Loans are available to help students pay for their educations. Loans for education can be grouped into three major categories: student loans, parent loans and alternative or private student loans. In addition to theses three categories, there is also the consolidation-education loan and recently added student loan instrument, peer-to-peer education loans. Starting in July of 2010, every new federal educational loan been come through the Direct Loan program. Through this program, loans are issued through the college's financial aid department with the money coming from the U.S. Department of Education.
Students who meet certain qualifications have the opportunity to receive a scholarship. Scholarships are financial resources that do not have to be paid back by the student. Each year there are numerous scholarships awarded by different sponsors that number in the thousands. For the most part, scholarships are reserved for students who meet specific requirements in academics, sports, or who possess a certain artistic talent. However, there are some scholarships available for students in certain areas of study, minority groups, students in certain locales, and for certain students with financial needs.
Military student aid is available for those who desire to become a part of the military or for veterans and their dependents. Resources such as the Montgomery GI Bill are one of the resources that are available for those enlisting in the Armed Services. However, the GI Bill only pays for just about 3/5 of the average cost of college tuition and around 1/3 of veterans eligible fail to use the educational benefits available to them. Information about the educational resources available through the military can be found on the Military.com website under education.
For those who chose to and are able to do so, there are college savings plans and prepaid tuition plans available. Both of these plans fall under the heading, section 529 plans, also known as Qualified Tuition Programs. Section 529 refers to section 529 of the Internal Revenue Code that makes the tuition plans exempt from federal income taxes. The benefits of prepaid tuition plans are that they allow students to lock in on the current tuition rate and typically are guaranteed by the state. College savings have greater flexibility but do not guarantee students a fixed tuition rate.
The U.S. government provides financial support for continuing education for qualifying college students through the Pell Grant Program. The Pell Grant offers financial support to undergraduates who fall in the low-income category and to certain post-baccalaureate students. The purpose of the Pell grant is to promote accessibility to continuing education at the post-secondary level. A Pell grant is similar to a scholarship in that it does not have to be repaid by the student, but it is based on financial need.