Understanding Financial Aid

Many students receive financial aid to help pay for college. Families are expected to contribute to the student’s education, even if the contribution is a small one. Most families use a combination of resources to help pay for college that includes:

• • • Money that has been saved over time

    • A portion of current income

    • The student’s part-time job and summer earnings

    • Financial aid

    • Other resources

Money for college is available through a variety of means, but you have to be purposeful about applying. Research and good planning can make a difference in the amount and types of aid you receive. Your junior year is the opportune time to research, plan, and prepare items that may be required when applying. While most scholarship opportunities take place during senior year, there are some scholarships that are offered for juniors.

Many types of financial aid are available and how they are categorized will depend on the institution, publication, or website. What is most important is to familiarize yourself with all the types of financial aid opportunities and requirements so that you can apply.

Federal Student Aid

Federal Student Aid from the U.S. Department of Education is the largest source of aid in America, providing more than $150 billion in grants, work-study, and federal loans for students attending four-year colleges or universities, community colleges, and career schools. Use the FAFSA4Caster to estimate your federal student aid eligibility.

Private and Corporate Grants and Scholarships

These scholarships provide financial aid that does not have to be repaid. The provider sets the criteria for the grant/scholarship. Using search engines that match your profile to these grants and scholarships is a good way to get started. Another source of private scholarships is those offered by local businesses, organizations, and associations. These target graduates in your city, which reduces the number of applicants. Ask if your parents’ employers offer any scholarships. The following are some examples of corporations that sponsor scholarships:

• • • Coca Cola

    • Microsoft

    • Wal-Mart

    • Best Buy

    • Toyota

    • Dell Scholars Program

State and Federal Grants and Scholarships

These scholarships provide financial aid that does not have to be repaid. Most of these grants and scholarships are need-based, and some may require that the student maintain a certain grade point average. Some examples are:

• • • Federal Pell Grant

    • Federal Supplemental Educational Opportunity Grant (FSEOG)

    • State grants are awarded by individual states for students graduating from a high school in that state. Check with your state department of education for specific grants and/or scholarships they may offer. Here are some examples:

    • CALIFORNIA: Cal Grant A, Cal Grant B, Cal Grant C, California Chafee Grant for Foster Youth

    • FLORIDA: Florida Bright Futures Scholarship Program, Florida Resident Access Grant, Access to Better Learning and Education (ABLE)

    • MARYLAND: Howard P. Rawlings Guaranteed Access Grant, Howard P. Rawlings Educational Assistance Grant

    • TEXAS: TEXAS Grant, Texas Educational Opportunity Grant

Institutional Grants and Scholarships

These scholarships provide financial aid that does not have to be repaid. They are provided by the college or university to make up the difference between the cost of attending and the family’s ability to contribute. Other institutional grants and scholarships may be merit awards based on a student’s academic achievement. As you narrow your list of colleges, check for the types of institutional grants and scholarships your colleges of interest offer.

Self Help Aid

Self Help Aid is financial aid awards that a student must either repay or work for the assistance. These are in the form of loans and work-study.

Student Loans

Loans have to be repaid. There are two key words: subsidized and unsubsidized. Subsidized loans are essentially interest-free until you finish school OR are not a full-time student for six months. (If you leave school, six months later you are expected to start paying back the loans.) Unsubsidized loans accrue interest while you are in school, even though you do not start paying them back until six months after you are out of school, finished or not.

Parent Loans

These loans are given to parents of college students to help pay for college costs and must be repaid. Both private and federal parent loans are available.

Loan Forgiveness and Repayment

Loan forgiveness and repayment programs will repay or forgive a percentage of a student’s loan after a specific work commitment has been completed. Students must work in a specific field or job in an undeserved area of the country. Examples are:

• • • National Health Service Corps

    • Federal Teacher Loan Forgiveness Program

    • Outstanding Rural Scholar Program

    • Peace Corps

    • Equal Justice Works

Work-Study

A college work-study is employment through a college’s financial aid office. Employment will typically be on campus, helping with research, working in a business office, or almost anywhere that the need arises, and you will be paid by the school. Off-campus employment opportunities exist, also.