Sources of Financial Aid
Financial aid is money available from a variety of sources that helps
student's and their family pay for
college education.
Four basic types of financial aid are available.
-
Federal Grants
-
Federal Loans & Work-Study
-
State Aid
-
Private Scholarships, Grants & Loans
The federal government has a series of financial aid programs
designed to help families with demonstrated need to afford the increasingly high
cost of a college education. The U.S. Department of Education is the largest
source of financial aid for college, but they are not alone in providing
assistance from the federal level. Scholarships, loans, job training, money to
pay existing student loans, they're all available from a variety of programs
administered by the federal government. Important Note: Not all schools
participate in all federal student aid programs. Check with your high school
guidance counselor or your school's financial aid office to make sure your
school participates in the federal program (s) you are interested in.
Educational loans are moneys that you or your parents
borrow for
educational expenses. Loans must be paid back with interest. An
educational loan is a serious commitment. You must make payments
until the loan and interest are fully paid. The federal government
sponsors a variety of subsidized and unsubsidized loan programs.
-
Federal Perkins Loans:
Are low-interest (5 percent) loans that must be repaid; the
maximum annual loan amount is $4,000 for undergraduate students and
$6,000 for graduate students, administered
by the college you are attending and guaranteed by the federal government.
-
Federal Subsidized and Unsubsidized Stafford Loans:
Are student loans that must be repaid and are available to both
undergraduate and graduate students. If your school participates in the
William D. Ford Federal Direct Loan (Direct Loan) Program,
the federal government provides the funds for your Stafford Loan. If your school
participates in the Federal Family Education Loan (FFEL)
Program, a private lender provides the funds for your Stafford Loan,
although the federal government guarantees the loan funds. First-year
undergraduates are eligible for loans up to $2,625.
Amounts increase for subsequent years of study, with higher amounts for graduate
students. The interest rate is variable, but never exceeds
8.25 percent. If you qualify (based on need) for a
subsidized Stafford loan, the government will
pay the interest on your loan while you are in school, during grace periods, and
during any deferment periods. You are however responsible
for interest payments on unsubsidized loans.
-
Federal Direct Loans:
This is same as Federal Subsidized Stafford,
Unsubsidized Stafford and PLUS loans, except in this case ONLY the U.S. Department
of Education issues the loan instead of a lending institution or other private
lenders.
Grant or financial aid programs in various forms are provided in all
US states. These programs may vary in their terms or eligibility
requirements depending on the requirements of each individual
state's Department of Education or higher education agency. However,
many of these programs are jointly funded by the state and the
federal government through the Federal State Student Incentive
Grant Program.
-
There are some
basic requirements for almost all state grant
programs. One usually needs to be a resident of the
state which is awarding the grant. Most states also require that
you attend a college in your state
of residence if you are going to receive
state aid. For detailed information about the grants and scholarships
available in your state, check with your state's Department of
Education or higher education agency.
Private or outside scholarships can be obtained by students
who put time and effort into the search.
-
Outside scholarships
can include aid provided by your own high school,
local community organizations, service clubs, private companies or any other
foundations, religious organizations, community organizations, and civic groups,
as well as organizations related to your field of interest, such as the
American Medical Association or
American Bar Association.
-
Untapped sources
With federal and state funding being cut, there
is a lot of interest in the private sector as a source of financial
aid. While there are untapped sources of financial
aid in existence, much of that aid is relatively difficult to
get. Many of the private sources of aid may have very restrictive requirements to
qualify, and many scholarships can be highly competitive based
on grades, achievements and talents.
|
