Learn about the difference between grants, student loans and college scholarships and bank on your future!
What is Financial Aid? Financial aid is monetary aid to help you pay for your college education. Aid is made available from grants, college scholarships, student loans, and part-time employment from federal, state, institutional, and private sources. The types and amounts of aid awarded are determined by financial need, available funds, student classification, academic performance, and sometimes the timeliness of application.
FAFSA stands for Free Application for Federal Student Aid. The FAFSA is the Federal Department of education's primary application for financial aid and is the gateway form to just about any other federal, state or private grants, college scholarships, student loans or college work study programs. What is the College Scholarship Services Profile (CSS Profile)? It is a secondary financial aid form that supplies further information about your family income. What is the difference between a Grant, a Student Loan and a College Scholarship? Grants are usually determined by financial need but can also be influenced by academic merit. Unlike grants, student loans are money loaned from an academic institution, financial institution, or federal government that must be repaid. Those awarded by the college itself are often called MERIT AID. While grants tend to be issued according to financial need, college scholarships are awarded on a broad-base of criteria, the most common being academic merit. Federal Grants are free gift money from the Federal Department of Education while campus-based grants are government funds issued directly from your college. Federal Grants Pell Grants are considered a foundation of federal financial aid, to which aid from other federal and non-federal sources might be added. The Academic Competitiveness Grant is a new grant available to first year college students who graduated from high school after January 1, 2006 or for second year college students who graduated from high school after January 1, 2005. The National SMART Grant award is in addition to the student's Pell Grant award. Campus-based Grants
The Federal Supplemental Educational Opportunity Grant (FSEOG) The FSEOG is a campus-based grant aimed at assisting students with exceptional financial need. What are the different kinds of student loans? A student loan is money that needs to be repaid after you have completed your studies. There are campus-based loans, which you repay directly to your college, as well as federal loans which you repay either directly to the U.S. government or to your financial institution.
Campus-based LoansFederal Perkins Loan The Federal Perkins loan is a campus- based loan because it is administered directly by the financial aid office at each participating school. In other words, your school is the lender although the loan is made with government funds. Your school will either pay you directly or apply your loan to your school charges. The Federal Perkins Loan is a low-interest , 5 % loan for students with exceptional financial need. Federal LoansThe U.S. Department of Education administers the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Stafford Loans (for students) and 2. PLUS loans (for Parents). Schools generally participate in either the FFEL or Direct Loan program, but sometimes schools participate in both. Stafford Loans Stafford loans are federal loans for students. Eligibility rules and loan amounts are identical under both the FFEL and Direct loan programs, but providers and repayment plans differ. You might be able to borrow loan funds beyond your subsidized loan amount even if you don't have demonstrated financial need. In that case, you'll receive an unsubsidized loan. Your school will subtract the total of your other financial aid from your cost of attendance to determine whether you are eligible for an unsubsidized loan. Unlike a subsidized loan, you are responsible for you're the interest from the time the loan is disbursed until the time it is repaid in full. Federal Family Education Loan (FFEL)Funds from your FFEL will come from a bank, credit union or other lender that participates in the program. Besides interests, you will pay a fee of up to 4 % of the loan, deducted proportionately from each loan disbursement. Direct LoanUnder the direct loan program, the funds for your loan come directly from the federal government and you will need to repay your Direct Loan to the U.S. Department of Education's Direct Loan Servicing Center. Like the FFEL loan, you will pay a fee of up to 4 % of the loan. PLUS Loans (Parent Loans)Parents can borrow a PLUS Loan to help pay your education expenses if you are a dependent undergraduate student enrolled at least half time in an eligible program at an eligible school. PLUS Loans are available through the Federal Family Education Loan (FFEL) Program and the Direct Loan Program. For a Direct PLUS Loan, your parents must complete a Direct PLUS Loan application and promissory note, contained in a single form that you get from your school's financial aid office. For a FFEL PLUS Loan, your parents must complete and submit a PLUS Loan application available from your school, lender, or your state guaranty agency. Some scholarships are awarded by the college itself, often called MERIT AID.
Can I apply for a grant, a loan and a scholarship at the same time? For example, you can only receive an Academic Competitive Grant or a Federal Supplemental Educational Opportunity Grant if you have received a Pell Grant.
What is the Federal Work Study Program? The Federal Work-Study Program (FWS) is a campus-based program that provides part-time jobs for undergraduate and graduate students with financial need, that allows them to earn money to help pay education expenses.
How often should I apply for financial aid? You will need to apply for financial aid each year. If you don't receive a renewal FAFSA by February 15, fill out a new FAFSA form.
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How do I know whether I am eligible for financial aid? Don't assume that you will not qualify for financial aid. Many families don't apply for financial aid, because they believe that they earn too much money. Some loans and scholarships are available regardless of need.
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