Kentucky Higher Education Assistance Authority
Financial Aid Tip of the Month
Like all subjects, student financial aid has its own set of terms. These explanations from the Kentucky Higher Education Assistance Authority (KHEAA) may help students and parents understand some of those terms.
Need-based aid is financial aid that students may receive because of their financial circumstances, while merit-based aid is based on a student’s talents. Those talents may be in academics, sports, music or some other field.
Scholarships may be need-based, merit-based or both. Grants tend to be need-based, like the Federal Pell Grant. As a general rule, students do not have to repay grants and scholarships.
Student loans, whether from the government, like the Federal Stafford Loan, or from a private lender, must be repaid. However, some government loans may be forgiven if borrowers work in certain fields.
Conversion scholarships are awards that do not have to repaid if the recipient fulfills an agreement that usually involves working in a certain field for a specified length of time, often in a particular area of the state or country. If the recipient does not fulfill the agreement, the scholarship converts to a loan that must be repaid with interest.
Work-study programs pay students to work either on or off campus while going to school. Students must be paid at least the minimum wage, but the number of hours they work may be restricted.
Institutional aid is financial aid provided by the school itself. It can include any of the types of financial aid described above.
Many schools require a separate application for institutional aid. Others rely on the Free Application for Federal Student Aid (FAFSA), which is used to apply for federal aid programs.
To find links to other useful education websites, go to www.gotocollege.ky.gov. For more information about Kentucky scholarships and grants, visit www.kheaa.com; write KHEAA, P.O. Box 798, Frankfort, KY 40602; or call 800-928-8926, ext. 6-7372.