Much of the financial aid you’ll receive and find that you’re eligible for will be the result of your Free Application for Federal Student Aid, or FAFSA. Unless you plan on paying for your college expenses out-of-pocket or through your parents’ college savings accounts, the FAFSA will answer most of your questions about how much funding you’ll be receiving and which federal aid programs you qualify for. The Department of Education starts accepting the FAFSA January 1st of each year, and completing the FAFSA online will speed up processing and leave less time for you to worry about how much financial aid you’ll be receiving. Once your application is processed, you’ll receive a Student Aid Report back that will show you the FAFSA-based funding you’re eligible for. The college funding determined by the FAFSA will include Federal Pell Grants and other need-based grants, Stafford Loans, PLUS Loans, and some versions of campus-based aid such as work-study program opportunities and the Federal Perkins Loan program.
Grants – and scholarships – are an ideal source of funding, as they don’t need to be repaid. While they are competitive and often require minimum academic standards, their primary focus is supplementing the financial aid packages of those students with the highest need. The FAFSA-based grants you may be eligible for are the Federal Pell Grant, Academic Competitiveness Grant, the National Science and Mathematics Access to Retain Talent Grant (or National SMART Grant), and, for future educators, the Teacher Education Assistance for College and Higher Education (TEACH) Grant Program. Those who qualify for the Pell Grant may also be eligible to receive a Federal Supplemental Educational Opportunity Grant, which is distributed by the college and considered college-based funding.
Pell Grants are usually awarded to undergraduates who have not yet earned a bachelor’s or a professional degree. The maximum award can change yearly and depends on program funding – it’s $5,550 for the 2011-2012 academic year – and the total you receive will be based on the results of your FAFSA. The Academic Competitiveness Grant is available to undergraduate students who qualify for the Pell Grant, and provides $750 for the first year of study and $1,300 for the second year. To be eligible for this one, students need a minimum 3.0 GPA. The National SMART Grant provides up to $4,000 for each of the third and fourth years of your undergraduate career, and is available to students with minimum 3.0 GPAs pursuing fields in math, science, and some of the liberal arts. The TEACH grant provides up to $4,000 per year for students who plan on teaching in high-need fields in and in public or private elementary or secondary schools that serve students from low-income families. Many students know little about many of the grant opportunities mentioned above outside the Federal Pell Grant, so make sure you know your options and are proactive in pursuing grant funding you feel that you’re eligible for.
To qualify for federal student loans, you’ll need to fill out your FAFSA. FAFSA-based student loans include the Federal Stafford Student Loan and the Parent Loan for Undergraduate Students, or PLUS Loan. Federal Perkins Loans are consider college-based funding options as your intended college will act as your lender, but you’ll still need to fill out a FAFSA to qualify for those.
Federal Stafford Loans are the most popular student loans out there, and are available to both undergraduate and graduate students. Schools that participate in the Federal Family Education Loan (FFEL) Program or in the William D. Ford Federal Direct Loan (Direct Loan) Program, or both, offer Stafford Loans. Subsidized Stafford Loans are awarded on the basis of financial need; unsubsidized Stafford Loans are not related to income, but your estimated cost of attendance and financial aid you’ve already been awarded. PLUS Loans are, you guessed it, taken out by your parents, who must have a decent credit history to be eligible. Schools that participate in the Federal Family Education Loan (FFEL) Program or in the William D. Ford Federal Direct Loan (Direct Loan) Program offer the low-interest PLUS Loans. While we know you’d like to graduate college with the fewest student loans possible, they’re often a necessary evil. Browse through our site for more information about student loans, as if you need significantly more aid than you’ve received from federal student loans, grants and scholarships, you do have other options as far as private lenders and alternative sources of aid.