Financial aid is a critical consideration for many students headed to college. And with good reason.
The College Board reports the following costs for the 2009-2010 academic year:
- For public four-year institutions, in-state tuition and fees averaged $7,020, a 6.5 percent increase over last year
- For private four-year institutions, in-state tuition and fees averaged $26,273, a 4.4 percent increase over last year
Add room and board or out-of-state tuition expenses, and the cost of a college education can soar.
Grants, loans, scholarships and work-study programs can all be used to help pay for your college years. But, you must work diligently to find them, apply for them and land them.
It’s not likely that a single grant, loan or scholarship will completely pay for your college education. Instead, you’ll need to combine these financial resources to cover as much of the cost as possible. So even though a $750 grant might not sound like much money, combined with other financial aid, the funds add up fast.
Before you begin searching for financial aid, follow these dos and don’ts.
Do:
- Talk to your high school guidance counselor about financial aid programs
- Talk to the financial aid administrator at your college
- Apply for financial aid during every year while you’re in college
- Apply for as many grants and scholarships as possible
Don’t:
- Assume that you can’t qualify for financial aid
- Try to negotiate with a school to provide you with more financial aid or a lower tuition rate
- Wait to apply for financial aid; much of the aid is distributed on a first-come, first-serve basis
- Get scammed by an unscrupulous company that promises to find financial aid for you; check out any organization that charges money to assist you
Federal Student Aid: Free Application
Your first step in finding financial aid should be to complete the Free Application for Federal Student Aid, or FAFSA.
The FAFSA is used to apply for federal student aid such as grants, student loans and college work-study. Most states and colleges use FAFSA information to award their financial aid.
You can complete the application online at www.fafsa.ed.gov. The Web site walks you through the entire process.
The college financial aid office will tell you how much aid you’re eligible to receive. Your eligibility for financial aid depends on a number of factors:
- Expected Family Contribution (EFC)
- Your year in school
- Your enrollment status
- Cost of attendance at the school where you’re admitted
For more information on eligibility, read “Funding Education Beyond High School: The Guide to Federal Student Aid.” It’s online at www.studentaid.ed.gov/students/publications/student_guide/index.html.
Be sure to look closely at the deadlines for the FAFSA. And be aware that deadlines for your state or your college may be different than the federal deadlines. In addition, some states and colleges may require you to complete additional financial aid forms.
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Federal Student Aid Programs: Loans
Unlike grants, financial aid loans must be repaid.
With loans, you are borrowing money and paying interest on the borrowed money. The full loan amount must be repaid according to the terms of the loan.
There are three major federal loan programs available: Perkins Loans, Stafford Loans and PLUS Loans for Parents. You can find details about each type of loan at the Federal Student Aid Web site, www.studentaid.ed.gov/PORTALSWebApp/students/english/index.jsp.
1. Federal Perkins Loan
These loans are made through participating schools. Full-time or part-time undergraduates can receive up to $5,500 a year, with a maximum of $27,500 during your time as an undergraduate. The amount you can receive depends upon your financial need, amount of other financial aid and the availability of funds at your school. Generally, these loans go to students who demonstrate the greatest financial need, and Federal Pell Grant recipients get top priority. Depending on the amount you borrow, you have up to 10 years to repay the loan to your school.
2. Stafford Loans
The U.S. Department of Education administers the Federal Family Education Loan (FFEL) Program and the William D. Ford Federal Direct Loan (Direct Loan) Program. Both the FFEL and Direct Loan programs consist of what are generally known as Stafford Loans for students.
Schools generally participate in either the FFEL or Direct Loan program but sometimes participate in both.
Under the Direct Loan Program, the funds for your loan come directly from the federal government. Funds for your FFEL will come from a bank, credit union or other lender that participates in the program. Eligibility rules and loan amounts are identical under both programs, but repayment plans differ. How much you can borrow will depend on a number of factors.
For either type of loan, you must fill out a Free Application for Federal Student Aid (FAFSA). After your FAFSA is processed, your school will review the results and will inform you about your loan eligibility.
3. PLUS Loans for Parents
Parents of dependent undergraduate students enrolled at least part-time may apply for a PLUS Loan. Parents must not have negative credit history.
The maximum amount of the loan is calculated by subtracting other financial aid the student receives from the student’s cost of college attendance.
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Federal Student Aid Programs: Grants
Unlike loans, grants don’t have to be repaid.
Although a single grant probably won’t cover the entire cost of a school year, you can receive any number of different grants that, combined, can significantly reduce your expenses. And there are numerous grants available.
A great resource for learning about grants is available at the Federal Student Aid Web site, www.studentaid.ed.gov/PORTALSWebApp/students/english/grants.jsp. Here are a few grants you’ll find at the site.
1. Federal Pell Grant
Pell Grants are usually awarded only to undergraduate students who have not earned a bachelor’s or a professional degree. Pell Grants are considered a foundation of federal financial aid, to which aid from other federal and nonfederal sources might be added.
The maximum Pell Grant award for the 2010-2011 school year (July 1, 2010, to June 30, 2011) is $5,550. The maximum can change each award year and depends on program funding. The amount you get, though, will depend not only on your financial need, but also on your costs to attend school, your status as a full-time or part-time student, and your plans to attend school for a full academic year or less.
Your school can apply Pell Grant funds to your school costs, pay you directly (usually by check), or combine these methods. The school must tell you in writing how much your award will be and how and when you’ll be paid.
2. Campus-Based Aid
The Federal Supplemental Educational Opportunity Grant (FSEOG) and Federal Work-Study (FWS) are called campus-based programs. They’re administered directly by the financial aid office at each participating college. Not all schools participate in both programs. Check with your school’s financial aid office for more information.
FSEOG awards range from $100 and $4,000 a year, depending on when you apply, your financial need, the funding at the school you’re attending, and the policies of the financial aid office at your school.
Under the FWS Program, you can work part time to earn money for your education. The FWS Program:
- Provides part-time employment while you are enrolled in school.
- Helps pay your educational expenses.
- Is available to undergraduate and graduate students.
- Is available to full-time or part-time students.
- Is administered by schools participating in the FWS Program.
- Encourages community service work and work related to your course of study, whenever possible.
You’ll earn at least the current federal minimum wage. However, the amount might be higher depending on the job available. Your total FWS award depends on:
- When you apply
- Your level of financial need
- Your school’s funding level
3. The Academic Competitiveness Grant
An Academic Competitiveness Grant will provide up to $750 for the first year of undergraduate study and up to $1,300 for the second year of undergraduate study to full-time students who are eligible for a Federal Pell Grant and who had successfully completed a rigorous high school program, as determined by the state or local education agency and recognized by the Secretary of Education. Second year students must maintain a cumulative grade point average (GPA) of at least 3.0.
4. National SMART Grant
The National Science and Mathematics Access to Retain Talent Grant, also known as the National SMART Grant, provides up to $4,000 for each of the third and fourth years of undergraduate study to full-time students who are eligible for a Federal Pell Grant and who are majoring in physical, life, or computer sciences, mathematics, technology, or engineering or in a foreign language determined critical to national security.
5. Institutional Grants
Colleges provide institutional grants to help make up the difference between college costs and what a family can be expected to contribute through income, savings, loans, and student earnings. Talk to the financial aid administrator at your college for more information.
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Scholarships
Like grants, scholarships don’t have to be repaid. There are thousands of them available.
Who hands out scholarships? Here’s just a short list:
- Churches
- Local civic organizations, such as Rotary and Lions clubs, often offer scholarships for students in the community whether or not your parents are members
- Volunteer groups, like garden clubs
- Ethnic-based organizations, such as HispanicScholar.org
- Fraternal organizations
- Private endowments that give scholarships based on where you live
- National and state associations, especially those which your parents are members of
- Foundations
- Unions
- State departments of education
Corporations can be a great source of scholarships, too.
For instance, Northrop Grumman Electronic Systems offers the Northrop Grumman Engineering Scholars Program, which awards multiple $10,000 scholarships annually. This scholarship program is intended to support promising high school seniors who intend to pursue a career in an engineering-related field and who live in communities where Electronic Systems is a major presence.
Many colleges offer matching scholarships. In these programs, the school will provide additional scholarship funds to students who receive a scholarship from another organization.
For example, Bethel College in Indiana offers a Church Matching Scholarship – a dollar-for-dollar match of scholarships provided to students by their church. Award value is $1,000 per year for on-campus students and $250 per year for off-campus students.
Another example: At the School of Visual Arts (SVA) in New York City, matching scholarships are available for undergraduate and graduate students. SVA will match 25 percent of any outside scholarship, up to $2,500, that a student obtains for enrollment at SVA.
Competition scholarships are also available. These scholarships are awarded based on a student’s performance.
Some of these, such as athletic and community service scholarships, take into account your performance during high school.
Others are a based on a single competition in which students participate. In this group, essay scholarships are a possibility if you can work magic with words.
For instance, The Holocaust Remembrance Project is a national essay contest for high school students that’s designed to encourage and promote the study of the Holocaust. First place winners participate in an all-expense-paid trip to a leading Holocaust museum and receive a scholarship ranging from $2,500 to $5,000.
A variety of competition scholarships are also available for students who excel in:
- Music
- Drama
- Fine art
- Dance
- Debate
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Finding Scholarships
Some schools have extensive information about available scholarships on their Web sites. Your college’s financial aid administrator can also help you locate scholarships.
And don’t bypass scholarship search sites on the Web. They’re packed with information. And they’re free.
Here are a few to get you started.
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7 Tips For Getting Grants and Scholarships
- Don’t depend on the college financial aid office for all of your scholarship and grant information. Go to the library and do your research. Search on the Web.
- Start your search early so you have plenty of time to research your options, get the information you need and meet the application deadlines.
- Begin by looking for scholarships and grants in your own backyard. Talk to your high school guidance counselor about scholarships offered by local organizations. These scholarships are often not well publicized, which means fewer students competing for the prizes.
- Read the eligibility requirements carefully. Make sure you qualify.
- Get your paperwork together. Many applications require that you provide documents such as standardized test scores, high school transcript, parent’s financial information and letters of recommendation.
- Complete the application thoroughly and neatly.
- Pay attention to deadlines. Don’t miss them.
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