Federal Financial Aid
From LoveToKnow College
Although there are many different ways to pay for your college education, most students decide to use some form of federal financial aid. Funds from federal financial aid can be used to complete degree-granting programs at community colleges as well as both private and public colleges or universities. If you are interested in taking college courses online, you may be eligible for federal financial aid if the program has received the proper accreditation.
In the United States, federal financial aid programs are administered by the U.S. Department of Education. This organization distributes over $78 billion in college tuition assistance each year. In fact, nearly 60% of all currently enrolled students are receiving some form of federal financial aid.
Applying for Aid
To apply for federal financial aid, you’ll need to complete a FAFSA application for each year that you attend school. This application will ask for information about your income and assets in order to determine your Expected Family Contribution (EFC), a measurement of your financial need. Unless you meet the criteria to file as an independent student or file a Dependency Override Appeal, you’ll be required to base your answers on your parents’ most recent tax return as well as your own.
Only U.S. citizens or eligible non-citizens can receive federal tuition assistance. In addition, you must have a high school diploma or GED. According to the Higher Education Act of 1965, students who have been convicted of the sale or possession of illegal drugs can not receive aid from federal programs.
To maintain eligibility for federal financial aid, you must demonstrate satisfactory academic progress toward your degree. If you default on a federal student loan, you will not be allowed to continue to receive aid.
Types of Federal Financial Aid
There are several different types of federal financial aid. Depending upon your financial need, you may receive money from one program or from a combination of programs. You do not have to apply for a specific program; your FAFSA application is all that is required.
Federal Pell Grants are the largest source of aid for students with financial need. Students who receive Pell Grants may also be eligible for Federal Supplemental Educational Opportunity Grants (FSEOG) if they can demonstrate a significant amount of need. Beginning with the 2006-2007 academic year, students can also receive Academic Competitiveness Grants or National SMART Grants if they meet the necessary eligibility criteria. None of the money you receive from federal grants will need to be repaid.
Federal Work Study (FWS) funds are a form of self-help aid. Participants in this program must work at approved part-time jobs in exchange for their financial aid. If you are eligible for Federal Work Study, you can often attend a school-sponsored job fair to find employment opportunities.
There are two main types of student loans administered by the U.S. Department of Education: Federal Perkins Loans and Federal Stafford Loans. Loans can be either subsidized or unsubsidized. A subsidized loan is based on financial need and does not accrue interest until you graduate from school and begin to repay the loan. An unsubsidized loan is not based on financial need, but it begins to accrue interest as soon as you borrow the money.
In addition to the loans mentioned above, Federal PLUS Loans are available for parents who wish to borrow money to help pay for a child’s education.
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