If you’re reading this, you’re probably thinking about attending a college program. This new stage of life offers many exciting opportunities, but the price tag associated with higher education can be discouraging. Fortunately, there are plenty of resources available to make receiving your education affordable, specifically in the form of federal financial aid.
Federal Student Aid is a financial lending program that is backed by the federal government. The amount of money a student can borrow, or money granted without repayment, is usually based on financial need. Financial need is determined by a variety of factors including but not limited to:
- Income
- Cost of Program
- Current financial obligations
Money that is available from the federal government includes federal aid loans, grants, federal aid scholarships, and work-study programs. This money can be used to pay your tuition, books, room and board as well as any additional expenses incurred as a result of your education.
Federally backed student aid, most specifically loans, has certain attractive protections should you, the borrower, lose your job or not be able to make payments at any point during the life of the loan. Some of these protections include both loan forgiveness and forbearance.
Read on for your survival guide to all federal student aid programs that might be available to you.
Grants
For the most part, grants DON’T have to be paid back. Grants come from various sources, including federal and state governments, individual colleges and universities, and private foundations and nonprofits.
The four main federal grant programs are primarily reserved for students with demonstrated financial needs. They are:
- Teacher Education Assistance for College and Higher Education (TEACH)
- Federal Supplemental Educational Opportunity Grants (FSEOG)
- Iraq and Afghanistan Service Grants
- Federal Pell Grants
Who Can Apply for a Grant
Grants are available for students attending career school or college, but the different types of federal aid have varying caps and targeted recipients:
- Pell Grants have a max annual award of $6,495
- FSEOG awards are capped at $4,000 per year
- Iraq and Afghanistan Service Grants are specifically reserved for individuals with military parents who died serving in Iraq or Afghanistan after 9/11
- TEACH Grants are only available to students going into teaching.
When to Apply for a Grant
Applying for grants starts with the FAFSA or the Free Application for Federal Student Aid. Applications for the following academic year begin on October 1st and remain open until June 30th, but many grants are awarded on a first-come, first-served basis. You’ll want to complete your application as early as possible, so you don’t miss out on any opportunities!
How to Apply for Grant
FAFSA is your key to different types of federal aid. To fill out the form, you’ll need access to all your recent tax and banking information — or your parents, if you’re applying as a dependent student.
Whether you’re considered “dependent” or “independent” depends on many factors, including the following:
- Age
- Marital status
- Dependents
- The education you’re pursuing
Most undergraduate students are considered “dependent,” but you can check out the dependency questionnaire on the FAFSA website to confirm your status.
When it comes to grants, the key is to remember to read the conditions carefully. There are some scenarios that could hold you responsible for paying the money back.
For example, if you have a TEACH grant, you’re required to teach four years full-time in a school that serves low-income students — and it has to be done within eight years of graduating. If you don’t meet that requirement, you might be asked to repay the grant money.
Federal Aid Scholarships
Scholarships, like grants, are also a form of federal financial aid that doesn’t need to be paid back! And there’s a huge variety of federal aid scholarship options catered to specific people, circumstances, and talents. Two of the biggest ones are merit scholarships and athletic scholarships.
Who Can Apply for a Scholarship
“Merit-based” scholarships are offered to students with outstanding academic performance and test scores. You can often qualify for this funding with or without additional demonstrated need. If your family income edges you out of need-based federal financial aid, but you still can’t afford the cost of tuition and fees out of pocket, scholarships could be your way in.
If you’re a stellar athlete, you’re surely aware of athletic scholarships. Division I and II schools in the NCAA offer over $3.6 billion a year to student-athletes. If you manage to score the coveted “full ride,” you’ll be covered for tuition, room and board, and even books! But there are also many partial scholarships available, as well as NCAA-specific financial aid options. Just remember that only around two percent of high school athletes secure athletic scholarships for college, so it’s good to have backup options!
You may also qualify for certain scholarships based on demographics, where you’re from, or even because you come from a military family! Most scholarships come directly from the schools themselves, but there are also scholarship options from non-profits, employers, private companies, and social service organizations. They may be a one-off grant or a recurring annual scholarship, but every little bit counts!
When Should You Apply for a Financial Aid Scholarship
Many merit aid scholarships offered directly from the school don’t require additional application steps – you’ll be considered based on your GPA and standardized test scores at the normal time you apply. The best way to access this type of financial aid is just to ensure that the schools you’re applying to offer it.
The process for athletic scholarships begins much earlier. You’ll need to register an account with the NCAA Eligibility Center by the summer before your senior year. Still, many student-athletes start getting recruited to schools in their sophomore year of high school.
How to Apply
Scholarships, unlike grants, don’t have a universal application process. Many smaller scholarships offered by private organizations involve some type of essay and supplementary application. If you’re in high school, your guidance counselor should be able to help point you towards local scholarships that you’d be a good fit for. Many merit scholarships require no additional application work — just a little more researching to decide where you want to apply.
Apply before or during the common app application period.
Federal Work-Study
Federal work-study is a way for students to earn money working part-time on campus.
Who Can Apply for a Federal Work-Study
Work-study is offered based on the financial aid determined by your FAFSA and can help with the small day-to-day expenses of college, like meals and books. Anyone can apply, but you’ll only qualify if your FAFSA shows demonstrated financial need.
When Should You Apply for a Federal Work-Study
Complete your FAFSA as soon as possible after the October 1st open date, but no later than June 30th. If you qualify, start applying for jobs as soon as you get to campus!
How to Apply
As with all different types of federal aid, the application process begins with the FAFSA.
But unlike other forms of federal student aid, being awarded work-study funds doesn’t guarantee you the money — or the job to earn it! Most colleges require students to apply and interview for available work-study jobs on campus. Depending on the school, there might not be enough positions to go around for everyone who qualifies. This is because schools have a limited amount of work-study funding to pay students with.
The good news is that if all the good work-study jobs are gone by the time you apply – or, if you don’t qualify for work-study, there are still likely to be part-time on or off-campus jobs available to you to supplement your income while you’re hitting the books!
Federal Aid Loans
Loans are borrowed money that must be re-paid with interest. The US Department of Education’s federal student loan program offers a combination of subsidized loans based on financial need, as well as unsubsidized loans, which are available to anyone.
Who Can Apply for a Federal Aid Loan
- Direct PLUS loans.These are only available to graduate students or parents of undergraduate students. They are awarded regardless of financial need but require a credit check, and unlike the other loan types, they accrue interest even while you’re in school. These loans are available to cover any remaining costs not covered by other financial aid.
- Direct subsidized Loans. These are only available to undergraduate students with financial need.
- Direct unsubsidized loans. These are available to undergraduate, graduate, and professional students and are available to anyone, regardless of their financial need.
When Should You Apply for a Federal Aid Loan
Apply for the federal financial aid loan as close to October 1st as possible!
The downside to federal student loans is that they are capped at a max of $12,500 per year as an undergraduate — often less, depending upon your status. Graduate students are capped at $20,500 per year. When taking out a loan, you should always carefully consider how much you can afford to take on given your current circumstances and career plans and how the loan might impact your financial future.
However, the limits of these federal student loans mean some students must look to private lenders to cover college’s remaining costs.
How to Apply
Fill out the FAFSA first. If you qualify, you’ll receive your federal loan options as part of your school’s financial aid offer.
One benefit of federal student loans is that the interest rates are much lower than those you’ll encounter with a private lender. With direct subsidized and unsubsidized loans, the lending isn’t dependent upon your parent’s credit scores. Depending on your career plans, you may even qualify for partial loan forgiveness.
If you work for the government, a qualified non-profit, or as a teacher in a low-income school, you may be eligible to have a significant portion of your loans “forgiven” after several years of full-time work and consecutive loan payments.
Federal Financial Aid Wrap Up
Figuring out how to pay for your dream college can seem almost as daunting as trying to get in. But there are so many different types of federal aid available for all levels of need.
If you’re willing to start your research early and fill out an extra application or two (or ten), the number after “Total Tuition, Fees, Room, and Board” might not be so scary after all.