Federal Financial Aid
Federal Financial Aid Options At a Glance
|Financial Aid Program||Type||Interest Rate||Notes|
|Federal Pell Grant||Grant||N/A||Primarily for undergraduate students|
|Federal Supplemental Educational Opportunity Grants||Grant||N/A||Limited Availability|
|Federal Work Study||Part Time Job||N/A||Arranged through the school|
|Federal Perkins Loans||Loan||5 percent||Repay over 10 years, starting 9 months after graduation|
|Federal Stafford Loans||Loan||Variable, but will not exceed 8.25 percent||Variable payback period, starting 6 months after graduation|
|PLUS Loans||Loan||Variable, but will not exceed 9 percent||Variable payback period, starting 60 days after receipt|
|Consolidation Loans||Loan||Variable, but will not exceed 8.25 percent||Used only to consolidate other types of financial aid assistant receveid|
Financial Aid Overview
Picking a school for you, or your child, to go to college can be an intimidating process. There are two major challenges - picking the best schools, and figuring out how to pay for it. To make matters even more complicated, many schools are very expensive, and this can affect your choice of schools. Further, the financial aid process is complicated. There are many choices available, and many things must be done to qualify for aid, and to collect it. This article will provide you with a basic overview of the process. Here are some of the key things that you need to do:
- Talk to the financial aid councilors at the school's you are considering. Always a good first step. The school financial aid councilor will provide you additional guidance on applying for federal financial aid. In addition, they will know about available scholarship programs and state financial aid packages that may apply to your situation.
- Get a grip on your financial situation. All federal financial aid packages are based off of assumptions of what you and your family are able to pay towards your education. Before you even begin the process, it makes sense for you to analyze your own situation. Understand in detail your income, expenses, and available assets and debt. This will make the rest of the process go much more smoothly.
- Understand the total college expenses required. Look at the colleges you are considering. Keep in mind the expenses you must pay are more than just the tuition. Total college expenses include tuition, room expenses, food expenses, and other fees such as application fees.
- Get the required documents in advance. Federal financial aid programs require you to provide evidenve about what income, expenses, assets, and debt that you have. So in addition, to understanding your financial aid situation, you will need to be able to document it. This includes documents such as tax returns, W-2 forms, and other. These are explained in more detail in the section on "Expected Family Contribution" below.
- Fill out the FAFSA first. Any federal financial aid program will require you to fill out the FAFSA form. Filling this form out accurately is a must at an early stage in the process. Make sure that you fill out and file the form on time.
- Review the Student Aid Report. Once you fill out the FAFSA form, you will get a report back known as the Student Aid Report (SAR). The SAR will tell you your Expected Family Contribution (EFC). Read through the report and make sure you understand what your family is expected to contribute towards college expenses.
- Calculate how much you are eligilble to receive. At this point, its easy. The amount of aid you are eligible to receive is the Total college expenses - the EFC.
- Work with your school councilor to make a financial aid plan. In addition to federal financial aid, consider other options such as scholarship programs and state federal aid.
Once you have a financial aid plan, you can pursue various types of programs. Many of these are described in detail in the articles listed below. Some key tips to keep in mind through the whole process are:
• Be on time. Make sure you file everything required in the timeframe required. Don't be late. And, in fact, for some forms, such as the FAFSA, its important to not file too early as well (you cannot file the FAFSA before January 1). Improperly timed financial aid filings can and will cost you the ability to receive some or all of the financial aid for which you are eligible.
• Be accurate. Mistakes and inconsistencies on the FAFSA form is one of the biggest reasons people lose access to financial aid. Be accurate. Make sure you have all the required documentation.
• Get good grades. Many financial aid programs are structured to provide financial aid programs purely on the basis of need. Others, such as Federal Supplemental Educational Opportunity Grants are limited in supply, and therefore provide the school with discretionary input into who gets the loan and who does not. Turn this to your advantage by showing your capacity to be an excellent student.
• Meet the school's performance requirements. All schools require recipients of financial aid to meet minimum academic performance requirements. Financial aid to pay for your education is a precious gift. Once you get it, don't lose it!
Please also refer to our info on state financial aid.