It’s an excellent idea to begin exploring your financial options as soon as possible in your senior year of high school if you’re thinking about college or career school after you graduate. While most of us probably think first of an academic scholarship to pay for college, it pays not to overlook another possibility: Federal financial aid.
According to studentaid.ed.gov, a student aid gateway administered by the U.S. Department of Education, the Federal government remains the single largest source of student aid in America. Grants, work-study programs and loans – these are the three main student aid programs – account for more than 80 billion dollars a year in aid to high school grads who are willing to learn first in order to earn more later.
Having a good general overview of the three types of aid available from the Federal government is an essential prerequisite for filling out the FAFSA, also called the Free Application for Federal Student Aid. The process of qualifying for Federal student financial aid requires all high school grads to complete and submit a FAFSA application.
Student aid from the Federal government is delivered in three basic forms: grants, work-study programs, and loans. The different types of financial assistance differ in the amount of aid you may receive and whether or not the financial aid has to be repaid. Grants do not require repayment, nor do work-study programs, which pay an hourly wage or salary for work performed. Loans, on the other hand, must be repaid, just like a car loan or home mortgage, over a period that ranges from ten to twenty-five years.
There are several types of grant and loan programs within this general three-tiered framework of Federal financial aid. One of the best known types of grant, the Federal Pell Grant, is generally regarded as the foundation of the Federal student aid program. Other less well-known grants include the Federal Supplemental Educational Opportunity Grant (FSEOG), the Academic Competitiveness Grant (ACG), and the National Science and Mathematics Access to Retain Talent Grant, which is usually referred to as the National SMART Grant.
Loans, too, come in a variety of formats. The best-known type of loan is probably the direct Stafford loan, in which the lender is the Department of Education. Recipients of this type of financial aid have between ten and twenty-five years to repay the government, depending on the amount of the loan and payment plan selected.
With only a pair of exceptions, the amount of Federal student aid you can receive is determined by your financial need. The amount is calculated by subtracting your Expected Family Contribution, or EFC, from the cost of attendance at a college or career school. Using factors you supply on your FAFSA � including family income, family assets and benefits like unemployment and Social Security � your EFC is calculated according to a formula laid down in Federal law. The government informs you of your EFC on your Student Aid Report, or SAR. You’ll receive your SAR once the government has completed its review of your FAFSA application.
If all this sounds too intricate, the government has a number of outstanding resources to help you cut through the clutter. One exceptional resource is the website mentioned at the beginning of this article, studentaid.ed.gov. Another is “Funding Education Beyond High School”, a free 60-page document available in PDF format at www.fafsa.ed.gov. Delve into these resources as soon as possible during your senior year of high school in order to have the best possible chance of receiving Federal student aid.
