Financial aid programs are broken into three general categories; grants, work study, and loans. In order to demonstrate eligibility for these programs, students and parents must complete the FAFSA. After the FAFSA is filed, the financial aid administrator at each college creates a financial aid package. This package can include grants and/or loans. Grants are considered gift aid, which does not have to be repaid and consists of need based grants and scholarships. Loans are borrowed money that must be paid back and there are various types of loans. The best contact for a family when applying for financial aid is the financial aid officer at each prospective college.
Federal Pell Grant
This grant is federally funded where the proceeds can be used to offset any of a student’s cost for college. This is a federal program that is available annually for very needy families. Not many suburban families qualify for this program.
Federal Work Study
The student may be offered an opportunity to work on campus in the Federal Work Study program. Students are paid minimum wage and work 10-20 hours a week. The money can be deducted from a student’s bill at the college or can be paid directly to the student.
Federal Subsidized Stafford Loan
This is a government program providing low-interest loans based on need. The loans are written in the student’s name and the government pays the interest while the student in college, during the six month grace period the student gets after graduation and during authorized deferment periods. Students may not borrow any more than $23,000 for their undergraduate education. The Federal Stafford loan has certain maximums: $3,500 in freshman year, $4,500 in sophomore year, and $5,500 in each of junior and senior years.
Federal Unsubsidized Stafford Loan
This government loan program provides non-need based low interest loans to students, who are not eligible for a full Subsidized Federal Stafford Loan. It is similar to the subsidized loan except that the interest accrues immediately on the unsubsidized loan and repayment begins 6 months after disbursement. The maximums of the unsubsidized loan are $2,000 in freshman year, $2,000 in sophomore year, and $2,000 in each of junior and senior years. The maximum loan amount is $8,000 and the amount must be repaid in 10 years.
Federal Plus Loan
This is a loan program for parents of dependent students and is not based on financial need. The amount borrowed can be up to the total cost minus any financial aid. These loans are requested by the college and repayment begins within 60 days and must be repaid in 10 years.
State Financial Aid Programs
The Illinois Student Assistance Commission (ISAC) has funding and scholarship programs for Illinois students. If the student attends a college in Illinois, he or she may be eligible for the Illinois Monetary Award Program (MAP Grant). Grants are dependent on the availability of state funds. Eligibility for this award is based on a separate formula used by ISAC, but is tied to the EFC from FAFSA calculation. www.collegezone.com
Financial Aid >