If the cost of college and graduate school seems to be rising as quickly as summer temperatures, it may be time to look into the funding sources that could help you finance your postsecondary education. To help families sort through the financial aid maze, Loan Experts page offers students and parents this quick guide to the types of financial aid options that are out there.

It starts with financial need.

    Financial aid can be classified into two main categories: need-based and non–need-based. Need-based aid is awarded on the basis of financial need, a federal determination of a student’s financial situation, using the financial information you provide each year on the FAFSA (Free Application for Federal Student Aid). Non–need-based aid is awarded without consideration given to a student’s financial situation. If you meet program eligibility requirements, you can qualify for non–need-based aid, regardless of your or your parents’ assets or income.

There is such a thing as free money.

    Scholarships and grants are a great way to help finance your college education because they provide money for school that you won’t have to pay back—it’s basically free money. Scholarships and grants can be either need-based or non–need-based.

    Federal Pell Grants are an example of need-based grants. Non–need-based scholarships and grants include merit-based awards. Some merit-based scholarships may be awarded automatically with your admission; others require you to complete an application process and compete against other applicants.

Federal student loans offer low-cost financial help.

    After grants and scholarships, federal student loans provide students and parents with a smart, economical financing option. Federal Stafford Loans for undergraduate and graduate students, Grad PLUS loans for graduate students, and PLUS loans for parents all feature low, fixed interest rates, flexible repayment options, no prepayment penalties and no application fees. Stafford loans don’t require a credit check or a co-signer. PLUS and Grad PLUS loans allow the borrower to take out up to 100% of the cost of attendance, less other financial aid received.

    These federal student loans are also all eligible for student loan consolidation. By consolidating your federal student loans, you could cut your monthly student loan payments almost in half. A Federal Student Loan Consolidation could also give you up to 20 more years to repay, with the added convenience of replacing multiple student loans and monthly bills with one easy-to-manage loan and a single monthly payment.

Private Student Loans can cover what other financial aid doesn’t.

    Private Student Loans are unsecured, credit-based student loans. These private student loans are non–need-based, so as long as you meet the eligibility requirements, you won’t be disqualified for you or your parents making too much money.

    A Private Student Loan can cover the difference between your cost of attendance (which includes education-related expenses like textbooks and an allowance for transportation to and from school) and the amount of other financial aid you received.

    Private Student Loans are available not only to undergraduate and graduate students, but also to continuing education students and the parents of K–12 students.

    Keep in mind that federal student loans usually have more attractive terms than private student loans, so you should always look into your federal financing options first.