Comparing the Pell Grant and Student Loans

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When starting college one of the first things that a student will need is a way to pay for their education. Many students will look at loans and grants for most of their college needs in terms of expenses, but they may not know what the differences can be and why one may be better for them than the other.

Pell Grants

Pell grants are a great place to start when looking at financing options for your post-secondary education. This is because they don't need to be paid back and are normally based on income rather than credit. A potential student that is not living with their family will likely qualify for this kind of a grant because only their income will be included in the processing. If the student lives at home still, the parents may have to add in their income for the process. This can make getting a grant harder for some students. The final Pell Grant amount you may be able to receive by way of this award for the 2010-11 school year is set at 5,500 dollars.

Student Loans

Student loans have there pros and cons as well. Student loans will need to be paid back to the loan company or bank that is issuing them. They also may be higher interest if the students credit is not perfect. Parents can cosign with the student to help keep the rates down, but that is not going to always happen. Some loans will also cover all college costs which can be a big help to the student. This means they can just worry about their grades and schooling till they are finished with college. That's when most loans will kick in for repayment.

Any student that is thinking about these two options may want to think about trying for both of them. Most students can get some kind of Pell Grant amount along with loans to help cover any other expenses that may come up. Students should remember to keep track of their loans so they don't become overwhelmed and end up farther in debt then they really wanted to be.