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Financial Aid for Students

The Four Primary Sources for Financial Aid

Before applying to a school, it is important to find out what percentage of “need based” financial aid the school will be offering from “gift aid” (free money from grants and scholarships) and from “self-help” aid (loans, work-study). Not every school will be giving the same types of award packages.

Some schools will meet 100% of your “needs” with grants and scholarships, while others will meet 100% of those needs with loans and work-study. It will definitely be, for the most part, a combination of scholarships, grants, loans, and work-study programs.

The majority of this financial aid comes from five primary sources:

  1. FEDERAL GOVERNMENT
  2. STATE GOVERNMENT
  3. CAMPUS-BASED PROGRAMS
  4. PRIVATE SCHOLARSHIPS
  5. FEDERAL GOVERNMENT BASED PROGRAMS

There are also three major federally based programs as well: 1) Pell Grants; 2) Subsidized and Unsubsidized Stafford Loans; 3) Parent PLUS Loans.

PELL GRANTS: The Federal Pell Grant does not have to be repaid. Pell Grants are awarded to undergraduate students with extreme financial need only.

Subsidized and Unsubsidized Stafford Loans: These loans are available to students through the Federal Family Education Loan (FFEL) Program and come from a bank, credit union, or other lenders that participate in the program. A Subsidized Loan is based on the need of the student, while the Unsubsidized Loan is available to families regardless of the need.

Parent PLUS/SLS Loans: PLUS stands for “Parent’s Loans for Undergraduate Students.” These loans are in the parent’s name and are based on credit approval rather than need. State Government Based Programs

Each state will have its own special programs. These can include scholarships, tuition assistance, grants, and loans. There will most likely be more benefits available if you are registered as an in-state student.

The best thing to do, once you’ve decided what school you want to attend, is to contact the Office of Higher Education Student Assistant Authority in that state and ask them to send you a complete guide to the programs that are available to you as a student. Campus Based Programs

Campus Based Program are funds that colleges and universities receive from the Federal Government as well as private endowments. The college or university receives a specific amount of money each year. However, once that money has been awarded there are no more funds available until next year. That’s why it is so important to file your financial aid form on time, and correctly, as aid is awarded on a first come, first serve basis.

The three main sources of campus based aid are: 1) SEOG grants; 2) work-study; 3) Perkins Loans and endowments.

Supplemental Educational Opportunity Grants (SEOG: these are “need” based grants that are awarded to students who have an extreme financial need. Note, priority is given to students who have received Pell Grants.

Federal Work-Study: This award is based upon “need.” The student is offered an amount of money for the year and will be expected to work part-time, at minimum wage, to pay back the funds until the student has earned the amount that was awarded to them.

Federal Perkins Loan: These are a low interest, subsidized loans that are offered by colleges and subsidized by the Federal Government. Also, the government subsidizes the interest.

Endowments: Endowments are funds that have been given to schools from private sources such as alumni, corporations, and various other foundations. PRIVATE SCHOLARSHIPS

Please be aware that millions of dollars are given away each year to deserving students by private organizations. While trying to find these scholarships and applying for them can be a frustrating experience, it is also a rewarding process. Note – it is recommended NOT to pay for scholarship searches.

The best place to start would be in your high school guidance office, then move on to searches on the Internet. Be sure to be persistent and apply for all that you can.

About The Author

Ben Todd

Ben was a seriously broke graduate student with bad credit who after finding himself rejected for any sort of credit card or loan for most of his adult life, finally decided to get his financial life in order. 'He spent several years reading as many financial advice books and blogs as he could.And suprisingly, Ben found he actually LIKED the topic of personal finance; after fixing his own finances, starting his own successful work at home website business, and using his earnings to get out of debt, created echeck.org to help others do likewise!

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