Exploring Different Types of Federal Aid
The U.S. Department of Education offers college students an assortment of funding opportunities to pay for tuition, books, and other fees related to their schooling. Assistance comes in the form of grants and loans. The following is a brief breakdown of common resources available to students.
Pell Grant
The Federal Pell Grant Program supplies financial backing to undergraduate students. Eligibility is determined through the use of formulas and is based on the student’s financial needs. Students can be awarded up to $4,310 a year based on their financial situation and the number of credit hours they are enrolled in for school.
Federal Stafford Loan
A federal loan taken out by the student, a Federal Stafford Loan can be used to pay for direct educational costs that aren’t covered by grants. In order to be eligible for a loan, the borrower has to be enrolled at least half-time. Repayment of the loan begins six months after the student graduates or leaves college.
Stafford Loans come in two forms – subsidized and unsubsidized. Subsidized loans are awarded based on financial need. Students in school at least half-time are not charged interest. Interest is also not charged during deferment periods and grace periods. Unsubsidized loans are the exact opposite of subsidies. These loans are not based on financial need and interest is always charged.
Federal Stafford Loans can total more than $20,000 a year depending on the student’s dependency status and grade level.
Federal PLUS Loans
Parents can opt to pay for their child’s education via a Federal PLUS Loan. Like the Stafford, the PLUS Loan can only be used to pay for direct expenses for college. Parents must also undergo a credit check and repayment begins immediately after loan disbursement.
Ed.gov is the website for the Department of Education
If you find that you need more funds above and beyond what is offered in Federal aid, consider a private student loan. An important note: private student loans cover most everyday college expenses, such as room and board, school supplies, a computer and more.