What happens when you run out of funds to continue your studies? Do you keep on going or simply give up, satisfied with what you’ve already achieved? One of the biggest obstacles to students studying further or continuing in their academic endeavours is funding – or a lack thereof. When initially accepted to their undergraduate program, most students only account for the three to five years it takes to obtain a bachelor’s degree.
But what happens when your university allows you to further your studies? Or you run out of funds before graduating? Financial aid is a useful and effective means to ensure the effort you’ve invested in your education so far doesn’t amount to nothing because of money.
In this blog, we explore the fundamentals of financial aid. We unpack how to apply for financial aid and look at the processes and eligibility requirements behind securing this crucial funding. We’ll also examine the differences between various financial assistance programs and discuss the tools and resources for comparing them.
Financial aid 101
So, what is financial aid? Financial aid, or financial assistance, refers to funding made available to students to assist with the many costs associated with post-secondary education. Financial aid comes in many forms. From private individuals and companies offering to fund selected students and schools offering scholarships and bursary programs to banks, agencies, institutions and federal government programs, the world of financial aid can be complex.
Why financial aid is so effective
Post-secondary education is prohibitively expensive for most people. Rising inflation, increasing competition, growing academic complexity, and limited spaces available for prospective students mean that studying at a top institution can cost tens of thousands of dollars. Add in living costs, secondary expenses like study materials and food, and many find securing their future beyond reach.
Thankfully, many private and public institutions recognize this and have made provisions for those unable to immediately afford their academic journey. These financial assistance programs are available to students worldwide and are designed to accommodate their unique needs and situations without overburdening them.
Financial aid eligibility
In the U.S. and Canada, citizens enjoy the benefits of many varied financial aid offerings and programs. However, for international students looking to further their education in North America, either for the first time or in the hope of remaining enrolled in school or university programs, financial assistance may be a little more difficult to come by. From eligibility restrictions to availability and access limitations, understanding which options are available to specific student categories and which aren’t matters – crucial when getting to the bottom of the “What is financial aid” question.
There’s more to financial aid than you know
Many students mistake financial aid for student loans only. This often leads to missing important differences between the types of financial assistance available. And while loans are frequently the most effective and useful tools in securing the funding students need to continue their academic journey, understanding financial aid means knowing which type of financial assistance a student needs.
What are the types of financial aid?
There are many different types of financial aid available. However, different countries offer different programs and options. This can make things confusing when exploring the best financial assistance available.
So, what are the types of financial aid on offer?
Grants
- What are they?
Grants are a form of financial aid offered to students based on their financial situation and needs. Typically, grants don’t need to be repaid, though a recipient may need to meet and maintain certain conditions. Grants are designed to cater to students who cannot afford to pay their study expenses. Various organizations and institutions offer student grants, including the federal government and various other agencies. Corporations and not-for-profit organizations also fund some grants.
- Am I eligible?
International students applying for financial aid grants in the U.S. or Canada may often find them in short supply. This is because many of these grant programs are geared towards helping domestic U.S. and Canadian citizens and give priority to them over their international counterparts. However, some institutions will consider applications from non-citizens if they can demonstrate urgent financial need. Some grants are only available to certain ethnic groups, study specialties or genders, like those offered by the American Association of University Women.
- Benefits and disadvantages of grants
Since grants don’t have to be repaid, they’re an attractive prospect for many students. But it is important to understand that most grants are conditional and will cease paying if terms are not followed. For example, if the recipient stops studying in the field for which the grant was allocated, the grant may be revoked. Grants are competitive, especially among non-U.S. and Canadian applicants.
Scholarships
- What are they?
The terms “scholarships” and “grants” are often used interchangeably, but grants tend to be needs-based, while scholarships are usually merit-based. This can be related to exceptional achievement, sports or simply owing to the candidates’ characteristics.
- Am I eligible?
Scholarships are seen as even more difficult to secure than grants and are awarded by a committee or board. It’s also important to note that some scholarship programs are reserved specifically for international students. A great example of this is the Fulbright Foreign Student Program.
- Pros and cons of scholarships
Scholarships are often far more comprehensive than typical financial aid programs and can cover expenses beyond the academic program. But scholarships may also have specific application requirements. It’s important to research a scholarship before you apply. You can look at some of the scholarships available through International Education and Financial Aid (IEFA) or via the International Scholarships register.
Loans
- What are they?
Loans are by far the most common and accessible of all types of financial aid. Also known as student or educational loans, this financial assistance is a legally binding agreement to borrow money from an organization or financial institution. Loans must be repaid, often with interest, and come in many different configurations to meet the different needs of students. Different options include: fixed and variable rates, in-school payment, cosigner and collateral, and post-graduation payment terms. Loans are an effective tool, especially for non-U.S. and Canadian students looking to study in North America because of their availability, high degree of flexibility and ability to cover educational costs over the course of the student’s program.
- Am I eligible?
Eligibility is dependent on the loan provider, and may consider the student’s previous academic achievements, prior credit history, the desired program/major, the school, and the requested loan amount. There are various types of loans available, structured to suit the specific needs of the student.
- Pros and cons of loans
Loans can cover significant portions of educational costs. They enable a student to continue their studies without having to have the funds to pay for their education upfront. But loans must be repaid with interest. Students should carefully consider loan options. Do your research and compare the different loan options available.
Other financial aid programs
There are many other, less common financial aid options available to students studying abroad, let’s take a quick look:
- Local options – Some countries offer their own financial aid programs to fund their citizens to study abroad in the U.S. and Canada. After students graduate, they’re expected to then return to their own countries and apply the skills and knowledge acquired. These programs can often be similar to grants, scholarships and even loans offered in the U.S. and Canada, but with different terms and requirements.
- Work-study programs – These innovative programs enable corporations and educational institutions to provide financial aid to students willing to work or contribute their time in exchange for financial assistance. This could be an internship while studying or a commitment to work upon graduation in exchange for financial aid. Some universities and schools offer financial aid in the form of work-study programs where students work part time on-campus to help pay their expenses.
- Sponsorships – Private individuals and corporations may offer partial or full sponsorships to students as a form of financial aid, agreeing to cover the costs of their studies with or without requirements attached. These sponsorships are offered through a variety of channels and can be viewed as an unofficial grant-type form of financial aid.
Tips for how to apply for financial aid
The processes and requirements to apply for different types of financial aid are always changing. Some programs only allow students to apply once, while others make provisions for repeated submissions. Some financial assistance options are limited to specific groups with select requirements, while other ones are open to everybody.
As a general rule, it’s always recommended to explore your financial assistance options as comprehensively as possible before embarking on your financial aid journey. Here are some tips and pointers:
- Do your research – The more you know about what’s available, the more control you have over finding the right financial aid option. Every day new and exciting opportunities arise that can change your academic ambitions in an instant. Spend time exploring the full spectrum of financial aid opportunities out there and make sure you don’t miss out on anything that may be perfect for you.
- Compile a list of potential financial aid avenues – Consider every financial assistance option on the table. Don’t ignore an opportunity simply because it doesn’t fit your current situation or needs. As your academic journey evolves, so too will your financial requirements. Keep an open mind.
- Think long-term – Financial aid can span many years, enabling you to study, graduate, and begin working before the time comes to fulfil your obligations. Consider your future and your plans when applying for financial aid. Don’t always commit to the quickest, shortest-term options. Like a good investment, your education will mature over time. Apply this mindset to your financial assistance thinking.
- Don’t get discouraged – You may sometimes think there are no grant or scholarship options available for you, that your academic journey is destined to come to an end. But with empowering options like loans and shifting eligibility metrics, you never know what the future has in store. You’ve come this far – don’t stop now.
How to start your financial aid journey
So, where do you begin to apply for financial aid, and how do you find a loan? With so many different financial loan options available to undergraduate and postgraduate students at top universities and schools, the search can be overwhelming, not to mention the risk of encountering financial aid scams. Start with International Student Loan’s Find My Loan comparison tool to easily and comprehensively search for a lender.Your financial aid journey starts today. Good luck!
