If you need help paying for college or a professional school, the office of Federal Student Aid should be your first and best option. More than $150 billion has been offered to students in the United States each year. So you should consider having your share of this national cake.
This aid could come in the form of Grants, Loans, and Work-Study funds. You can use this aid to pay for school expenses like tuition, room, and board, or books and supplies. But before you get too excited, you should know the different types of Federal Student Aid.
Types of Federal Student Aid
There are three main types of federal student aid; Gifted Aid (Grants and Scholarships), Loans, and Work-Study aid. So let’s explore each type to have a good grasp of which you should consider.
1. Gifted:
Gifted aid is when you receive financial assistance from the federal government, which you don’t have to pay back. This assistance you receive can help cover parts or the entire cost of your college, depending on the cost of your college program. Of course, You have to qualify to receive this type of federal student aid.
Gifted aid could come in the form of Grants or Scholarships. These two types of Gifted Aid could come from the government, the school or college you want to attend, non-profit organizations, and other private organizations.
Now let’s expand more on Grants and scholarships.
Grants:
Grants are money you don’t have to pay back unless you withdraw from classes during the semester from which the Grants were provided. There are two types of Grants; the Pell Grant, and the FSEOG(Federal Supplemental Educational Opportunity Grant)
Pell Grants are funds made available by the federal government as part of your overall federal student aid package. These grants are need-based and are open to low-income students. Pell Grants must be paid back in full if you withdraw from classes during the semester provided by this Grant.
The FSEOG is additional money available to you if you have already qualified for the Pell Grant. To receive the FSEOG, you must demonstrate an extreme financial need based on your EFC(Expected Family Contribution). If your EFC is low, you can qualify for the FSEOG.
To qualify for either of these Grants, you will have to fill out the FAFSA.
Scholarships:
Like Grants, you don’t have to pay back scholarships. Some Scholarships are renewable each semester as long as you meet the minimum required GPA set by the scholarship providers. Scholarship can also be a one-time Grant.
This Grant can come from either private sources or the college you attend. Let’s take a look at these two sources.
Scholarships From Private Sources:
Private scholarships can come from corporations, community organizations, and non-profit organizations. Private scholarships are either Merit-based, Need-based, or Demographic-specific.
Merit-based is based on your GPA, volunteer work, or involvement in community and social organizations.
The Need-based is based solely on your family income.
Demographic-specific is based on demographics like your location, ethnicity, if you have children, or whether or not your parents went to college.
The FAFSA does not cover private scholarships. You will need to search and apply for a private scholarship on your own. Here is a FREE platform where you can search for private scholarships.
Scholarships from College:
Unlike the private scholarship, the FAFSA is your starting point to apply for any college scholarship program. Your school will look at your financial needs to determine the right federal student aid package for you.
Once again, you don’t have to pay back the college scholarship as long as you meet the minimum required GPA.
2. Work-Study:
Work-Study programs provide you with a part-time job while you’re still enrolled in school. You can apply for a Work-Study financial student aid program through the FAFSA.
Federal Work-Study program is available to undergraduates, graduates, and professional students. You can still qualify for a Work-Study financial aid program whether you are a part-time or full-time student.
With the Work-Study program, you can only work a part-time job on-campus or off-campus. The amount of money you receive depends on when you apply, your financial needs, and whether or not your school provides funding.
3. Student Loans:
Another Federal Student Aid program is the Student Loans. There are private and public student loans. Since we mainly cover Public Financial Student Aid, we will only look at Stafford, Perkins, and the PLUS student loans.
You can check this free resource on private student loans if you are interested.
Stafford or Federal Student Loans:
The Stafford student loans can be either subsidized or unsubsidized. Check out this free resource to dive deep into subsidized and unsubsidized federal student loans.
Perkins Loans:
The Perkins is the best available student loan because it is completely subsidized. No interest accrues while you are in school. These loans have a low fixed interest rate and have a ten-year repayment period. This repayment period begins six months after you leave school.
PLUS Loans:
These are loans your parents can get to pay for your college. To get these loans, your parents must have a good credit history. These loans also have a fixed interest rate. You can check the FAFSA form to see if you and your parents are eligible.
How much Federal Student Aid can you get?
The amount of federal student aid you can receive depends on the type of aid you apply for. Federal student loans range from $5,500 to $12,500 per academic year. Graduates and professional students can borrow up to $20,500 per academic year.
Grants are often lesser than loans since you don’t have to pay them back. The maximum amount of the Federal Pell Grant is around $6,495. Scholarship amount varies because it can be a full scholarship or semester-based scholarship.
What should you do if you maxed out federal student aid?
You might run into a situation where you have exhausted all federal student aid packages and still need financial help to complete college. In such a case, you should consider one of these five options;
- Contact your financial aid office to check with them if there are other options or programs you can qualify for.
- Apply for additional scholarships and grants if you meet the requirements.
- You can get a student job to have extra money for your college expenses.
- You can turn to your family or friends for financial assistance.
- Consider applying for a private student loan if none of the above options are possible. Make sure you have exhausted all other options before getting a private student loan because they can be expensive.
Who is eligible for federal student aid?
To be eligible for a federal student aid program, you must meet one of the following criteria;
- You are a US Citizen, National(Natives of American Samoa or Swains Island), Permanent Resident(I-151, I-551, or I-551C Resident Card), Refugee, Asylum Granted, Cuban-Haitian Entrant, or Victims of human trafficking.
- Students with a criminal conviction
- Students with a parent who was killed in Iraq or Afghanistan
- Intellectual Disabled students
- Homeless students.
- Students in or have been in foster care.
Who is responsible for the federal student aid program?
Although federal student aid is a program from the US Department of Education, your school is responsible for distributing your financial aid. So if you have any queries regarding your financial aid package, you should contact your school for clarification.
But when it comes to paying back a federal student loan, you are responsible for making on-time payments. For a PLUS loan, your parents are responsible.
How do you apply for federal student aid?
It is entirely free to apply for any federal student aid programs. All you need to do is download the correct FAFSA form, fill it out, and submit it. You can directly access the official Federal Student Aid website for more information on applying.
Bottom-Line:
Federal student aid can come in different forms and packages. Knowing the right one to apply for is essential. Consider applying for Grants or Scholarships before exploring other forms of a financial student aid program.
