Sources of Student Aid
Federal Aid
The federal government offers aid in the form of grants, loans, work-study, and
tax benefits. Over $109.7 billion of aid was given to students for the 2008–2009 school
year! To apply for federal aid, you must prepare a
federal student aid application (FAFSA).
Federal college
grants
include the Pell Grant, the Academic Competitiveness Grant (ACG), the Teacher Education
Assistance for College and Higher Education (TEACH) Grant, the Federal Supplemental
Educational Opportunity Grant (FSEOG), and the National Science and Mathematics
Access to Retain Talent (SMART) Grant.
Federal
loans
are government-backed loans that provide students in need with low interest rates
and repayment terms. Federal student loan programs include the Stafford Subsidized
Loan, the Stafford Unsubsidized Loan, and the Perkins Loan. For these programs,
the student is the borrower and responsible for repaying the loan. The Parent Loan
for Undergraduate Students (PLUS) is a federal loan that is available to parents
of dependent undergraduates. For this program, the parent is the borrower and responsible
for repaying the loan.
The Federal
Work-Study
Program gives undergraduate and graduate students the option to work part-time while
enrolled in college. Receiving income through a work-study program is a great way
to earn money throughout the year to help pay for books or other expenses.
Tax-based aid
provides tax breaks to students and/or parents who are paying for a college education.
Tax-based aid programs include the Hope Credit, the Lifetime Learning Tax Credit,
the American Opportunity Tax Credit, tuition and fees deductions, and student loan
interest deductions.
State-Based Aid
Similar to federal aid,
state student aid
comes in the form of grants, scholarships, work-study, and loans. Each state has
a unique set of programs to help families fund their college education. As a general
rule, state programs are available only to students who attend a college within
their state of residence.
College-Specific Aid
College-specific student aid is an important source of funds to help students pay
their college expenses. Many colleges use a portion of their endowment funds to
help students cover their cost of attendance.
Each college has complete control over the specific awarding criteria, so the best
way to find out if you are eligible to receive any college-specific student aid
is to contact the financial aid administrators at colleges you are interested in
attending.
Private Aid
Eligibility requirements for private student aid often include unique student characteristics
that are not considered by other forms of aid. Age, intended major, organization
membership, and disability are some of the more prevalent criteria.
Parents and students too often assume that they will receive plenty of
privately funded grants and scholarships,
but for the majority of students, that is not the case. Comparatively, private student
aid is a relatively small amount of funds distributed across a large number of students,
but it is definitely worthwhile to investigate private sources of student aid!
Employer Aid
Many companies provide employer grants in the form of tuition assistance programs
or supplemental compensation for their employees.
Employers sometimes offer tuition reimbursement in order to prepare younger employees
to succeed retirees. Some companies also extend benefits to employees who have dependents
pursuing college. Talk to a human resources representative at your place of employment
to find out if your company offers these forms of student aid.