College Application- Student Loans

College is an investment and like any other investment, you want to have the highest return on invested capital which is only possible if your invested capital is low; the goal is to pay as little as possible for college!

Applying for financial aid is one solution to solving that problem. Most public and private institutions will either offer a loan or reward you with money or benefits. The main difference between these two is that with a loan, you must repay the initial balance with added interest whereas when you’re given money through scholarships and grants, you do not have to repay it.

What is a student loan?

It is incredibly important to read the fine prints on these loan offers and make sure to have a comprehensive understanding of their terms and conditions. If not read properly, you may be swimming in debt due to perpetual interest rates. These loans can be offered by a variety of public (federal government) and private institutions (banks, organizations, companies, etc). Federal student loans tend to have better benefits and lower interest rates. Additionally, they are more lenient with postponement and repayment options.

What types of federal student loans are available?

In the case of federal student loans, the government or more specifically the US Department of Education is your lender. The program offers 4 separate types of loans:

1. Direct Subsidized Loans

For eligible undergraduate students who display a financial need

2. Direct Unsubsidized Loans

Eligibility is not based on financial need and accessible to undergraduate, graduate and professional students

3. Direct PLUS Loans

For graduate, professional students, or parents dependent on undergraduate students and eligibility is based on credit check rather than financial need

4. Direct Consolidation Loans

Allows you to combine all your federal student loans into a single loan with a single loan servicer

Now there are other forms of financial aid that don't have to be paid back after a certain period. These include grants, scholarships, work-study jobs, and ROTC stipends.


A grant is funding provided by a government department, corporation, foundation or trust based on a clear showing of financial need. A variety of federal grants are available, including Pell Grants, Federal Supplemental Educational Opportunity Grants (FSEOG), Teacher Education Assistance for College and Higher Education (TEACH) Grants, and Iraq and Afghanistan Service Grants. The most common type of grant available for most students is the FAFSA application. The FAFSA application must be filled out every year of post-secondary schooling to continue to receive aid. Although the grants mentioned earlier are all supported by the federal government, grant opportunities from the private sector exist as well. These types of grants usually have stricter eligibility rules and higher competition as they’re a lot more limited.


Scholarships are another form of non-repayment aid that are often issued by private nonprofit organizations or corporations. Most scholarships are awarded on merit or talent rather than financial need and are greatly appreciated by college admission offices. Deadlines can immensely vary for scholarships as there are so many different kinds of ones and it’s important to keep a list to avoid missing any deadlines. Application process for scholarships tends to also be more laborious and very achievement and essay heavy. Examples of scholarships include sports scholarships, the National Merit Scholarship, Coca-Cola Scholars Program scholarship and more.

ROTC Stipends / GI Bill

ROTC Stipends are reserved for those that serve in the military for a minimum number of years and have shown exceptional academic success. It is available at over 1,000 colleges over the US and covers almost all of tuition for students. However, the amount of aid and duration of service does depend on the branch of military service that you decide to go into. The GI Bill is another form of aid that is for students that have either previously served in the military or have immediate family that did. They are offered assistance based on financial need and for tuition, housing, textbooks, and more.

College applications opened just a month ago and it’s incredibly important now more than ever-- due to Covid-- that you check your eligibility for financial aid based on your tax code and compile a list of potential grants and scholarships that you would like to apply to. For further information and the application forms, check out or The BAYFI Team wishes you all good luck in college applications!

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