Financial aid is a type of funding that allows students to pay for tuition and fees. These come in the form of public or private scholarships, loans, and work-study programs from federal and state agencies, private institutions, foundations, and universities.
According to a 2021 survey by Sallie Mae and Ipsos, families spend close to $27,000 during the 2021-21 school years, of which roughly 49% came from financial aid.
The three types of federal student aid you can apply for are grants, loans, and work-study funds.
Federal grants are awarded based on need and do not need to be repaid. The most popular type of federal student aid is the Pell Grant, which is awarded based on a family’s income as calculated in the FAFSA. The maximum family income-eligible for FAFSA payouts is $40,000. As of this writing, the maximum Pell Grant award is $6,345.
The second type of federal student aid, federal student loans, is a direct loan program by the government, offering fixed interest rate agreements on subsidized or unsubsidized loans that can reach up to $31,000 if classified as a dependent and up to $57,500 if classified as a non-dependent. Most students are dependents, so they qualify for federal student loans up to $31,000.
The last type of federal student financial aid, work-study funds, helps students cover college-related expenses with an on-campus or off-campus job. These jobs may include dormitory cooks, student center cashiers, researchers, or anything in between. Like federal grants and federal student loans, students need to show financial need in order to qualify for work study programs.
Remember, loans are borrowed money, the principal and interest of which needs to be paid back within a certain period of time.
Federal student aid can also be used to pay for miscellaneous expenses such as room and board, books, supplies, and other incidentals.
Note, many financial aid programs require that funds be allocated to in-state residents. Out-of-state residents may qualify for a lesser amount.
We highly recommend speaking with a high school counselor or enrollment advisor who can advise on all types of need-based and merit-based scholarships available to you. They may come from virtually anywhere, including places where you least expect them.
Applying for financial aid is all about adhering to deadlines. Although the federal deadline for 2022-2023 FAFSA submission is June 30, 2023, colleges and universities set their own deadlines. Many schools have December 15th deadlines and other schools have deadlines as late as March 1, with funds going into effect for the next academic year.
We highly recommend filing your FAFSA early. The earlier you file the FAFSA, the more grants and scholarships are available. Note, many come on a first-come, first-served basis.
If you miss the FAFSA filing deadline, then you will not be eligible to receive federal student aid for the upcoming academic year. In this case, you may still apply for public and private grants and scholarships, but the money pool becomes shallower then.
Please visit your school’s financial aid page or contact an enrollment advisor for your school’s deadlines.
The first step in qualifying for financial aid for college is to fill out the Free Application for Federal Student Aid (FAFSA). The FAFSA is an application used to apply for loans, grants, work study programs, and other types of aid.
Many colleges use FAFSA information to issue their own college or state-based financial aid.
To fill out the FAFSA, students must provide a social security number/permanent resident card, W2s, tax records, and other proof of income. It takes no more than 30 minutes to complete.
To learn more about FAFSA, visit FAFSA.gov.
There is no minimum income to qualify for financial aid. However, federal student aid is awarded fully or in part based on income. For example, Pell Grants determine payments based on a student’s Expected Family Contribution (EFC), Any families with less than $27,000 in gross annual income with a zero EFC are eligible to receive the maximum $6,496 in Pell Grant funding per year.
Other grants, like the Federal Supplemental Educational Opportunity Grant (FSEOG), are awarded to students who qualify for a Pell Grant and demonstrate great financial need. In this case, participating schools can contribute funds up to 25% of the total award.
To receive financial aid, students must be a U.S. citizen/U.S. national/green card holder, qualify for special status (e.g. refugee, granted asylum, etc), have a T-visa, or have a parent with a T-1 visa.
The FAFSA is the first step towards getting government financial aid for college. The form is filled out by the applicant, their parents or guardians, and then sent to your school of choice. It’s important to know that the FAFSA will cover federal aid only, not state-based aid.
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