Financial Aid Basics

Most people need some type of financial aid in order to pay for college. There are several types of aid available, which differ in how they are awarded and paid back:

• Grants
• Scholarships
• Federal Work-Study
• Federal Student Loans

Federal Tax Benefits

There are a number of tax benefits available to offset the cost of education.

• Federal Tax Credits. Tax credits directly reduce the federal taxes you owe. For example, if you owe taxes at tax time, a credit is a dollar-for-dollar reduction of the amount you owe.
• Federal and State Tax Deductions. These benefits reduce your taxable income. By reducing your taxable income, a deduction may also reduce the taxes you owe.

Public Service Loan Forgiveness (PSLF)

The Public Service Loan Forgiveness Program was created to encourage individuals to enter and continue to work full-time in public service jobs. Under this program, you may qualify for forgiveness of the remaining balance due on your eligible federal student loans after you have made 120 payments on loans under certain repayment plans while employed full time by certain public service employers.