Loans are available from a number of sources, though primarily from the federal or state government. Grants are often offered through the government but may also come from private sources and/or the colleges themselves. Scholarships tend to vary the most in their conditions for eligibility and the amounts awarded. Although there are other means of acquiring funding for college, these three comprise the bulk of financial aid awarded to incoming or already enrolled students each year.
Student loans are perhaps the easiest type of financial aid to acquire. Awarded by the government through various lending agencies, there are almost no academic requirements and minimum financial requirements. Scholarships do not require repayment, but unlike loans they have a wide variety of eligibility requirements. The amounts awarded can be small or large enough to defray the majority of a student's expenses. Grants fall somewhere in between these two. Like scholarships, they do not need to be repaid, but like loans, the most common source for grants is the government. Requirements for grants vary, but a number of them are based on financial need.
The general purpose of financial aid is to help take away some of the immediate financial burden of higher education. With the exception of loans and some need-based grants, financial aid sources are often targeted to a specific cost, such as paying for books, fees or tuition. Others are targeted at specific groups, such as athletic, academic or minority-based scholarships.These are designed to reward students who meet specific criteria or exhibit a particular athletic or academic skill.
Most financial aid sources, regardless of type, are not designed to fully cover educational expenses in a single award, though some do offer a "full ride" by paying for all of a student's costs while at school. These types of scholarships are rare, highly competitive and often offer full coverage only for academic expenses and not other costs such as room and board. Also, they tend to come with specific requirements, often in the form of after-graduation obligation, such as the military scholarships which mandate service in the Armed Forces. Student loans can also be taken out to cover the majority of costs, but these must be repaid post-graduation, and may in the long term actually cost more once additional expenses such as interest charges are applied.
No single source of financial aid is likely to cover all the costs of going to college. Even scholarships which offer a "full ride" that includes room and board may fail to cover the expense of books. Most of those also have caps on how much money can be given out, or are limited to a time-frame that is less than the full 4 years required to obtain a degree. As such, the savvy student will do well to seek help from as many sources as possible. A combination of scholarships, grants and loans--as well as the other types of financial aid such as work-study--is the best way to reduce the cost of higher education, not only for undergraduate degrees but all the way through graduate and professional studies as well.