Within a financial award letter you can expect to see up to three different types of need-based and non-need based aid. The first is need based grants and/or scholarships, which do not need to be repaid. Grants, can consist of federal (e.g. Pell), state and institutional.
You might be awarded a subsidized Stafford loan or Perkins loan which are both need based. These loans are federally subsidized which means the federal government will pay the interest while the student is in school. Re-payment begins 6 months after your education is finished for Stafford loans and 9 months for Perkins. If the students’ attendance falls beneath half-time, re-payment will begin.
There are limits on the amount of the combined subsidized and unsubsidized Stafford loans. For example, for dependent students the loan limit for their first year is $5,500, $6,500 for second year and $7,500 for remaining years. However, subsidized amounts are capped at $3,500, $4,500 and $5,500 for first, second year and remaining years, respectively. Students must attend school at least half-time. to receive Stafford loans. For independent students, loan limits are significantly higher.