Helping You Understand Federal Financial Aid

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Feature Story

By Jenny Faubert

During these hard times, people are looking toward the future. For many this includes seeking a higher education. Finding funding options for school has become more important than ever before.

Each year $80 billion in grants, loans and work-study assistance is available through financial aid. For most schools, in order to receive financial aid students must fill out a Free Application for Federal Student Aid (FAFSA).

Today, there are programs available like the Academic Competitiveness Grant, the Teacher Education Assistance for College and Higher Education Grant, or the National Science and Mathematics Access to Retain Talent Grant. Find out what these programs are all about, the annual award amount, and repayment.

All About Federal Financial Aid

Aid Program

Description

Annual Amount

Repayment

Academic Competitiveness Grant (ACG)

A monetary grant for students in their first or second academic year. First-year students must have completed high school on or after January 1, 2006. Second-year students must have completed high school on or after January 1, 2005.

Up to $750 for first year. Up to $1,300 for second year.

None

Federal Pell Grant

A monetary grant for undergraduates and certain post-baccalaureates with exceptional financial need.

The range for this grant is $400 - $4,731 (July 1, 2008 to June 30, 2009).  Subject to federal budget appropriations.

None

Federal Supplemental Educational Opportunity Grant (FSEOG)

A monetary grant for undergraduates with exceptional financial need.

The range for this grant is $100 - $4,000 a year.

None

Teacher Education Assistance for College and Higher Education (TEACH) Grant

A monetary grant awarded to students who intend to teach in a public or private elementary or secondary school that serves students from low-income families.

Up to $4,000 per year.

None

The National Science and Mathematics Access to Retain Talent Grant (National SMART Grant)

A monetary grant available during the third and fourth years of undergraduate study to full-time students eligible for the Federal Pell Grant and majoring in physical, life or computer sciences; mathematics; technology; engineering; or in a foreign language determined critical to national security. 

Up to $4,000 for each of the third and fourth years of undergraduate study.

None

Federal Work-Study (FWS)

Allows students to work part-time to earn money for education expenses.  Eligibility based on financial need.

Earnings are at least minimum wage but may be more.

None

Federal Perkins Loans

5% fixed-interest loan with the college serving as the lender.  Principal and interest charges deferred while enrolled at least half-time.  Eligibility based on financial need.

Up to $5,500 per year for undergraduate study, not to exceed $27,500 total.  Up to $8,000 per year for graduates.

Repayment begins nine months after the student graduates, falls below half-time, or leaves college.  Repayment may run up to 10 years.

Federal Stafford Loan – Subsidized

Federal loans made available to student regardless of credit with a fixed interest rate of 6.8%.  Subsidized loans are based on financial need and the U.S. Department of Education pays the interest accrued on the loan while in school.  

Full-time dependent and independent undergraduate: 1st year up to $3,500, 2nd year up to $4,500, thereafter up to $5,500. (Must be enrolled in a program of study that is at least a full academic year)

 

Repayment of the principal begins six months after graduating, leaving school, or whenever enrollment drops below half-time.  A standard repayment may run up to 10 years.

Federal Stafford Loan – Unsubsidized

Federal loans made available to student regardless of credit with a fixed interest rate of 6.8%.    Subsidized loans are not based on financial need.

Full-time dependent undergraduate: 1st year up to $2,000, 2nd year up to $2,000, thereafter up to $2,000.

Full-time independent undergraduate: 1st year up to $6,000, 2nd year up to $6,000, thereafter up to $7,000. (Must be enrolled in a program of study that is at least a full academic year)

Repayment of the principal begins six months after graduating, leaving school, or whenever enrollment drops below half-time.  A standard repayment may run up to 10 years.

Federal PLUS Loan (Parent Loan for Undergraduate Students)

Loan to borrower on behalf of dependent student to help pay for education expenses.  Student must be enrolled at least half-time and the borrower must pass a credit check. 

May borrow up to the difference between college costs minus estimated financial assistance.

Borrower can begin repayment 60 days after the loan or wait 6 months after the dependent student ceases to be enrolled on at least a half-time basis. 

 

More information about federal financial aid can be found on the Federal Student Aid web site: http://studentaid.ed.gov/

And, of course, don’t forget about scholarships when looking for funds.  Take a look at a previous Inside Imagine America article, “Scholarships, Scholarships and More Scholarships."

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