The Basic Premise Of This Site Is
You need money for college and you need it…….. Now!
- Calculate your Expected Family Contribution or EFC. You can find a free calculator HERE on my resource page.
- Do some quick math.
- Go to the website for the college you are interested in and find their cost of attendance
- Subtract your EFC from that cost of attendance
- The difference is your financial need
- If your financial need is zero then you will still qualify for the TEACH grant, the Direct Unsubsidized Loan (which you may consider because it does offer an attractive interest rate) and the Direct PLUS loan
- Review each of the programs below. Determine if you qualify and for how much aid you may qualify for
- As you are searching for colleges, make sure you are screening for ones that offer these programs (Remember not all are offered by every college)
(Keep in mind that Federal Student Aid programs are awarded by the college’s financial aid officer and most are included in the financial aid award you get after your are accepted to the college. In order to qualify you must complete a FAFSA so the college can determine if you have a financial need.)
Federal Student Aid includes the following:
Federal Student Aid – Free Money!
Pell grants are one of the few free money grants that are given out by the Federal Government. It is need based and everyone who is eligible will receive it. You must have an adjusted gross income of $32,000 for a family of 4 with less than $20,600 in assets to qualify for the maximum amount of $5730 (also assumes no student income and $1679 in student assets). It phases out as your income and assets grow. It reduces to zero at $60,000 in AGI and $30,200 in assets (again assumes no student income and $1679 in student assets) this is for the 2014/2015 school year.
- Need based aid – for qualifying undergraduates pursuing their first bachelor’s degree
- Does not have to be repaid
- $5,730 maximum per award year for 2014-2015
- Eligible if you have an Expected Family Contributions (EFC) of $5157 or less. For a breakdown see the EFC table here
- Pell grant has a lifetime eligibility maximum of 12 semesters
The Federal Supplemental Educational Opportunity Grant is need based, free money, awarded by participating colleges. These colleges receive a certain amount of money from the Federal Government (75% of the total FSEOG awarded by the school unless the school qualifies for a waiver). There’s a limited pool of FSEOG money available at each school and once it runs out there is no more for that year. If you are applying to a school that offers the FSEOG then you have to apply for this grant. Make sure you are applying for this aid as early as possible. Check with the college directly for their application deadline.
- Need based aid- priority is given to Pell Grant recipients
- Does not have to be repaid
- Not all colleges participate in the FSEOG program
- $4,000 maximum per year
This grant is not need based. If you plan on becoming a teacher this is one to consider. You will have requirements to meet including agreeing to teach in a high need field at a school that serves low income families. If you do not finish your studies or do not fulfill your teaching requirements after graduation then the grant money you received will convert to a Direct Unsubsidized Loan which must be repaid.
- NOT need based aid – For undergraduate students who plan to become a teacher in a high need field in a low income area
- Does not have to be repaid
- Teach for 4 years within 8 years of completing your study
- You must sign a teach grant agreement
- $4,000 maximum per year
- Will covert to a Direct Unsubsidized Loan if you do not meet the requirements
This grant is specifically for students who had a parent or guardian die in service as a result of 9/11. If you fall under this category you can find additional information by clicking the link above. The grant amount is basically the same as the Pell grant and you may receive this even if your not eligible based on your family’s EFC.
Federal Student Aid – You Have To Do Something To Get This
Federal Work-Study is a need based program that offers part-time work while in college. It is funded by the Federal Gov’t and awarded by the college and included in your financial aid award. Not all colleges participate!
- Need based aid
- Employment in civic work or work related to your studies
- Total award depends on your financial need and the school’s amount of funds
- Payment is made to you or to the college to pay your college bill
Federal Student Aid – These Have To Be Paid Back
Federal Perkins Loans are need based and are only offered at schools that participate in the Federal Perkins Loan Program. With this loan the college is the lender. The student is the borrower. This is another get it before it’s gone types of aid. Not everyone who qualifies will get it so make sure you are applying early. The max loan amount is $5,500 per year not to exceed $27,500 as an undergraduate. If you are a graduate student you may be eligible for more. Check the link above for more info. This is a nice loan if you can get it because the interest rate is only 5% and there are no fees or other charges to get the loan.
- Need based loan
- Not all colleges participate
- The college is the lender
- 5% interest
- $5,500 a year for undergraduates; or a total of up to $27,500
Pay attention to these loans because they are likely to show up on most financial aid awards. These are offered by the US Dept. of Education and awarded by the college. The student is the borrower. The Subsidized loan is need based aid and interest does not accrue while the student is in college, The US Dept. of Ed. pays the interest while in school. Repayment begins 6 months after the student leaves school. The Unsubsidized loan is NOT need based. Interest does accrue as soon as the loan is taken out but repayment does not begin until 6 months after the student leaves school. The current interest rate on these loans is only 3.86% and loan fee is %1.072%
- Offered by the US Dept. of Education and awarded by the college
- Need based loan – Subsidized (deferred interest) and
- Not need based – Unsubsidized (interest accrues while the student is still in school)
- 3.86% interest for both types of loans
- Loan amount is determined by the college and the maximum depends upon grade level. See chart below
Dependent Students (except students whose parents are unable to obtain PLUS Loans)
Independent Students (and dependent undergraduate students whose parents are unable to obtain PLUS Loans)
First-Year Undergraduate Annual Loan Limit $5,500—No more than $3,500 of this amount may be in subsidized loans. $9,500—No more than $3,500 of this amount may be in subsidized loans. Second-Year Undergraduate Annual Loan Limit $6,500—No more than $4,500 of this amount may be in subsidized loans. $10,500—No more than $4,500 of this amount may be in subsidized loans. Third-Year and Beyond Undergraduate Annual Loan Limit $7,500—No more than $5,500 of this amount may be in subsidized loans. $12,500—No more than $5,500 of this amount may be in subsidized loans. Graduate or Professional Students Annual Loan Limit Not Applicable (all graduate and professional students are considered independent) $20,500 (unsubsidized only) Subsidized and unsubsidized aggregate loan limits $31,000—No more than $23,000 of this amount may be in subsidized loans. $57,500 for undergraduates—No more than $23,000 of this amount may be in subsidized loans.$138,500 for graduate or professional students—No more than $65,500 of this amount may be in subsidized loans. The graduate aggregate limit includes all federal loans received for undergraduate study.
PLUS Loans are provided by the US Dept. of Education. The parent (or graduate student) is the borrower. The maximum loan amount is the cost of attendance less any financial aid received. This loan will not automatically show up as part of the financial aid award that you will receive from the college like the Direct loans will. You will have to contact the financial aid office at the college for instructions on applying for this loan. The current interest rate is 6.41% and there is a loan origination fee of 4.288%. As a parent, once the loan has been distributed, you will have to begin loan payments but there are options on payment plans as well as an opportunity to contact the loan servicer to ask for a deferment on the payment plan until your student is out of college.
- Not a need based loan
- This is a loan for parents of dependent undergraduate students
- 6.41% interest and a 4.204% loan origination fee
- Maximum loan amount is the cost of attendance minus any other financial aid the student receives
Federal student aid may be an important part of how you pay for college. Make sure you are thorough. Check each opportunity carefully. DO NOT LOSE federal aid by being sloppy or careless!