Many students wonder how to decide between federal student grant vs loan.

After you file your FAFSA (Free Application for Federal Student Aid), you will receive a report outlining your EFC (Expected Family Contribution) and then your school will send you a financial aid award. On your award letter or notice, you may find student grants or even a student loan.

Your federal student aid can include a Pell grant which is money given to you to pay for school that does not have to be repaid. This type of grant is based on financial need. There are other types of grants that you may be eligible for as well, so it’s important to investigate.

The best part of a federal student grant is that grants are based on just your financial situation, not your credit, and the money doesn’t have to be paid back. On the other hand, your student financial aid may include a student loan. A federal student loan is backed by the federal government, so you do not have to have a credit history or good credit to get one. However, unlike grants, student loans must be repaid.

The interest rates on student loans are fairly low, but you should keep in mind that just like any other kind of loan or credit, the money has to be repaid with interest at some point. If you do have to take out student loans, one of the positive parts is that you won’t have to make payments until after you graduate or finish school, and most loans offer a grace period for you to get working before payments begin.

Federal student aid can include many different financial options. One option you may also want to consider is working part-time to help pay for school. You may also want to research and apply for scholarships to help cover your education costs. This can make a significant difference in the amount of student loans you may need to take out to help pay for your education.

Your aid package may make you wonder about federal student grant vs loan. If you are offered grants, be sure to complete any paperwork required so that you can receive them. Remember that many times there are more eligible students than funds available, so apply quickly. If you are offered loans, it can be a difficult decision to choose to accept them, so be sure to investigate all of your options first.