There is a lot of money out there to help you pay for college like federal financial aid. Understanding the different types of federal financial aid available is a key part of getting a handle on what college will cost you. It is also a key part of paying as little as possible out of pocket towards your college costs. So, this article is dedicated to the main types of federal financial aid.
The Federall Pell Grant is the an important term to know. If Pell-eligigible, you are then eligbigle for Federal Workstudy, Federal Driect Subsidized Loans, and more which we will get into later in this article.
This is not a comprehensive list and, of course, I am not a licensed financial planner or anything of the sort. This is a post meant to only increase awareness in hopes that you will do your own due diligence. Enjoy!
Federal Pell Grant
Pell Grant is exactly like it sounds – it’s a federal grant to help you pay for school. Since it is a grant, you do not need to pay it back. It is free money! In order to know if you are Pell Grant eligible you must complete the FAFSA (Free Application for Federal Student Aid).
Note: 9 times out of 10 the Pell Grant can only be applied to undergraduate studies.
Federal Supplemental Educational Opportunity Grant (FSEOG)
Qualified undergraduate students who submit the free application for federal student aid and are Pell eligible may be considered for this grant. Students with the greatest demonstrated need are given awarding priority. Since, this is a grant it does not need to be repaid. Note that funds are limited, and students are selected on the basis of lowest expected family contribution or EFC and Pell Grant priority over the entire award year.
Note: Must be deemed Pell Grant eligible by the FAFSA
Federal Work-Study
Federal Work-study is something also determined by FAFSA. This is essentially an opportunity for eligible students to work on-campus or in campus-affiliated positions to earn a predetermined maximum income amount. For example, I worked as a work-study in my university’s Office of International Programs – i.e. study abroad office. There I was paid $10/hr up to a $2,000 limit for that academic year.
Note that you can only get paid for the hours you worked and that for most universities you cannot work more than 10 hours a week. There could be other rules on the hours depending on your university so be sure to speak with your financial aid about the specifics.
This is officially called the Federal Direct Subsidized Loan and is another aid opportunity you can only receive after completing the FAFSA. They are exactly as titled – a subsidized loan to be used to help you pay for college.
Federal Direct Subsidized Loans
What does subsidized mean?
Subsidized, in this use, essentially means you don’t have to pay interest on the loan while you are enrolled in school. Officially, it’s saying that the U.S. Department of Education is paying the interest on the loan, not you. Now, I am not sure about whether it depends on if you are full or part-time, so speak with your financial aid office about the specific details – I believe you must be at least whatever your school determines as “half-time”.
Note: Subsidized loans are only for undergraduate students.
Federal Direct Unsubsidized Loans
This is essentially the same thing as a subsidized loan, EXCEPT you are responsible for paying the interest on the loan while you are in school. So, to be clear subsidized loans ARE better than unsubsidized loans, in most cases. Again, always consult your financial aid office about your specific financial aid packages and opportunities.
Note: Unsubsidized loans are for undergraduate, graduate, and professional students.
Federal Direct Parent Plus Loan
The Parent Plus Loan is offered to graduate/professional students or parents of dependent undergraduate students. This is a loan that in most cases is used to cover the education expenses not covered by other financial aid, therefore you can usually only borrow up to the cost of attendance for your university.
Putting It All Together
Fill out the FAFSA! 99% of the financial aid options above can only be used if you fill out the FAFSA. The FAFSA determines your eligibility for practically everything, so complete it. It’s free and can only help you increase your chances of receiving funding for school! For more information on these financial aid options go to https://studentaid.gov/h/understand-aid.
Additionally, I wrote an article about five steps you can take right now to save money in college. These methods saved me thousands and helped me graduate debt-free.
Read More: 5 Steps To Save Thousands In College
What are your thoughts? Is this helpful federal financial aid information? Let us know in the comments below.
Best of luck adulting!
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