Types of Financial Aid
When we say types of financial aid, we are actually referring to types and sources of financial aid. There are a few basic types: student loans, grants, work and scholarships. Sources of financial aid include the federal government, state governments, banks, colleges, employers and private scholarship providers. Let’s take a minute to go over each one.
Federal Student Aid
Federal Pell Grant
- Available to the neediest students only
- Up to $5,645 for the 2013/2014 award year
- Eligibility based on EFC of zero to 5,081 for the 2013/2014 award year
Federal Supplemental Education Opportunity Grant
- Available to the most needy undergraduates only
- Up to $4,000
- Based on EFC and student must usually be Pell eligible
- Not avaialbe at all schools
- Financial aid office at school determines eligibility and amount
Teacher Education Assistance for College and Higher Education (TEACH) Grant
- Up to $4,000 annually but reduced currently to $3,760 due to sequestraton
- Available to undergraduate, postbaccalaureate, or grad students who are or will be studying to become an elementary or secondary school teacher
- Must work four years (within eight of graduating) full-time in a high need field at a school or educational service agency which serves low-income students
- Must attend a participating college or university
- Must meet academic requirements
- If student fails to conclude service component, grant will be converted into a Direct Unsubsidized Student Loan that must be repaid
- Program information can be found at www.teachgrant.ed.gov
Iraq and Afghanistan Service Grant
- Up to $5080.50 for the 2013/2014 academic year. The maximum amount in 2013/2014 is 90% of the Pell grant maximum. The 10% reduction is due to sequestration.
- Available to students who lost a parent or guardian during military service in Iraq or Afghanistan after 9/11
- Must have an EFC that makes him/her ineligible for a Pell grant
- Must be less than 24 years old or enrolled at least part time in college at the time of the parent's or guardian's death
Federal Work Study
- Available to students with financial need
- Net Federal Work Study Earnings may not exceed financial need
- Award is paid directly to the student in the form of a paycheck
- No less than federal minimum wage if hourly
- Subsidized – the government pays interest for you while you are enrolled half-time or more OR Unsubsidized – interest is accruing on a daily basis. You pay the interest or defer interest until you graduate or are no longer enrolled or not in deferment. However, you are not required to pay the interest until the loan enters repayment. Any unpaid interest will be added to the principal when the loan enters repayment.
- Fixed interest rate of 3.86 for undergraduates (subsidized or unsubsidized). Grad or professional students may only borrow unsubsidized and the rate is fixed at 5.41%
- 1.051% origination fee deducted from loan amount
- Up to 25 years to repay depending on total borrowed.
- Available to Undergraduate and Graduate Students.
- Range from $3,500 to $20,500 depending upon grade level. Graduate Health Professional loan limit is up to $38,500.
- Payment begins 6 months after you graduate or are enrolled on less than a half time basis.
- Available to needy undergraduate and graduate students
- The maximum amount an undergraduate student may borrow is $5,500 per award year; the maximum for a graduate or professional student is $8,000 per award year.
- School determines eligibility
- 5% fixed interest rate
- No interest charged while enrolled at least half time
- Payment begins 9 months after you graduate or are enrolled on less than a half time basis.
- Available to parents of undergraduate students
- Fixed interest rate of 6.41%
- 4.204% origination fee deducted from loan amount
- Must meet credit requirements
- May borrow up to the Cost of Attendance minus other financial aid including other loans
- Payment begins after the second disbursement of the loan
- Up to 25 years to repay if total borrowed amount exceeds $30,000. Ten years is the standard repayment term
- Available to graduate students.
- Fixed interest rate of 4.41%
- 4.204% origination fee deducted from loan amount
- Must meet credit requirements.
- May borrow up to the Cost of Attendance minus other financial aid including other loans.
- Payment begins after the second disbursement of the loan, but may be deferred while attending school half-time or more.
- Up to 25 years to repay if total borrowed amount exceeds $30,000. Ten years is the standard repayment term.
In all cases, your school’s financial aid office determines your eligibility for the above sources of assistance. Unless your school is a Direct Lending institution, you are free to select your lender.
Many states offer assistance to their residents or to non-residents studying at a college in their state. Assistance can come in the form of scholarships, grants and/or loans. Certain states have a specific application you must complete in order to be considered for assistance. Check with the financial aid office at your school to see what state aid programs are available.
Institutional Assistance (money supplied by the school you attend)
Institutional Assistance can come in the form of scholarships, grants, loans and/or work. Check with the financial aid office of the school you will be attending to see what you need to do to apply for this type of aid.
Private student loans are made directly to students by banks or other lenders. Students generally need a creditworthy co-signer. You can compare private student loans by using our LoanFinder™ tool on this site. Before borrowing a private student loan, you should use all other forms of financial aid first and borrow only what you need.
Thousands of scholarships , based on need, achievement, affiliation and/or a myriad of other criteria are awarded each year. One source to find scholarships is ScholarshipExperts.com . Their free search will match you to applicable awards. They also sponsor a number of scholarships that most students are eligible to apply to.
You should also check with your high school’s guidance office or you college’s financial aid office to see what awards are available locally or thought your school.
Check with your employer about tuition reimbursement or loan forgiveness programs
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