• Paying for College: Grants, Loans, and Other Financial Aid Sources

Paying for College: Grants, Loans, and Other Financial Aid Sources

Finding financial aid can seem overwhelming when you’re trying to get ready for college or career school. The U.S. Department of Education’s Office of Federal Student Aid recommends:

Preparation

Scholarships and state aid can help cover the cost of college or career school, but you may find yourself in need of federal assistance. 1. Start with savings. Begin saving early. 2. Scholarships – Look for scholarships through your state or college as well as national and community organizations. 3. State aid – Many states have college funding programs. Ask a guidance counselor or your college financial aid office for more information.

FAFSA

The FAFSA is the Free Application for Federal Student Aid and is the only way to apply for federal student aid. Many universities, colleges and trade schools REQUIRE you to fill out the FASFA in order to be eligible to apply. The schools you list on your application will use FAFSA information to evaluate your financial need and determine how much federal aid you are eligible to receive. Many states and colleges also use information from your FAFSA to provide their own financial aid. • Each October 1, the FAFSA is available for the upcoming school year. It is best to fill it out as early as you can because some aid is first come, first served. • When you complete the FAFSA, you’ll need to provide personal and tax information. If you’ve filed your taxes already, you may be able to automatically retrieve the information from the IRS. If you haven’t, just estimate your tax information and update it later. • Complete the FAFSA online at https://studentaid.gov/h/apply-foraid/fafsa. Make sure to fill out and submit the FAFSA each year you are in college. There is NEVER a fee to fill the FASFA out online, do not pay for FASFA serves or companies that advertise that they can help you get FASFA money. The only legal and true way to get FASFA money is to apply directly to them. • After you submit your FAFSA, you’ll receive your Student Aid Report (SAR). Your SAR summarizes the information on your FAFSA. Review it and make corrections if needed. • Your FAFSA helps your school determine the types of federal student aid you are eligible to receive. study funds.

TYPES OF FEDERAL STUDENT AID

As the largest provider of financial aid, the U.S. Department of Ed-

Disclaimer: Scholarships types and award amounts are subject to change at any time at the discretion of the Institution awarding the scholarship. Please confirm the details of the scholarship prior to applying.

ucation’s Office of Federal Student Aid provides grants, loans, and work-study funds. Grants: Grants are free money that does not have to be repaid. Loans: Student loans are real loans (like a car or home loan) that need to be repaid with interest. Be sure to look for pay back dates and rates if you are planning to secure funding through this method. WorkStudy: A work-study job gives you the opportunity to earn money to help pay your educational expenses.

GRANTS

The U.S. Department of Education offers a variety of federal grants to students attending four-year colleges or universities, community colleges, and career schools. • Federal Pell Grants • Federal Supplemental Educational Opportunity Grants (FSEOG) • Teacher Education Assistance for College and Higher Education (TEACH) Grants • Iraq and Afghanistan Service Grants

Federal Pell Grant Program

To get a Pell grant, you must complete the: • Free Application for Federal Student Aid (FAFSA) Quick information on Pell grants: • A Federal Pell Grant, unlike a loan, does not have to be repaid. • The maximum Pell grant for 2021-22 award year (July 1, 2021, to June 30, 2022) is $6,495.00. Check the FAFSA website for 2022-2023 award year. • The amount depends on your financial need, costs to attend school, status as a full-time or part-time student, and plans to attend school for a full academic year or less.

Program Description

• The Federal Pell Grant Program provides need-based grants to lowincome undergraduate and certain post-baccalaureate students to promote access to postsecondary education. Students may use their grants at any one of approximately 5,400 participating postsecondary institutions. Grant amounts are dependent on: the student’s expected family contribution (EFC) (see below); the cost of attendance (as determined by the institution); the student’s enrollment status (full-time or part-time); and whether the student attends for a full academic year or less. Students may not receive Federal Pell Grant funds from more than one school at a time. • Financial need is determined by the U.S. Department of Education using a standard formula, established by Congress, to evaluate the financial information reported on the Free Application for Federal Student Aid (FAFSA) and to determine the family EFC. The fundamental elements in this standard formula are the student’s income (and assets if the student is independent), the parents’ income and assets (if

Disclaimer: Scholarships types and award amounts are subject to change at any time at the discretion of the Institution awarding the scholarship. Please confirm the details of the scholarship prior to applying.

the student is dependent), the family’s household size, and the number of family members (excluding parents) attending post-secondary institutions. The EFC is the sum of: (1) a percentage of net income (remaining income after subtracting allowances for basic living expenses and taxes) and (2) a percentage of net assets (assets remaining after subtracting an asset protection allowance). Different assessment rates and allowances are used for dependent students, independent students without dependents, and independent students with dependents. After filing a FAFSA, the student receives a Student Aid Report (SAR), or the institution receives an Institutional Student Information Record (ISIR), which notifies the student if he or she is eligible for a Federal Pell Grant and provides the student’s EFC. • Federal Pell Grants are direct grants awarded through participating institutions to students with financial need who have not received their first bachelor’s degree or who are enrolled in certain postbaccalaureate programs that lead to teacher certification or licensure. Participating institutions either credit the Federal Pell Grant funds to the student’s school account, pay the student directly (usually by check) or combine these methods. Students must be paid at least once per term (semester, trimester, or quarter); schools that do not use formally defined terms must pay the student at least twice per academic year.

Federal Supplemental Educational Opportunity Grant (FSeOG) Program

• The FSEOG Program provides need-based grants to help low-income undergraduate students finance the costs of postsecondary education. Students can receive these grants at any one of approximately 3,800 participating postsecondary institutions. When making FSEOG awards, the institution must give priority to those students with “exceptional need” (those with the lowest Expected Family Contributions, or EFCs, at the institution) and those who are also Federal Pell Grant recipients. • A participating institution applies each year for an FSEOG allocation by submitting a Fiscal Operations Report and Application to Participate (FISAP) to the U.S. Department of Education. Using a statutory formula, the Department allocates funds based on the institution’s previous funding level and the aggregate need of eligible students in attendance in the prior year. Institutions must contribute 25 percent of the award amounts. • Students must file a Free Application for Federal Student Aid (FAFSA) as part of the application process for an FSEOG.

Teacher Education Assistance for College and Higher Education (TEACH) Grants

A Teacher Education Assistance for College and Higher Education (TEACH) Grant is different from other federal student grants because it requires you to take certain kinds of classes in order to get the grant, and then do a certain kind of job to keep the grant from turning

Disclaimer: Scholarships types and award amounts are subject to change at any time at the discretion of the Institution awarding the scholarship. Please confirm the details of the scholarship prior to applying.

into a loan. • The TEACH Grant Program provides grants of up to $4,000 a year to students who are completing or plan to complete coursework needed to begin a career in teaching. • Due to sequestration, award amounts for any TEACH Grant that is first disbursed on or after Oct. 1, 2021, and before Oct. 1, 2022, must be reduced by 5.7 percent from the award amount for which a recipient would otherwise have been entitled. • As a condition for receiving a TEACH Grant, you must sign a TEACH Grant Agreement to Serve in which you agree to (among other requirements) teach in a high-need field or at an elementary school, secondary school, or educational service agency that serves students from low-income families for at least four complete academic years within eight years after completing (or ceasing enrollment in) the course of study for which you received the grant. Important: If you do not com-

plete your service obligation, all TEACH Grant funds you received will be converted to a Direct Unsubsidized Loan. You must then repay this loan to the U.S. Department of Education, with interest charged from the date the TEACH Grant was disbursed (paid to you or on your behalf).

Iraq and Afghanistan Service Grant

Like other federal grants, Iraq and Afghanistan Service Grants provide money to college or career school students to help pay their education expenses. However, Iraq and Afghanistan Service Grants have special eligibility criteria. You may be eligible to receive the Iraq and Afghanistan Service Grant if you are not eligible for a Federal Pell Grant on the basis of your Expected Family Contribution, but meet the remaining Federal Pell Grant eligibility requirements, and your parent or guardian was a member of the U.S. armed forces and died as a result of military service performed in Iraq or Afghanistan after the events of 9/11, and you were under 24 years old or enrolled in college at least part-time at the time of your parent’s or guardian’s death.

LOANS

If you apply for financial aid, you may be offered loans as part of your school’s financial aid offer. A loan is money you borrow and must pay back with interest. If you decide to take out a loan, make sure you understand who is making the loan and the terms and conditions of the loan. Student loans can come from the federal government or from private sources such as a bank or financial institution. Loans made by the federal government, called federal student loans, usually offer borrowers lower interest rates and have more flexible repayment options than loans from banks or other private sources. The William D. Ford Federal Direct Loan (Direct Loan) Program is

Disclaimer: Scholarships types and award amounts are subject to change at any time at the discretion of the Institution awarding the scholarship. Please confirm the details of the scholarship prior to applying.

the largest federal student loan program. Under this program, the U.S. Department of Education is your lender. There are four types of Direct Loans available: — Direct Subsidized Loans are loans made to eligible undergraduate students who demonstrate financial need to help cover the costs of higher education at a college or career school. — Direct Unsubsidized Loans are loans made to eligible undergraduate, graduate, and professional students, but in this case, the student does not have to demonstrate financial need to be eligible for the loan. — Direct PLUS Loans are loans made to graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid. — Direct Consolidation Loans allow you to combine all of your eligible federal student loans into a single loan with a single loan servicer.

Direct Loans

• Subsidized and unsubsidized loans are federal student loans for eligible students to help cover the cost of higher education at a fouryear college or university, community college, or trade, career, or technical school. The U.S. Department of Education offers eligible students at participating schools Direct Subsidized Loans and Direct Unsubsidized Loans. • To receive either type of loan, you must be enrolled at least halftime at a school that participates in the Direct Loan Program. Generally, you must also be enrolled in a program that leads to a degree or certificate awarded by the school.

Direct Subsidized Loans

• Have slightly better terms to help out students with financial need Direct Subsidized Loans are available to undergraduate students with financial need. • Your school determines the amount you can borrow, and the amount may not exceed your financial need. • The U.S. Department of Education pays the interest on a Direct Subsidized Loan while you’re in school at least half-time, for the first six months after you leave school (referred to as a grace period), and during a period of deferment (a postponement of loan payments).

Direct Unsubsidized Loans

• Direct Unsubsidized Loans are available to undergraduate and graduate students; there is no requirement to demonstrate financial need. • Your school determines the amount you can borrow based on your cost of attendance and other financial aid you receive. • You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods.

Disclaimer: Scholarships types and award amounts are subject to change at any time at the discretion of the Institution awarding the scholarship. Please confirm the details of the scholarship prior to applying. 6