Learn about the repayment obligations linked to FAFSA financial aid, including loans, grants, and work-study programs. Understand how repayment terms differ for student and parent loans, and how to interpret your financial aid package after submitting FAFSA. Get informed before making decisions about your educational funding options.

Assistance for higher education significantly reduces students' financial burdens, but it's essential to understand that not all aid is free. Different types of aid include grants, work-study, and loans. Grants and scholarships are non-repayable, while loans must be paid back with interest. Work-study funds are earned through work and do not require repayment.

Loans can originate from students or parents, each with unique repayment terms. Parent loans often start accruing interest immediately and require quick repayment, whereas student loans typically delay interest accumulation until after graduation, with repayment commencing later.

Once FAFSA is submitted, students receive a Student Aid Report (SAR), aiding colleges in creating an award package that details the funding and loan options available. Students can accept or decline these options to customize their financial plan.

Note: This content is based on research, expert insights, and data sources. Financial situations may change, making some information outdated. We advise consulting a financial expert before making decisions based on this article.