Final answer:
The Perkins loan and subsidized Stafford loan are awarded based on a student's financial need. The unsubsidized Stafford loan is not need-based and accrues interest from the time it is disbursed. Completing the FAFSA is necessary to determine eligibility for these types of need-based loans.
Step-by-step explanation:
The loans awarded based on the financial need of a student are the Perkins loan and the subsidized Stafford loan. The significant difference between these and an unsubsidized Stafford loan is that the former are need-based, where the government pays the interest while a student is in school or during deferment periods. The unsubsidized Stafford loan, on the other hand, accrues interest from the time the loan is disbursed.
In terms of grants versus loans, grants are generally need-based awards that do not need to be repaid. Student loans, whether they be federal loans, through programs like the direct loan program, or private loans, must be repaid with interest.
When applying for financial aid, students need to complete the Free Application for Federal Student Aid (FAFSA). This process can open up opportunities for different types of aid, including grants, work-study programs, and federal loans. The data collected from the FAFSA determines a student's eligibility for various forms of aid, including need-based loans like the Perkins and subsidized Stafford loan.
Given the impact of debt on life decisions and postsecondary education, it's crucial for students to understand the terms and conditions associated with each form of aid before making borrowing decisions. Doing so can help manage future financial obligations, such as home ownership and career paths.