Financial AidContinuing your education will repay itself many times over in the future, but it may be difficult to provide the funds right now. If this sounds familiar, you're hardly alone: very few students today can afford to complete a higher education program without some form of education financing.
Fortunately, a good education is so universally considered an asset to the larger community that both government and private institutions offer various ways to help you pay for your self-improvement. From scholarships to loans, learn about all of the different kinds of ways to subsidize your education, and how to determine what assistance or awards you may be eligible for.
And now is the best time to apply for aid, according to Margaret Spelling, the Secretary of Education. The U.S. Department of Education has never offered more money in grants and loans; 2006 saw an increase of $4 billion in loans, for a total of $60 billion. The total sum of $82 billion in both grants and loans is intended to reach over 400,000 more students than it did last year. You can read Spelling's entire statement here!
Not only that, but some of these grants are aimed especially towards those pursuing careers in areas deemed most needed by the U.S. government, such as those in science, engineering, and technology. The job-oriented degrees offered by CollegeCourses.com are precisely the kinds of course studies most valued by the government and the community, so see what kind of financing opportunities are opening up to you!
Federal Student Aid
The U.S. Department of Education offers a number of programs that can provide you with the financial assistance you need to continue your education. The first step to determining which programs you may be eligible for and how much financial aid you qualify for is to fill out a Free Application for Federal Student Aid (FAFSA). Once you have applied via this form, the government will determine what aid it can supply.
Please note, however, that not all schools accept all forms of financial aid, whether they are governmental or private, so make sure to check with the financial aid department in your new school to confirm which types of aid may be applied towards your education.
The federal government offers the following kinds of financial aid to students:
Federal Stafford Loans. These loans may be used in both undergraduate and graduate programs. In the Direct Loan Program, the government pays the school directly, and in the Federal Family Education Loan (FFEL) Program, a private institution provides the funds, and the loan is guaranteed by the government. You may be eligible for up to $2,625 in your first year of undergraduate study, and the amount increases for each following year, and still further for graduate study.
As loans, the amount must be completely repaid, and may also accrue interest. The interest rate is variable, but cannot exceed 8.25%. There are two different kinds of Stafford loans: according to your financial need, you may be granted a subsidized loan, in which the government pays off the interest while you are in school, or an unsubsidized loan, in which you are answerable for the interest from the time of receipt.
Perkins Loans. These lower interest (5%) loans are provided according to demonstrated financial need. If you are an undergraduate, you may qualify for up to $4,000, and if you are pursuing graduate study, you may qualify for up to $6,000. Though they have a lower interest rate, these loans must be repaid just like the Stafford loans.
Federal PLUS Loans. PLUS loans are available to the parents of enrolling students. They are always unsubsidized, with a variable interest rate that cannot top 9%. If you are independent, you may qualify for additional Stafford loans.
Federal Pell Grants. Grants are awards, and the amount does not need to be repaid. Pell Grants are only available to undergraduate students.
A couple of new Pell Grants have just become available. The first is the Academic Competitiveness Grant, awarded to those who successfully completed a course of high school study deemed 'rigorous' by local and federal agencies. The second is the SMART Grant, which provides funding in the third and fourth year of full-time undergraduate study in mathematics, technology, engineering, life, physical or computer sciences, and languages deemed important to future national security.
Federal Supplemental Educational Opportunity Grants. These grants, again only applicable to undergraduate study, do not need to be repaid. The amount varies from $100 to $4,000.
Federal Work Study. These programs can help find you a low-level job, sometimes within to your college or university. The wages that you earn can go directly into your tuition fees.
State and School Financial Aid
In addition to federal financial aid, almost all states offer their own financial aid options to residents wishing to continue their education. Your prospective school may also have options for its students!
The first stop on your search for these kinds of financial aid is the financial aid office at your new college or university. It is mandatory for schools to supply you with relevant student aid opportunities, and inform you about application procedures and requirements. You may also research any further student aid possibilities at your local library. Most libraries have student aid or financial aid categories in their reference section.
But whatever kind of financial aid you’re applying for, your best bet is to start by filling out the FAFSA form. All state student aid requires the FAFSA, and many schools or other private institutions prefer to use it to inform their decision, even if it is not explicitly required.
Eligibility
To be eligible to apply for federal student aid, first be sure you meet all of these conditions:
- You must be a U.S. Citizen, or an eligible non-citizen.
- You must have a valid Social Security Number, unless you are a citizen of the Federated States of Micronesia, the Republic of the Marshall Islands or the Republic of Palau.
- You must be registered with the Selective Service Registration if you are male and within 30 days of your 18th birthday.
- You must have a high school diploma, a General Education Development (GED) Certificate, or pass an Ability-To-Benefit (ATB) test.
- You must be enrolled or accepted at a school, college or university that participates in federal student aid programs.
- You must demonstrate financial need, unless applying for unsubsidized Stafford loans.
- You must sustain academic application and success while in school. Different grants and loans have different requirements in terms of the upholding of your GPA.
- You must NOT be in default for a student loan.
- You must NOT owe a refund on a federal grant.
- You must NOT have certain drug convictions on your record. For more information on what these are, and how you can achieve eligibility, visit FAFSA's website and examine the Drug Conviction worksheet.
If you are ineligible on one of these counts, talk to personnel in your school’s financial aid office. You may still be eligible for non-federal aid, for which you will also need to complete the FAFSA form. Your school will be able to help you determine which kinds of aid you can apply for.
How Much Financial Aid Am I Eligible for?
There are a number of determining factors in how much student aid you can receive from federal, state, and school need-based grants and loans. Your Expected Family Contribution, your enrollment status, the tuition cost, and the year of school you are entering all play a role.
Your Expected Family Contribution (EFC) is the amount you/your family are deemed able to pay in furthering your education. A formula has been established to determine, by law, how much your assets and income enable you to pay. Worksheets are available from the Department of Education for more information on how your EFC is calculated. You qualify for a Pell Grant if your EFC is below a given amount.
Once your Pell Grant eligibility has been decided, your remaining financial need is reviewed. Your remaining financial need is determined by subtracting your EFC, Pell Grant or other student aid from the Cost of Attendance. This last amount, the Cost of Attendance, is the sum total of tuition, fees, room and board if applicable, textbooks, supplies, transportation, and other related costs. The Cost of Attendance is adjusted for some special circumstances such as unemployment or extraordinarily large medical expenditures.
For more specific information, you can download the Education Beyond High School: The Guide to Federal Student Aid here.
Scholarships and Fellowships
In addition to need-based grants and loans, many schools and other private institutions offer merit-based scholarships—you may be eligible for both! Scholarships are awards given to undergraduates, and fellowships recognize those in graduate studies.
Scholarships and fellowships are awarded on the basis of overall academic excellence, or demonstrated superiority in a certain subject. Scholarships are also available for those pursuing certain, sometimes rarer, subjects, or for minorities or for people in specific underrepresented regions of the country. Need-based scholarships are also available, though these generally require an at least average academic record.
These types of financial awards are similar to grants in so far as the money is a 'gift' towards your education and does not need to be repaid! However, this also means that the competition is fierce, and they are difficult to obtain. If you take the time to apply for relevant scholarships, however, you won't be sorry; not only will it prove helpful in paying for your education, but it will also be an honor that you can put on your resume when applying for jobs.
The internet is a great way to search for scholarships. You can type 'scholarship' and a few specifications into any search engine, and you will probably come back with a slew of results. But watch out for scholarship scams: scholarships are supposed to reward your intelligence, so don’t fall for deals that require an application fee, or 'scholarship tutorials' that charge you for a consultation.
Particular sites for scholarships also exist, and ones like FastWeb Scholarship Search can help you in a personalized search. If you put in details about things such as your academic record, your prospective program and specialization, your background, or your financial need, FastWeb will connect you with the scholarships that fit you best.
You can also find information on local scholarships at your nearest public library. Your school may likely offer scholarships, too, and the financial aid office is the best place to go to seek those opportunities.
Private Loans
Also called Alternative Education Loans, Private Student Loans are available from many banks and lending organizations. The conditions of these loans are specifically suited towards financing education-related costs. Sometimes you can defer the loan until after graduation, an option not available with some federal loans. These loans require no forms other than the loan application specific to the institution.
But before you are sold on a private student loan as the answer to your needs, remember that the higher interest rates on private loans will put you even further in debt upon graduation than federal or state loans would. Realistically, the government and private organizations do not always supply enough money to fully fund your education, but make you sure you examine other options and assets you have before taking out a loan. |
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