Federal Student Aid in Details
Federal student aid is the financial help for eligible students offered by the federal government to pay for tuition expenses at an eligible school (e.g. college, trade school). Federal student aid covers such expenses as tuition, room and board, books and school supplies. In addition it can be used to pay for other expenses including travel (e.g. to travel during school breaks), cell phone and equipment (e.g. printer, computer, etc.). Table 1 provides a description of common costs.
Table 1.
Description of costs by selected expenditure items
| Item | Description |
| Tuition | The cost of taking a course varies from school to school. |
| Room and board | The cost of lodging and food varies from school to school. |
| Books and school supplies | Books can be expensive. School supplies can include book bags, notebooks, pens, pencils, paper, folders, stapler, desk organizing system (trays, pen holder, etc.), computer paper, etc.According to the College Board, the national average cost for textbooks at four-year public colleges in 2009–10 was $1,122. |
| Fees | Fees will depend on the school you’re attending. This list can be obtained directly from the school. Fees include activity fees, parking decal fees, etc. |
| Equipment and room materials | Equipment may include a computer, printer, etc. Furnishings or room materials may include such items as reading lamps, microwave, refrigerator, sheets, towels, etc. |
| Travel and miscellaneous expenses | If you live on campus, you’ll probably need to travel during school breaks. Other expenses can include clothing and cell phone use. |
Source: Your Federal Student Loans. Learn the Basics and Manage Your Debt. Report by the U.S. Department of Education.
There are three types of federal student financial aid: grants, work-study, and loans.
Who Gets Federal Student Aid?
In order to be able to receive federal funding it’s necessary to meet eligibility requirements. The most basic requirements are:
- demonstrate financial need (except for certain federal loans),
- be U.S. citizen or an eligible noncitizen,
- have a valid SSN (Social Security Number)
Eligibility requirements may vary depending on each category of federal student aid. Full list of all requirements for particular aid can be found at: www.studentaid.ed.gov
How to Apply for Federal Student Aid? Follow these steps:
There are three main steps toward getting Federal Student Aid and defining how much funding you’re eligible for. Applying for Federal Student Aid is free.
1. Complete the Free Application for Federal Student Aid (FAFSA).
The FAFSA can be completed online at: www.fafsa.gov. Applying online is the easiest way preferred by the most of the students. Built in logic system for asking relevant questions and checking errors, makes the application process simpler and faster.
There are other ways to complete and submit a FAFSA: PDF format or using paper. If you need a paper FAFSA, you can download it from www.fafsa.gov or request a paper form by calling the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).
2. Review your Student Aid Report (SAR).
After the application step is completed, within a few days you will receive a Student Aid Report also called SAR sent by the U.S. Department of Education. It contains the information from your FAFSA. Review the information in your SAR and check if there are any errors. Make changes if needed and submit the report for reprocessing. The school(s) you list on your FAFSA will get your SAR data electronically.
3. Receive an Award letter.
Each school’s financial aid office will send you an award letter containing the information about what type of aid you’re eligible for plus the amount of funding can be received from federal, state, and school sources. This combination of aid is also known as financial aid or award package.
Compare all award letters from schools you received and decide which school to attend. Take into consideration the aid you will receive and make a decision whether it is affordable or not.
Federal Student Aid Process
The Federal Student Aid process can be divided into four phases from the beginning (when a student is looking for useful information) to the end (when it’s received or must be repaid). Find more information about each phase in Table 2.
Table 2.
Federal Student Aid process: In summary
| Phase 1 | Phase 2 | Phase 3 | Phase 4 |
|
PREPARE |
APPLY |
RECEIVE |
REPAY |
| Our website provides you all necessary information about federal student aid. Gather as much information as possible to be well-informed and have the strategy of right applying. | The application process is simple and available online. | Receive funding you’re eligible for and finance your education. | If your aid is offered in the form of a loan, learn more about repayment process on our website. |
Source: Funding Education Beyond High School. The guide to Federal Student Aid | 2011-2012. Report by the U.S. Department of Education.
Types of Federal Student Aid
There are three types of federal student aid:
- Grants – student aid in the form of free funding that doesn’t have to be repaid.
- Work-Study – the program allowing working to earn money for education.
- Loans – funding that can be borrowed but must be repaid, with interest (as any other loans – e.g. car loans).
Grants
There are four types of federal student aid grants:
- Federal Pell Grant
- Federal Supplemental Educational Opportunity Grant (FSEOG)
- Teacher Education Assistance for College and Higher Education (TEACH) Grant
- Iraq and Afghanistan Service Grant
It’s not required to repay grants. However in most cases grants are awarded to students who demonstrate financial need.
Work-Study
Federal Work-Study (FWS) program is a perfect opportunity for students to earn money for education working part-time. It’s available to undergraduate and graduate, full-time and part-time students.
The Federal Work-Study Program is designed for students with financial need and provides jobs for such students. Jobs can be on or off campus depending on employer. If you work on campus, you will usually work for the school. If you work off campus, you will usually work for private nonprofit organization.
It’s important to notice that the FWS Program provides employment in civic education and if it’s possible in spheres related to the education.
Loans
Federal student loans are real loans (like home mortgages). Unlike grants and work-study, federal loans must be repaid (with interest).
There are four types of Federal student loans:
- Federal Perkins Loans
- Federal Stafford Loans
- Direct PLUS Loans
- Direct Consolidation Loans
Federal loans, unlike loans by private lenders (e.g. Sallie Mae), are the cheapest ways of college funding. Remember, apply for federal student aid first and maximize sources you don’t have to repay. Table 3 shows the right strategy of applying.
Table 3.
Sources of financial aid
|
Ways To Fund College Education |
|
| DO NOT HAVE TO REPAY | Scholarships and Grants |
| Savings and Word-Study Earnings | |
| HAVE TO REPAY | Cheap option:Federal Loans
|
Expensive option:
|
|
Source: According to www.studentaid.ed.gov
Federal Student Aid Summary
|
Federal Student Aid Program |
Type of Aid |
Details |
Award Limits |
| Federal Pell Grant | Grant: does not have to be repaid | Available almost exclusively to undergraduates | $609–$5,550 for 2010–11 |
| Federal Supplemental Educational Opportunity Grant (FSEOG) | Grant: does not have to be repaid | For undergraduates with exceptional financial need; priority is given to Federal Pell Grant recipients; funds depend on availability at school | $4,000 |
| Teacher Education Assistance for College and Higher Education Grant (TEACH) | Grant: does not have to be repaid | For undergraduate, post-baccalaureate, and graduate students who are taking or will be taking course work necessary to become an elementary or secondary school teacher | $4,000 |
| Iraq and Afghanistan Service Grant | Grant: does not have to be repaid | For students who are not Pell-eligible; whose parent or guardian died as a result of military service in Iraq or Afghanistan after Sept. 11, 2001; and who, at the time of the parent’s or guardian’s death, were less than 24 years old or were enrolled at least part-time at an institution of higher education | Maximum is same as Pell maximum |
| Federal Work-Study | Money is earned while attending school; does not have to be repaid | For undergraduate and graduate students; jobs can be on campus or off campus; students are paid at least minimum wage | No annual minimum or maximum amounts |
| Federal Perkins Loan | Loan: must be repaid | For both undergraduate and graduate students who demonstrate financial need; payment is owed to the school that made the loanInterest rate: 5% | Undergraduate students: up to $5,500 a year. Graduate and professional students: up to $8,000 a year |
| Direct Stafford Loan (Subsidized) | Loan: must be repaid | For undergraduate and graduate students enrolled at least half-time demonstrating financial need. Interest rate (undergraduate students): 3.4-6.8%. Interest rate (graduate students): 6.8% | $3,500–$8,500 |
| Direct Stafford Loan (Unsubsidized) | Loan: must be repaid | For undergraduate and graduate students enrolled at least half-time. Financial need is not required. Interest rate: 6.8% | $5,500–$20,500 (less any subsidized amount received for the same period) |
| Direct PLUS Loan | Loan: must be repaid | For parents and graduate and Professional degree students. Financial need is not required. Interest rate: 7.9% | Cost of attendance (determined by the school) minus any other financial aid received; there is no minimum amount |
- Federal student loans types
- Guaranteed student loans with no cosigner
- How to apply for student loans with bad credit
- Personal loans for college students
