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Types of financial aid
There are four basic kinds of financial aid that can help you pay for college:
Scholarships. Scholarships are merit-based financial aid that recognize ability in the areas of academic achievement or athletic or artistic talent. The money awarded is a gift and does not have to be paid back. Some states give academic scholarships to outstanding students. Northwestern provides academic scholarships as well as merit scholarships. The latter are awarded to students who represent the college in athletics, art, music and/or theatre.
An additional source of scholarship money is the private sector. Your high school guidance counselor can help you explore all the options in this area. Check with your school district, companies and corporations, service clubs and your home church. Various websites can also help you in your search for this type of financial aid, such as FastWeb and Scholarships.com.
Grants. While scholarships are typically merit-based, grants are need-based. Like scholarships, grants are gifts that do not have to be repaid.
The federal government offers Pell Grants in varying amounts to students with financial need. Those who receive a Pell Grant may also qualify for a supplemental grant called the SEOG. Your expected family contribution must be $3,850 or less to qualify for a Pell or SEOG Grant.
If you’re from the state of Iowa, you may qualify for the Iowa Tuition Grant. The Iowa Tuition Grant is easier to get than a Pell Grant. Every student with an expected family contribution (EFC) of $12,000 or less receives an Iowa Tuition Grant of $4,000.
Northwestern College also provides grants of its own. The Northwestern Grant, for example, is available to both Iowa and out-of-state students with financial need.
Employment. For students who are willing to work to help meet some of their college expenses, Northwestern offers two employment programs. The first, federal work-study, is available only to students with financial need. For every dollar the student earns, a portion is subsidized by the government. Northwestern also provides jobs through its campus employment program. Financial need is not a requirement for this institutionally funded job program.
Loans. The final type of financial aid is the kind that must be repaid. Loans are available through the federal and state governments and through Northwestern College.
The federal government offers both the Perkins and Stafford Loans. The interest rate on a Perkins Loan is fixed at 5 percent. The Stafford Loan, available through your bank, has a fixed interest rate of 6.8 percent that changes every July 1. Both loans are deferred loans, meaning you make no payments and no interest accrues for as long as you’re in school and until six to nine months after you graduate. An Unsubsidized Stafford Loan—one in which interest is charged from the time the loan is awarded—is available to students with or without financial need. You'll make interest payments but have until six months after you finish school to start paying back the principal of what you borrowed. Also available are alternative educational loans for parents who need help financing the difference between financial aid and the total cost of attendance.
Another loan option is Northwestern’s Rotary Loan, which charges no interest until after graduation and then has a fixed rate of 7 percent.
Northwestern uses as many of the above options as possible in awarding financial aid. Your financial need is the gap between the cost of a Northwestern College education and your expected family contribution (determined by the Free Application for Federal Student Aid, or FAFSA). Our goal is to create a financial aid package that comes as close as possible to meeting your need.
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