sparrow allows you to compare loan options from 15+ premier student lenders in one place. This allows you to rest assured knowing you found the best loan option available to you.

#10: Get a Part-Time Job or Side Hustle During School

Picking up a part-time job or side hustle can help you pay for college expenses such as books and other course supplies during the school year. Depending on how much you’re able to bring in, you may be able to pocket some of the money to pay for the following year’s tuition. Reach out to your school’s office of student employment to inquire about on-campus positions, or consider off-campus positions that may pay more.

#11: Ask for Help

Paying for college without your parents’ help may be overwhelming, but know that there are resources available to help. If at any point you feel confused about the next step or how to handle a certain aspect, ask for help.

Becoming a dentist has a variety of benefits, but getting there can be quite expensive. A 4-year dental school program could run you about $400,000 with all expenses included. That’s why it’s essential to understand how to best pay for dental school

The return on investment with a dental degree is promising, with the average dentist making around $155,000 per year. So, while expensive, pursuing a dental degree is worthwhile. Regardless of your career goals or projected outcomes, financing your dental degree can still be overwhelming. There are four main strategies you’ll want to know about when it comes to knowing how to pay for dental school.

#1: Scholarships & Grants

Regardless of what type of degree you’re paying for, scholarships and grants should always be your first priority. Scholarships and grants are a form of free money, meaning you aren’t responsible for paying them back.

Both scholarships and grants for dental school can come from a variety of sources and vary in amount.

Scholarships for Dental School

Dental school scholarships can come from internal or external sources. Internal scholarships are awarded by your dental program, while external scholarships are awarded by private, professional, or non-profit organizations. The amount you receive in a scholarship will depend on who is providing the scholarship.

For example, the ADEA Crest Oral-B Scholarship awards recipients a one-time stipend of $3,000, while the Chinese American Medical Society awards recipients a $5,000 stipend each year they are accepted.

>> MORE: What are the four different types of financial aid for students?

How to Get a Scholarship to pay for Dental School

The eligibility for scholarships will vary depending on the scholarship provider. In general, you must:

• Be enrolled in an eligible program. Most scholarship programs require you to be enrolled in an accredited, four-year dental program. If you are unsure whether your program is eligible, check with the scholarship provider.
• Demonstrate academic or professional achievement. Scholarship programs will typically require applicants to excel in a specific area, have a special interest, or belong to a specific group. For example, many scholarship programs provide awards to students of certain minority groups, students with a certain GPA, or students who demonstrate financial need. To be a competitive applicant for any scholarship, you should aim to have an array of academic and extracurricular experiences.
• Have a solid GPA. While some dental scholarship programs will not require you to report your GPA, many will. A 3.0 GPA is typically the minimum to qualify, however, there are scholarships that award students with lower GPAs. To be a competitive applicant, you will want to aim for a GPA of 3.5 or higher.

>> MORE: Finding a scholarship to help you pay for dental school

Where to Find Dental School Scholarships

Internal dental scholarships will typically appear on your financial aid package when you are accepted to a dental school. However, you should always check in with your school’s financial aid office to inquire about any additional scholarships you may be eligible for.

For external scholarships, you’ll want to focus your search on professional organizations and scholarship search engines. Organizations such as the American Dental Association provide an array of scholarships for dental students. Scholarship search engines such as Scholarships.com, Sallie Mae’s Scholarship Search Tool, and Bold.org are all great options for exploring thousands of dental scholarships in just a few clicks.

Can I Get a Full Ride Scholarship for Dental School?

Full ride scholarships do exist for dental school, however, they are typically significantly more competitive, and thus, harder to receive.

While you can rack up a significant amount in dental scholarships, it typically won’t be enough to cover your tuition entirely. On average, dental school tuition ranges from $53,000 to $70,000 per year, totaling to roughly $200,000 to $280,000 over the course of a standard four-year dental degree. While entirely possible, securing enough scholarship money to cover $200,000+ in tuition may prove to be challenging.

Grants for Dental School

Similar to scholarships, dental grants can come from a variety of sources, but they typically come from your state, your university, or professional organizations. Eligibility for grants is typically based on your financial need, often determined by the information submitted on  your FAFSA application

State Grants

State grants are an incredibly underrated resource for free money. Nearly all 50 U.S. states offer grants to students in various programs. To check your eligibility for state grants, fill out the FAFSA, then check your state website. Many states will require you to have submitted the FAFSA to be eligible.

University Grants

Many dental programs offer grants for enrolled students. So, to see which university grants may be available to you, talk to your school’s financial aid office. There may be grant programs that require an additional application beyond the FAFSA.

Professional Organization Grants

Whether a professional organization offers a scholarship or a grant is truly a semantic matter. Some professional organizations will refer to the awards as scholarships, while others will refer to them as grants. So, in your search, be sure to search for both keywords so you don’t miss an opportunity for free money.

>> MORE: Best grants for graduate school

#2: Service Programs

After pursuing all scholarship and grant options, you’ll want to look into service programs (if they interest you). A service program will provide you with financial aid in exchange for service work.

Most service programs will require you to commit to serving a specific community for a set amount of time, often providing dental care to people without access. For example, the National Health Service Corps Scholarship service program requires recipients to complete service work for 1-2 years to receive funding. The Health Professions Scholarship Program, on the other hand, covers all tuition and fees and provides a living stipend, but requires recipients to be serving in the military.

If completing a service program sounds interesting to you, it’s worth checking out and submitting applications where you see fit. Be aware, though, that if at any point you decide to withdraw from a service program, your financial aid from the program will be revoked.

#3: Federal Work-Study

Work-study is a federal aid program that provides part-time jobs to undergraduate and graduate students who demonstrate financial need. Federal work-study funds are not awarded upfront, but rather, given in exchange for worked hours throughout the duration of your program. Because of this, work-study is considered “earned money” and should be accepted after all free money options have been exhausted.

>> MORE: What is a work-study?

Is Work-Study Available for Dental Students?

Federal work-study is available to dental students at schools that decide to participate. Due to the rigor of dental school, some schools may decide not to participate in the federal work-study program. If your school does not offer work-study, we recommend exploring part-time jobs that offer tuition assistance.

How Do You Get Work-Study for Dental School?

To be eligible for work-study, you must complete the FAFSA and demonstrate financial need. Then, if you receive work-study aid, you will see the aid offer in your financial aid package at each school you are accepted to.

>> MORE: How to fill out the FAFSA

How Much Can You Get in Federal Work-Study?

Jobs within the work-study program must pay at least $7.25 per hour, per federal regulations. Although, if the state’s minimum wage is higher, schools must pay that minimum wage. According to a 2020 report by Sallie Mae, the average work-study award was around $1,847 for students with an eligible job.

#4: Student Loans

After pursuing all free money and earned money options, you should consider taking out a student loan. Student loans, regardless of type, are a form of borrowed money. You will be responsible for paying the money back over time, typically with interest. This means that you will likely pay more than what you initially borrowed by the time you pay off your loan(s) completely.

When figuring out how to pay for dental school through a student loan, you will have two main options: federal and private loans.

>> MORE: How to apply for private student loans

Federal Student Loans

As a dental student, you will be eligible for two types of federal student loans: Direct Unsubsidized Loans and Direct PLUS Loans. Unlike in undergrad, you are ineligible for Direct Subsidized Loans as a dental student.

Federal Loan Borrowing Limits for Dental School

Direct Unsubsidized Loans have a maximum borrowing limit of $20,500 per year, with a lifetime limit of $138,500. Direct PLUS Loans, however, have a more flexible borrowing limit, allowing you to borrow up to the cost of attendance minus other aid.

How to Get Federal Loans to pay for Dental School

To borrow Direct Unsubsidized or Direct PLUS Loans, you must complete the FAFSA and be considered eligible. You may only be eligible for a certain amount of each depending on your level of financial need or overall borrower profile.

You will not need a cosigner for Direct Unsubsidized Loans, however, you may need an endorser for Direct PLUS Loans depending on your credit history.

>> MORE: Student loan eligibility: Private and federal student loans

Private Student Loans

Private student loans are provided by private entities such as financial institutions and banks. Each private lender will have their own unique eligibility requirements, interest rates, and borrowing limits.

In general, to secure a private student loan to pay for dental school, you must:

1. Be a U.S. citizen, permanent resident, or eligible noncitizen
2. Have a solid credit score (or a cosigner with a solid credit score)
3. Be enrolled in an eligible dental program
4. Have a debt-to-income ratio of 65% or less
5. Not have declared bankruptcy in the last 7 years

Private Loan Borrowing Limits for Dental School

Most private lenders will allow you to borrow anywhere from $5,000 to the total cost of attendance at your dental program. So, if your program costs $250,000 total, private loans will likely cover the entire cost. Some lenders do have minimum borrowing requirements, typically $5,000 or $10,000. If you plan to borrow less than $5,000 for dental school, you will need to find a lender with a more flexible borrowing minimum.

Best Student Loans for Dental School

The best private graduate student loan will ultimately be the one that works best for you. Rather than searching for lenders one-by-one, we recommend starting the process with an automated student loan search tool. With the free Sparrow application, you can see the rates and terms you’d qualify for with 17+ premier lenders.

>> MORE: Best private student loans for dental school:

Arkansas Student Loan Authority (ASLA)

ASLA is an Arkansas state entity that provides educational funding for all Arkansas students who wish to attend higher education institutions. ASLA is a great option if you are from or studying in Arkansas.

Ascent – Cosigned Loans & Non-Cosigned Loans

Ascent is an online lender that offers three types of student loans: a traditional cosigned loan, a non-cosigned credit-based loan, and a non-cosigned outcomes-based loan. Collectively, the three options provide a great selection if you don’t have a cosigner available, are an international or DACA student, or have a lower credit score.

Brazos

Brazos is a non-profit lender offering educational funding to Texas residents. They are a great option if you live in Texas, have strong credit, and want competitive interest rates.

College Ave Student Loans

College Ave’s student loan offers educational funding for undergraduate, graduate, professional, and career school students, and parents of students. It’s a great option if you are seeking a more flexible repayment term that allows you to find a loan that matches your budget.

Earnest

Earnest’s student loans provide funding that’s available to undergraduate, graduate, and professional students. They’re a great option if you are seeking competitive interest rates, unique borrower perks, and flexible repayment options that allow you to find a loan that matches your budget.

LendKey

By connecting borrowers with a network of 100+ lesser-known credit unions and community banks, LendKey allows you to work with smaller lenders with low rates and good customer service, rather than traditional lending institutions. It’s best if you have strong credit and want generous cosigner release and forbearance policies.

MPOWER

MPOWER is an online lender that offers educational funding to international, domestic, and DACA students. They offer non-cosigned undergraduate and graduate student loans. It is best if you are an international or DACA student who doesn’t have a credit history and can’t access a qualified cosigner. 

Prodigy Finance

Prodigy Finance is an online lender that provides funding to international students. They offer non-cosigned graduate student loans. They’re a good option if you are an international student who doesn’t have a credit history and can’t access a qualified cosigner. 

Sallie Mae

Sallie Mae offers cosigned and non-cosigned undergraduate, graduate, and career training student loans. They’re a good option if you’re seeking competitive interest rates and have a creditworthy cosigner. 

SoFi

SoFi offers educational funding to undergraduate, graduate, law, and MBA students, and parents of students. With competitive interest rates, a diverse set of repayment options, and exclusive member benefits, SoFi is a good fit if you have a strong credit score or a creditworthy cosigner.

What is the Interest Rate on Dental School Loans?

The interest rate you receive on dental school loans depends largely on whether the loan is federal or private. Federal loans have fixed interest rates that are the same across all borrowers. As of May 2022, the interest rate on Direct Unsubsidized Loans is 5.28%, and the interest rate on Direct PLUS Loans is 6.28%.

Private student loans will have either a fixed or variable interest rate. Because each lender is its own unique entity, interest rates will vary between them. Sparrow partners with 15+ lenders, with interest rates ranging from 0.94% to 14.52%. To check your eligibility across lenders and see what interest rates you would qualify for, complete the Sparrow application.

Final Thoughts from the Nest

Being a dentist can be an incredibly lucrative career. Getting there, however, can be an expensive journey. Understanding how to pay for dental school is a crucial first step in setting yourself up for a successful dental career.

Sparrow’s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

According to the Law School Admission Council, a law degree can cost upwards of $150,000. While there are more affordable law programs, it isn’t uncommon for law school graduates to end up in a fair amount of student debt. If you’re headed to law school any time soon, the reality of how much it costs may be setting in…hard.

Before you let this number consume your mind, know that there are a variety of ways to pay for law school. Here’s how you can do it.

#1: Scholarships

Scholarships are a form of free money because they don’t need to be paid back. So, the more scholarships you can rack up, the better.

Where Can I Find Scholarships for Law School?

Law school scholarships can come from various sources such as professional organizations, your university, the Law School Admission Council, and search engines.

Professional Organizations

Professional organizations are typically focused on furthering the development of individuals within their industry. So, many professional organizations offer scholarships to students pursuing a degree in their field. Organizations such as the American Bar Association and the National Bar Association both offer compelling scholarships options for law school students.

Your University

Universities also tend to offer a hefty amount of scholarship money. While most scholarships are merit-based, some university scholarships may require you to meet a certain level of financial need. Sometimes, your university will automatically award you a scholarship upon acceptance. Other times, you may need to reach out to your school’s financial aid office to see what scholarships are available to you. 

The Law School Admission Council

The Law School Admission Council (LSAC) website has a frequently-updated list of reputable law school scholarships, with many designed specifically for marginalized students. With over twenty scholarships on the list, LSAC is a great source for trustworthy scholarship programs.

Search Engines

Scholarship search engines will allow you to refine your scholarship search a bit more than the other options. Sites like Sallie Mae’s Scholarship Search Tool and Bold.org’s Scholarship Search Engine allow you to filter your search based on a variety of factors such as your year in school, your interests, your LSAT score, and more. This allows you to find scholarships that match your unique qualifications, which increases your chances of winning the scholarship once you apply.

What LSAT Score Do I Need to Get a Scholarship?

Generally speaking, you’ll need an LSAT score of 165 or higher to be a competitive applicant for most law scholarships. That said, there are a variety of law scholarships catering to applicants with lower LSAT scores.

#2: Grants

Grants are another form of free money, so you’ll want to maximize how much you can receive in these, too. That said, grants are almost always need-based, so they won’t be accessible to every law school student. 

If you do demonstrate financial need, there are a few main places you’ll want to look for grants.

University Grants

University grants are similar in nature to university scholarships, except they’re typically based on financial need rather than merit. If you receive a grant from your university, you’ll usually see it on your financial aid package. That said, your university may have grant programs that require a separate application. Reach out to your school’s financial aid office to inquire about any grant programs they may offer.

Private Grants

Private grants are offered by private institutions such as nonprofit organizations, professional organizations, and businesses. To secure a private grant for law school, you will typically need to submit an application with each individual organization that may require your transcript, an essay, and your FAFSA application. Because each private organization is its own unique entity, they may have different eligibility or application requirements.

The Law School Admission Council, for example, offers a variety of private grants such as pipeline grants, grants for underrepresented groups, and outreach grants.

Can Pell Grants be Used for Law School?

Unfortunately, Pell Grants cannot be used for law school. The Pell Grant is an award given to undergraduate students.

#3: Work-Study

Work-study is a form of need-based financial aid that is considered earned money. While you may be awarded a specific amount in work-study, you’ll need to complete a work-study job to receive that money. 

Due to the caliber of law school, many universities do not participate in the work-study program or limit the number of work-study hours a first-year student can complete. For second- and third-year law students, universities typically limit work-study employment to 20 hours per week.

Because work-study requires you to complete working hours to receive it, you won’t be able to use work-study funds to cover tuition expenses up front. However, a work-study role can help you cover living expenses while in school.

If you’re attending law school part-time while working, always check with your employer to see if they offer tuition assistance programs to help fund your law school education. If not, it may be worthwhile to explore other part-time employment opportunities that offer tuition assistance or programs to cover education expenses.

#4: Loans

After pursuing all free money and earned money options, you may need to explore borrowed money options to cover that last bit of tuition. In general, law school loans come in two forms: federal and private.

Federal Student Loans

To be eligible for federal student loans, you will need to submit the Free Application for Federal Student Aid (FAFSA). As a law school student, you are eligible for two types of federal loans: Direct Unsubsidized and PLUS Loans. 

With Direct Unsubsidized Loans, you are eligible to borrow up to $20,500 per academic year. There is a lifetime borrowing limit of $138,500.

With Direct PLUS Loans, you are eligible to borrow up to the cost of attendance minus other aid you’ve received. There is no lifetime limit for Direct PLUS Loans. You will, however, need to pass an adverse credit check to be able to borrow Direct PLUS Loans.

Private Student Loans

To borrow a private student loan, you will need to submit an application with the lender of your choice. To see what rates you would qualify for with several lenders at once, complete the Sparrow application.

How Much Can I Borrow in Law School Loans?

The amount you can borrow in private student loans will depend on the individual lender’s borrowing limits. Annually, most private lenders will allow you to borrow up to the cost of attendance at your law school minus other aid you’ve received. 

Some lenders will have lifetime borrowing limits, which limit how much you can borrow cumulatively. For example, some lenders have a lifetime borrowing limit of $500,000. Note that this limit may include undergraduate loans as well. So, if you previously borrowed a loan to fund your undergraduate academic career, that loan amount may count towards your overall borrowing limit if you plan to use the same lender for law school loans. 

What Do I Need to Qualify for a Private Student Loan for Law School?

Each private lender will have its own unique set of borrower eligibility criteria. In general, you’ll need to:

1. Be a U.S. citizen, permanent resident, or eligible non-citizen
2. Be enrolled in an eligible program at least half-time
3. Have a solid credit score, or a cosigner with a solid credit score
4. Have a steady income, or a cosigner with a steady income

What Can I Use Law School Loans For?

Both federal and private student loans will cover traditional law school expenses such as tuition, room and board, and fees. Private student loans, however, can cover a wider array of expenses including the bar exam. Some private lenders offer a specific bar exam loan designed to cover all bar exam expenses, from the actual exam cost to living expenses during your exam prep.

Best Student Loans for Law School

While there are a variety of lenders ready to help you cover the cost of law school, the following are our top picks.

Arkansas Student Loan Authority

The Arkansas Student Loan Authority (ASLA) is an Arkansas state entity that provides educational funding for all Arkansas students who wish to attend higher education institutions. ASLA is a great option for law students either from Arkansas or pursuing a degree in Arkansas.

Ascent – Cosigned Loans & Non-Cosigned Loans

Ascent is an online lender that offers educational funding for students. They offer three types of student loans: a traditional cosigned loan, a non-cosigned credit-based loan, and a non-cosigned outcomes-based loan. Collectively, the three options provide a great selection for law students who do not have a cosigner available, are international or DACA students, or have lower credit scores.

Brazos

Brazos is a non-profit lender offering educational funding through private student loans available only to Texas Residents. They offer a wide range of loan options, covering undergraduate, graduate, MBA, law, medical, dental, veterinary, and doctoral degree programs. Brazos is a great option if you live in Texas, have strong credit, and want competitive interest rates.

College Ave Student Loans

College Ave Student Loans offers educational funding for undergraduate, graduate, professional, and career school students, and parents of students. It’s a great option if you are seeking a more flexible repayment term that allows you to find a loan that matches your budget.

Earnest

Earnest’s student loans provide funding to undergraduate, graduate, and professional students. They’re a great option if you are seeking competitive interest rates, unique borrower perks, and flexible repayment options that allow you to find a loan that matches your budget.

LendKey

LendKey is an institution that offers educational funding to undergraduate and graduate students. By connecting borrowers with a network of 100+ lesser-known credit unions and community banks, LendKey allows you to work with smaller lenders with low rates and good customer service, rather than traditional lending institutions. It’s best for students with strong credit who want generous cosigner release and forbearance policies.

MPOWER

MPOWER is an online lender that offers educational funding to international, domestic, and DACA students. They offer non-cosigned undergraduate and graduate student loans. It is best for international students and DACA students who don’t have a credit history and can’t access a qualified cosigner. 

Prodigy Finance

Prodigy Finance is an online lender that provides funding to international students. They offer non-cosigned graduate student loans. They’re a good option for international students who don’t have a credit history and can’t access a qualified cosigner. 

Sallie Mae

Sallie Mae is an online lender that provides educational funding to students. They offer cosigned and non-cosigned undergraduate, graduate, and career training student loans. They’re a good option for students seeking competitive interest rates with a creditworthy cosigner. 

SoFi

SoFi offers educational funding to undergraduate, graduate, law, and MBA students, and parents of students. With competitive interest rates, a diverse set of repayment options, and exclusive member benefits, SoFi is a good fit for borrowers with a strong credit score or a creditworthy cosigner.

Final Thoughts from the Nest

Borrowing money to pay for law school is incredibly common. In fact, the vast majority of attorneys take on student debt to pay for their J.D. So while financing such an expensive degree may feel overwhelming, know that you’re not alone.

Begin the process by exploring scholarship and grant options, see if you qualify for work-study, then dive into the loan process as your last step.

Sparrow’s goal is to give you the tools and confidence you need to improve your finances. Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. While we make an effort to include the best deals available to the general public, we make no warranty that such information represents all available products.

Figuring out how to pay for college is like walking through a minefield. You’re scared to even take a step because it may be the wrong one. But you don’t have to be! There are 3 big resources people use to help them pay for college: scholarships, grants, and loans. Let’s go over them. 

What Are Scholarships?

Scholarships are usually merit-based awards, meaning that you are awarded based on your academic or extracurricular achievements. Private businesses and organizations normally give these out. Charities, non-profits, local Veterans clubs, local businesses, and big chains like McDonalds or Burger King are just some examples of places that offer scholarships. 

There are a wide variety of scholarships. Because of this, the qualifications for each one are going to be different. On the upside, you can win one for just about anything such as writing an essay, making a video, being into video games, being a person of color, and more. You can look for them online through scholarship databases like FastWeb or Scholarships.com.

What Can I Use a Scholarship For?

Scholarships don’t need to be paid back. The money is completely yours to use for school. It is important to note that there can be conditions when it comes to how the money is spent. Some scholarships will give you the money and let you decide how to allocate it. Others will require that the money only be used for room and board or your books.  

How to Apply to Scholarships

The variety in the different types of scholarships there are means that the application process is different for each one. Most of the time you’ll fill out an online form on their website. But, you may also need to write an essay or even do an interview. The details will be on their website, so, be sure to read and know the terms of the scholarship well. 

Important Note About Scholarships

Unfortunately, there are scammers out there. It’s important then to know how to spot a scam. Some signs include: 

• They ask for your social security number 
• They ask for money 
• They guarantee that you’ll win 

What Are Grants? 

Grants are need-based awards usually given out by the government and private organizations. Because they are need-based, students have to demonstrate that they have a financial need. 

Federal Grants 

There are only 4 types of federal grants: the Pell Grant, the Federal Supplemental Educational Opportunity Grant, the Iraq and Afghanistan Service Grant, and the Teacher Education Assistance for College and Higher Education Grant. Each of these grants has specific requirements that you must meet in order to qualify.

Generally, grants do not have to be repaid. Though, if you drop out or change your enrollment or financial status, you will have to pay them back. If that does end up being your case, your school will contact you with details on how to start repayment. 

To apply, fill out the FAFSA form every year as soon as it becomes available. 

Private Grants

Private grants function a little like scholarships. Different businesses, organizations, non-profits, and other places may offer these. Because of this, the qualifications for each one will vary. 

Grants also do not need to be repaid at all, so it’s good money to have for college. You can look for private grants online. Much like with scholarships, there are scammers. Keep in mind the same points about being able to tell the difference between a scholarship and a scam here, too. Details on each private grant’s application process will be on their website.

For more information on grants, feel free to read our article here. 

What Are Loans? 

A loan is money that you borrow. Unlike grants and scholarships, you will have to pay this money back with interest. There are both federal loans and private loans available. Depending on what type of loan you get, the terms will be different. 

Federal Loans

With federal loans, there are two basic types: subsidized and unsubsidized. Subsidized loans are need-based loans typically available for undergraduate students. They usually don’t accrue any interest until after you begin repayment. During that time, the government pays interest on the loan. Unsubsidized loans are generally for both undergraduate and graduate students. Since these are not based on financial need, they are more accessible. Unsubsidized loans usually start accruing interest from the moment it’s disbursed. So, if you receive one in your freshman year, it’ll start accruing interest that same year. 

Normally, federal student loan interest rates are fixed and predetermined. For both loans, repayment typically starts once you graduate or drop below half-time enrollment. The government will usually extend a six-month grace period at that time. This means you won’t have to start paying right away. The government offers different types of repayment plans and benefits to make this easier. For example, the income-based repayment plan will adjust your monthly payments based on your income to make it less of a financial strain on you. To apply for federal loans, all you need to do is fill out the FAFSA form as soon as it’s available each year. 

Private Loans

Private student loans function a bit differently from their federal counterparts. They’re usually given out by banks or some other financial institution. Unfortunately, they don’t come with as many benefits as federal student loans.

Qualifying for a loan will depend on your lender and your financial situation. Factors like your credit score, your finances, or whether or not you have a cosigner can impact whether you’re approved for the loan. This is because lenders want to make sure that they will get their money back. Those same factors can also determine what kind of an interest rate you get. Unlike federal student loans, interest rates for private student loans aren’t predetermined. They can either be fixed or variable and can vary anywhere from 1% to 13%+. 

The terms of repayment are up to the lender. Some may extend a six-month grace period so you don’t have to start paying right away. Others may not. Talk to your lender about the terms of repayment and see what else they offer.

Traditionally, you’d have to apply for each private student loan individually. This can be a hassle. Luckily, you don’t have to work like that anymore. Sparrow makes it easy to apply for private student loans by allowing you to compare real student loan offers through a single application. To get started, just create an account. 

For more information on loans, check our article here.

Which Is Better? 

Typically, you’ll want to try to get as many scholarships and grants as you can first since you don’t have to pay those back. Then, if you need more, get federal loans because they come with a lot of benefits and plans that’ll help make repayment easier. If you still need money after that, apply for private loans. 

Final Thoughts from the Nest 

Scholarships, grants, and loans are all great ways to help pay for college. Each one functions differently so it’s important to know the difference. Use this chart to help you as you start making decisions on how to fund your educational career! 

You may be wondering what the difference is between scholarships, grants, work-study programs, and loans. The four main types of financial aid differ in terms of structure and eligibility. Here is the basic information you need to know about the different types of financial aid:

The Basics: Comparing Financial Aid Options

• Scholarships: Financial aid you don’t need to pay back. Based on academic or other achievement.

• Grants: Financial aid (generally offered by the government) that you don’t need to pay back. Based on financial need or specific criteria (underrepresented demographics or specific academic interests).

• Work Study: Program that allows students to work part-time to earn money for educational expenses. Based on financial need and availability of positions.

• Loans: Borrowed money that must be repaid with interest. Based on lender and type of loan.

Which Type of Financial Aid is Best?

When considering financial aid offers, you may be comparing all of these types of aid at once. What we always recommend is accepting aid in the following order:

1. Scholarships and/or Grants (free money)
2. Work-Study (earned money)
3. Loans (borrowed money)

Scholarships and grants are the best option as they don’t need to be repaid. However, it’s unlikely that you’ll cover the entire cost of college with just scholarships and grants.

If offered work-study, it’s a great idea to accept that second. This money is earned, meaning that you don’t need to repay it over time.

Loans should always be accepted last, with federal loans accepted first before dipping into private loans. This is because private loans will need to be repaid with interest, which could rack up the principal balance quite a bit. Your eligibility and rates vary based on lender and type of loan. Find the best student loan rates.

Scholarships

Where Do Scholarships Come From?

Scholarships come from a variety of sources such as local organizations, charities, businesses, colleges and universities, the government, and various foundations.

Who is Eligible for Scholarships?

Eligibility for scholarships vary based on each scholarship’s specific criteria.

Some scholarships are strictly merit based, meaning that you don’t need to demonstrate any level of financial need to be considered. Others are strictly need-based and ask applicants to prove financial need in order to qualify.

That said, there are scholarships for nearly everything you could imagine. From the Asparagus Club Scholarship to the National Potato Council Scholarship, there’s something for everyone.

Each scholarship will require a different application process. Some may require you to complete an application or write an essay, and others may just require you to submit basic demographic information.

Grants

Grants are a similar type of financial aid to scholarships. They both typically don’t need to be repaid and they can come from a variety of sources. Oftentimes, when going through the college financial aid process, most students see grants come up when examining their federal aid.

So, while grants can come from your college or a local nonprofit, we’ll frame this section around federal grants as the non-federal grants don’t differ too much in nature from scholarships.

Where Do Grants Come From?

Federal grants come from the U.S. Department of Education in the following forms:

1. Federal Pell Grants
2. Federal Supplemental Educational Opportunity Grants (FSEOG)
3. Iraq and Afghanistan Service Grants
4. Teacher Education Assistance for College and Higher Education (TEACH) Grants

We won’t dive deep into each one because that could be its own blog in itself.

Who is Eligible for Grants?

Similar to scholarships, the eligibility requirements for grants vary for each specific one. While some non-federal grants may be awarded strictly for merit, almost all grants from the federal government require you to demonstrate some level of financial need.

There may also be things you need to do to maintain your eligibility if the grant is intended to be renewed every so often. For example, a grant that issues $5,000 per academic year for tuition costs may ask you to resubmit your financial information to determine whether you still demonstrate the financial need necessary to be eligible.

Work-Study

Work-study is a federal aid program that provides part-time jobs for undergraduate and graduate students with financial need. The money they earn from these jobs allows them to pay for educational expenses.

While qualifying for work-study does not guarantee a student a part-time job while in school, it does mean that there are federal funds dedicated to paying that student should they decide to participate in a work-study job.

Where Does Work-Study Come From?

Work-study is provided by the federal government via federal student aid. After filling out the FAFSA, students may see work-study as part of their financial aid package.

Who is Eligible for Work-Study?

To be eligible for this type of financial aid, you must first plan to enroll in a college or career program. Additionally, you must submit the FAFSA and demonstrate financial need.

Work-study is available to both part-time and full-time students, as well as undergraduate, graduate, and professional students.

Loans

The last type of financial aid is a loan. They are often referred to as “borrowed” money. With loans, you borrow an amount from a source and must pay it back over time with interest. Your eligibility and rates vary based on lender and type of loan. Discover the best loan option for you.

Where Do Loans Come From?

There are two main types of loans: federal and private loans.

Federal loans come from the federal government and generally have lower interest rates, better terms and conditions, and more flexible repayment plans.

Private student loans come from a private lender such as a bank or other financial institution. Private loans generally have higher interest rates, less favorable terms, and a less flexible repayment plan, however, they are valuable because they can fill in any gaps where the cost of attendance isn’t covered by other aid.

Who is Eligible for Loans?

Student loan eligibility varies based on your lender and type of loan. Submit one personalized form and find out what loans YOU qualify for in minutes.

A scholarship is a form of financial aid given to a student to support paying for their education. Scholarships are typically awarded based on academic or other achievement.

Scholarships come in a variety of sizes and structures. For example, some scholarships may award students $100 to pay for books while others may award $10,000 for tuition costs. Sometimes scholarships are one-time checks, and other times they provide funds on a more consistent basis.

Scholarships, unlike loans, do not need to be repaid. However, it is always important to read the fine print when accepting a scholarship. Some scholarship programs require additional work, engagement with the program, or service after the program concludes.

Summary

This was a LOT. *virtual high-five for getting to the end of this*

It may be overwhelming attempting to absorb all of this information about the various financial aid options. The good thing is that there are various options. Of course, start with seeking out scholarships and move up the ladder until private loans are the remaining option.

And when/if you do get there, know that we’ve got your back here at Sparrow, where you can compare loan rates in the click of a button!