Options Available to Pay for College
For those who are considering attending college, there are many federal grants for college expenses that are available to those who qualify. There are also student loans that can be used to help pay for college expenses. Federal grants and student loans can be used to help pay tuition, fees, textbooks, and other related college costs.
Student loans must be repaid and usually the student pays interest on the student loan. Student can make payments on the student loan while attending college if it is desired. Students must start making payments on student loans after being out of school for a six-month period.
Grants Available to College Students
Federal grants for college are awarded by the federal government and are free to the student. These federal grants do not have to be repaid by the student. Of course everyone would like to receive grants instead of using student loans to pay for college costs. Federal grants available to those who qualify include the Pell grant, Federal Supplemental Educational Opportunity Grant ((FSEOG), Teacher Education Assistance for College and Higher Education Grant (TEACH Grant), the Iraq and Afghanistan Service Grant, and the ACG and SMART grants.
The Pell grant is the foundation of federal student financial aid. Other aid from other sources such as other grants and loans are added to the amount of Pell grant a student qualifies for when determining a student’s total financial aid package. The Pell grand does not have to be repaid. You must be enrolled at least half-time in a program that leads to a certificate, diploma, associate or bachelor’s degree.
Generally, the Pell grant is awarded only to undergraduate students who have not earned a bachelor’s or graduate degree, but in some cases, it might be possible to receive a Pell grant if you’re enrolled in a post-baccalaureate teacher education certificate program.
The Federal Supplemental Educational Grant (SEOG) is a federal grant that is awarded to undergraduate students who have exceptional financial need. This is determined by the lowest expected family contribution or EFC. The amount of Federal Supplemental Educational Opportunity Grant that you receive depends on your financial need and also on the other aid you receive and the funds available at your college.
If you receive other aid, it might reduce the amount of Federal Supplemental Educational Opportunity Grant you receive. Due to limited funds, not everyone who qualifies for the Federal Supplemental Educational Opportunity Grant will receive one. It is important to complete the financial aid application process as early as possible each year.
There is also the Teacher Education Assistance for College and Higher Education (TEACH) Grant. The TEACH grant does not have to be repaid unless the student fails to carry out the service obligation of the grant. This grant is for undergraduate, post-baccalaureate, and graduate students who are taking work necessary to become an elementary or secondary teacher. Recipients must sign an agreement promising to teach at a high-need field for four academic years at a low-income school.
Afghanistan Service Grant
For students who are not pell-eligible, there is the Iraq and Afghanistan Service Grant to help with college costs. Eligible students are those whose parent or guardian died in military service in Iraq or Afghanistan after September 11, 2001, and who were less than 24 years old at the time of the death of their parent or guardian or were enrolled at least part-time in a college.
Another type of grant available to college students is the Academic Competitiveness Grant (ACG) and the National Science and Mathematics Access to Retain Talent Grant (National SMART Grant). These two grants are available to eligible students during their first and second academic years of college.
To be eligible for the ACG or SMART grant, students must complete a rigorous high school curriculum. Students must have specific GPA’s and the courses completed in high school must include a specific number of math, science, technology and foreign language courses.
These grants are awarded to all students who qualify, and they are not based on a student’s income level or EFC. More Information about these two grants is available by talking with a high school guidance counselor of your high school.
There are also various state based grants that are available to college students. The financial aid administrator at your college can explain the type of state grant that might be available to you. When you apply for the pell grant by completing the FAFSA, you are also applying for the state grant.
There is also a Federal Work-Study Program available to help pay for college costs. The work-study program is a program which provides the students with a part-time job. Students can usually work up to twenty hours each week and the wages are reimbursed by the federal government. Work-study jobs can be on campus or off campus and students are paid at least the federal minimum wage. Usually, the type of work study positions available is related to the student’s program major.
Requirements for Federal Financial Aid
Most people are eligible for one of the financial aid programs available, including federal grants and student loans. However, in order to be eligible for financial aid, the federal government requires that you must be a U.S. citizen, a U.S. national or an eligible non-citizen. You must also have a valid social security number and have either a high school diploma or a GED.
Male students must be registered with the United States Selective Service if they are a male aged 18-25. Additionally, you can’t owe a refund on any past federal student grants and cannot be in default on any past student loans. If you have been found guilty on the sale or possession of illegal drugs during a time period in which you received financial aid, you will not be eligible to receive federal financial aid.
Getting More than Grants
Because the government funding used to pay the federal grants is limited, usually the amount of grants a student receives does not pay for the entire cost of tuition and fees and other college costs. A first-year college student usually does not receive as much grant aid as they do in later years of enrollment in college. Federal grants are based upon financial need which is calculated by the federal aid program.
When you apply for a federal grant, a needs analysis is completed by the government or the college to determine the expected contribution of the student and that of the student’s parents. This expected contribution amount affects the amount of federal grants that are available or awarded to the student. The amount of pell grant a college student could receive ranges from $609 to $5,550 per student for the 2010-11 financial aid award year. The amount of pell grant each college student is awarded varies and is based upon the student’s financial need.
Federal Grant Application Process
The first step in applying for federal grants for college costs is to complete the Free Application for Federal Student Aid or FAFSA form. By completing the FAFSA, you will be applying for state grants, federal grants, loans, and other programs all with the completion of one application form. There is a deadline each year that all college students must follow and meet when completing the FAFSA. The FAFSA is also used to award state grants and there is also a deadline for the completion of the FAFSA in order to receive a state grant. You can file your FAFSA starting January 1 of each year.
Since the federal funds are limited and are available on a first-come basis to those who are eligible, it is important to complete your FAFSA as early as possible each year. Missing a deadline can lessen opportunities for receiving financial aid. College students should check with their college’s financial aid administrators regarding the deadlines for the FAFSA, state grants, and other aid programs.
FAFSA Assistance Services
The FAFSA can be completed and filed for free online or the paper FAFSA form can be downloaded for completion. The online FAFSA is available online at www.studentaid.ed.gov. If you have questions during the process of completing the FAFSA, you can call 1.800.4.FED.AID or 1-800-433-3243.
There is also another financial aid resource and information resource available online at www.nasfaa.org. The www.nasfaa.org is made available by the National Association of Student Financial Aid Administrators (NASFAA) and this site can help students and parents understand financial aid issues. This site has worksheets and guides available to help in understanding the financial aid process.
Assistance with the FAFSA is also provided by College Goal Sunday. College Goal Sunday is a source of free on-site assistance
with the completion of the FAFSA form and has various locations throughout the United States. More information about their services at www.collegegoalssundayusa.org.
Getting a FAFSA Pin
You will need to apply for a PIN online as part of the process of completing a FAFSA online. The PIN is used to electronically sign the FAFSA before you submit it online. You can go to www.pin.ed.gov to apply for a PIN. If you previously had a PIN and have forgotten it, you can request a duplicate PIN at this site. If you are a dependent for financial aid purposes, your parents will also need to apply for a PIN.
There is also a free online tool to help provide you with early estimates of your eligibility for federal student aid. This free online tool is called FAFSA4caster and is available at www.fafsa.gov. The FAFSA4caster helps families plan ahead for college costs and is recommended for high school juniors.
You can find online federal student aid publications and other resources to help you at www.studentaid.ed.gov/pubs. Some of the federal publications available at this website include publications such as Completing the FAFSA, College Preparation Checklist, Funding Education Beyond High School, and many other helpful publications. Paper publications are also usually available to students who visit their college financial aid office.
Determination of Dependent or Independent Status
When the FAFSA questions are completed, some of the questions are designed to determine the student’s FAFSA dependency. The Department of Education uses specific criteria to determine whether a student is dependent or independent for financial aid purposes. If a student is determined to be dependent for financial aid purposes on the FAFSA, the student’s and the parents’ or legal guardian’s income is listed on the FAFSA. If a student is determined to be independent for financial aid purposes on the FAFSA, only the student’s income is listed on the FAFSA.
Many college students do not understand the dependency determination for financial aid purposes and feel that if they are no longer living at home with their parents, they should be considered independent on the FAFSA. The federal government uses only the specific criteria listed on the FAFSA to determine the student’s dependency or independent status. If you are determined for financial aid purposes to be a dependency status and you fail to provide your parents income information on the FAFSA, your FAFSA will be rejected when it is submitted.
Calculation of EFC
The FAFSA has numerous questions regarding the student’s and the student’s family’s assets, income and dependency. The information completed on the FAFSA is entered into a formula that uses federal government guidelines to determine the EFC or Expected Family Contribution.
Factors included in this formula include the number of people in the household, income, number of students in college in the household, and assets other than retirement funds such as a 401(k) fund. This EFC is used to determine the type and amounts of federal financial aid the student is eligible to receive. Generally, the lower the EFC, the higher the amount of federal grants a student can receive.
The Cost of Attendance or COA is the total annual cost of a college’s tuition and fees. This usually includes the cost of your textbooks, room and board costs, and transportation costs. Your financial aid eligibility is determined by subtracting your Expected Family Contribution (EFC) from your Cost of Attendance (COA). This formula determines your financial need. (COA – EFC = Need) When the FAFSA you submit is processed, it determines your need using this formula.
Unusual Family Circumstances
The EFC formula is the same for all federal financial aid applicants, but if you have unusual circumstances such as very high medical expenses or unemployment or other unusual situations, the financial aid administrator might be able to use professional judgment to adjust your cost of attendance or information used to calculate your EFC. In order to do this, your financial aid administrator will require additional documentation from you to support any of the adjustments.
It is important to share everything with your financial aid administrator about additional expenses such as nursing care costs, dependent care costs, unemployment, and other large expenses in similar areas.
Student Aid Report (SAR)
Once the FAFSA is submitted is processed by the Department of Education, you will receive a Student Aid Report (SAR). The EFC and other information will be listed on the Student Aid Report (SAR) that the Department of Education will send to you and to the financial aid administrators at the colleges listed on your FAFSA.
If you file a paper FAFSA, it could take as long as three or more weeks for you to receive the student aid report (SAR). If you file the FAFSA online at www.studentaid.ed.gov , you could receive the SAR in 3 to 10 days. If your FAFSA was incomplete or consisted of incorrect data, it could be rejected by the processing center.
Making FAFSA Corrections
If you need to make corrections to the data listed on your FAFSA, you can do so after the FAFSA has been fully processed. In order to make corrections to your FAFSA online, you will need your PIN. If you have lost your PIN, you can request a duplicate PIN by going to to www.pin.ed.gov.
If you are a dependent your parents will also need their PIN. Once you have your PIN, go to the FAFSA site to make online FAFSA corrections. You must complete all of the steps and receive the confirmation stamp in order for your FAFSA changes to be effective and to be processed.
Paper & Phone Corrections
You can also make paper FAFSA corrections. To do this, you will need to request a 10-page SAR by calling the Federal Student Aid Information Center at 1-800-433-3243. You should receive the 10-page SAR in the mail in about 7-10 business days. Find the data you need to correct on the SAR and sign the last page of the SAR and mail it back. There will be a post office box address printed near the signature line of the SAR.
FAFSA Corrections can also be made over the phone by calling 1-800-433-3243 and requesting to speak with someone in customer service. In order to make phone corrections, you will need your DRN number or Data Release Number. Your DRN number is located on your SAR .
You will need to verify your identity by providing your birth date, address, and social security number.
After you have made a FAFSA correction, you will receive a new Student Aid Report (SAR) which will list the new data and changes you submitted. If the changes in the corrections affected your Expected Family Contribution (EFC), the new EFC will be listed on the SAR. The new EFC could affect your eligibility in the type and amounts of financial aid.
Completion of the FAFSA Each Year
Each year in order to receive federal financial aid assistance, college students must complete a new FAFSA using their current income information listed on the new year’s 1040 Form. Because of this, the changes in the income for the new year could result in possible changes in a student’s eligibility in the type and amount of federal grants and other types of financial aid assistance that is available.
Just because a student receives a pell grant their first year of college does not guarantee that the student will continue to receive the same amount of pell grant award. It is important that the FAFSA application be submitted early each award year in order to ensure that all federal and state deadlines are met.
Getting the Most From the FAFSA
Omissions and errors in completing the FAFSA can cause you processing delays which could result in a missed deadline. This could cause you to miss out on part of the financial aid that you might otherwise be eligible for. It is very important that you submit your FAFSA as early as possible each year as this will allow you time for submitting possible corrections and still meet the deadlines.
Even if you might feel that you or your parents have a high salary that might make it impossible for you to qualify for financial aid, you should complete and submit a FAFSA. Because there are many different types of financial aid, including student loans and work study programs. You might be surprised at the amount of aid you qualify for once your FAFSA is processed.
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