The following is a guest post provided by Jenn Pedde from the University of Southern California

Pell Grants, Stafford Loans, Perkins Loans — though they help you pay your way through school, the jumble of federal financial aid programs can be a bit too dense to understand. But considering that funding your post-secondary education may be one of the most important and expensive undertakings you commit to, understanding is necessary. We try and break it down on our MSW Financial Aid section of our website for our students, and we encourage you to share with your students as well.  If you are student, look for these resources on your school’s webpage!

Luckily, figuring this out doesn’t have to be a maze of numbers and esoteric terms. Here is a simple breakdown of the six most common kinds of financial aid provided by the U.S. government, what they mean to you and how they can work for you.

1. Federal Pell Grants

Named after U.S. Senator Claiborne Pell of Rhode Island, Pell Grants are need-based aid to low and middle-income students pursuing their first bachelor’s degree. Being grants, they do not need to be repaid. Maxing out at $5,550 (though recent legislation may reduce that to amount to $4,705), the amount awarded fluctuates according to cost of attendance and family finances. The largest source of federal grants to undergraduates, Pell Grants currently help about 5.4 million students attend school each year.

2. Federal Supplemental Educational Opportunity Grants

Federal Supplemental Educational Opportunity Grants (FSEOG) are similar to Pell Grants in that they are also need-based aid to low-income students seeking their first bachelor’s degree, but they differ in that a FSEOG is not awarded directly to students by the federal government, but by their attending academic institution. The federal government gives FSEOG funding to colleges and universities, who in turn divvy it out to students. Capped at $4,000 a year, the amount received by a student is determined by his or her college.

3. Leveraging Educational Assistance Partnership / Special LEAP Grants

Both the Leveraging Educational Assistance Partnership (LEAP) Grant and the Special LEAP (SLEAP) Grant are similar to other federal grants, except they provide federal funding to state governments, who then award the grants to students at their discretion. (If you recently took your SATs: LEAP/SLEAP are to state governments as the FSEOG is to academic institutions.) Capped at $5,000 per school year, both LEAP and SLEAP can take the form of either grants or work-study opportunities in community service.

4. Subsidized and Unsubsidized Direct Stafford Loans

Direct Stafford Loans are funds lent to students directly from the federal government and named after U.S. Senator Robert Stafford (hence the loan’s name). Though the loan is from the federal government, the amount is decided by the school. Because the loans are borrowed directly from the U.S. Treasury, Direct Stafford Loans typically have interest rates that are much lower than loans received from private banks. An additional bonus is that Direct Stafford Loans can be consolidated for more convenient payment and possibly even lower interest rates. Subsidized Direct Loans do not accrue interest while the student is enrolled, but are only available to those who demonstrate financial need. Unsubsidized Direct Stafford Loans, on the other hand, are not need-based but do begin collecting interest immediately. For a detailed breakdown on Stafford Loan interest rates and loan limits, visit the Federal Student Aid website.

5. Perkins Loans

Named after Representative Carl D. Perkins, the Perkins Loan is lent by the academic institution, though with funds from the federal government. Capped per year at $5,500 for undergraduate students and $8,000 for graduate students, the amount awarded is also determined by the attending school. Reserved for those in extreme financial need, the Perkins Loan is fixed at a low interest rate of only 5%. Cancellations of the loan are also possible through teaching at a high–needs school or volunteering in the Peace Corps.

6. Work-Study

Work–Study differs from other forms of financial aid as it is neither a grant nor a loan but a need-based employment opportunity with wages paid by the federal government. Funds for Work-Study are given by the federal government to schools, who administer the program, dictating both the hours and wages (though they must abide by federal minimum wage standards). Students involved in Work-Study typically work on-campus, though employment with non-profit organizations and (rarely) for-profit businesses are also possible.

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Applying to each of the programs listed above is as simple as filling out your Free Application for Federal Student Aid (FAFSA) — but don’t stop there: Other aid, such as subject-specific grants (like the Science & Mathematics Access to Retain Talent Grant and the Teacher Education Assistance for College and Higher Education Grant), state government aid and private scholarships are also available. Speak to your school’s financial aid office to determine all of the opportunities available to you.

Jenn Pedde is the community manager for the Masters in Social Work program at the University of Southern California.  She’s an avid traveler and enjoys photography. We are pleased to have her as a Contributor on CheapScholar.org