Student Aid Availability
Students received more than $227 billion to help fund their college educations during
the 2010–2011 academic year. Student aid is awarded as
grants and scholarships,
education tax benefits,
and nearly everyone is eligible for some of it.
To apply for most aid, you must first complete a
federal student aid application (FAFSA).
The U.S. Department of Education processes your request and tells you what the federal
government expects your family to contribute towards paying for college. Then, the
colleges to which you apply will determine how much federal, state, and college-specific
aid you'll receive. Keep in mind, your student aid awards are likely to vary from
college to college.
Federal Student Aid
Most student aid is federal aid – people's tax dollars working for you. Students
received more than $154.3 billion in federal aid during the 2010–2011 academic
year. Most federal student aid is awarded as grants and low-interest loans. Grant
programs include the
Pell Grant and
TEACH Grant. Grants are best because they are "free money" – you don't repay them as
long as you meet any obligations they may have.
federal loan programs
include the Federal Direct
and Federal Direct
Unlike with federal grants, a borrower must repay the loan amount and any interest.
Federal loans offer lower interest rates and better repayment terms than private
student loans from banks and other financial institutions.
Students (or their parents/guardians) should take advantage of education tax benefits
to ease the financial burden of attending college. Education tax benefits added
up to more than $14.8 billion in 2010–2011. Tax-based education programs include
American Opportunity Tax Credit
Lifetime Learning Tax Credit.
These programs reduce a student's (or his or her parents'/guardians') taxable income
while the student attends college. That means more money in your pocket.
State-Based Student Aid
In addition to federal student aid, you may be eligible for
States provide students more than $9.2 billion of aid every year. Each state aid
program is different. Usually, you must reside and attend college in the state providing
you aid. In some cases, you can spend state aid on colleges in neighboring states.
Other Sources of Aid
Governments aren't the only aid sources. Nearly $48.9 billion of private aid comes
from colleges, employers, corporations, and other organizations. Learn more about
other types of student aid