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Federal Student Aid Primer

Over 6 million applications a year now processed online

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You want to go to college so you can make a lot of money but you don't have a lot of money, so you can't go to college. Congratulations! You have just met the main requirements for getting federal student aid.

The U.S. Department of Education provides more than $67 billion in loans, grants and campus-based aid every year to assist millions of students and their families pay for postsecondary education. This feature presents an overview of the types of federal student financial aid available, eligibility requirements and the application process. Handy links directly to detailed information from the Department of Education are provided throughout.

Federal Student Loan Programs
The government's Stafford Loan program offers both subsidized and unsubsidized student loans. Subsidized loans require proof of financial need. All interest on subsidized loans is paid by the government while the student is actually enrolled at least half time and during certain periods, such as grace and deferment. Unsubsidized loans are available regardless of financial need. The student must pay all interest on unsubsidized loans. The Direct PLUS program offers unsubsidized loans to parents of dependent students. The parents must pay all interest on Direct PLUS loans.

Amounts that can be borrowed, repayment options and interest rates vary greatly and can be modified during the term of the loan. For details on federal student loan programs, see: Federal Direct Student Loans - Information For Students

(Note: Some teachers and childcare providers may be able to cancel payment of portions of their federal student loans. See: Loan Cancellation for Teachers and Cancellation for Childcare Providers.)

Federal Pell Grants
Unlike loans, federal Pell Grants do not have to be paid back. Eligibility is based on financial need. Maximum amounts available vary yearly as determined by Congress. Besides financial need, the amount of a Pell grant also depends on costs to attend school, the student's status as a full- or part-time student, and the student's plans to attend school for a full academic year or less. Pell grant funds are paid directly to the student by the school at least once each semester, trimester, or quarter.

Campus-Based Aid Programs
Campus based programs like the Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Work-Study (FWS), and Federal Perkins Loan programs are administered directly by the financial aid office at each participating school. Federal funds for these programs are given to the schools and distributed to students at the schools' discretion. Amounts students can receive depends on individual financial need, amounts of other aid the student receives and the total availability of funds at the school.

Basic Eligibility Requirements for Student Aid
Eligibility for federal student aid is determined on the basis of financial need and on several other factors. The financial aid administrator at the college or career school you plan to attend will determine your eligibility. Basically, to receive aid from federal programs, you must:

  • qualify for financial need (except for certain loans);
  • have a high school diploma or a General Education Development (GED) certificate, or pass a test approved by the U.S. Department of Education;
  • be working toward a degree or certificate;
  • be enrolled in an eligible program;
  • be a U.S. citizen or eligible non-citizen;
  • have a valid Social Security Number;
  • maintain satisfactory academic progress once in school.

Under federal law, persons who have been convicted under federal or state law of the sale or possession of drugs are not eligible for federal student aid. If you have a conviction or convictions for these offenses, call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243) to find out if, or how, this law applies to you.

Even if you are ineligible for federal aid, the Education Department urges you to complete a Free Application for Federal Student Aid, because you may be eligible for nonfederal aid from states and private institutions.

How to Apply for Student Aid
The Free Application for Federal Student Aid (FAFSA) can be used to apply for all loans, grants and campus based student aid programs. The FASFA can be completed online or on paper.

The FAFSA Web site takes you through every step of the process and provides all the information you need to apply for federal student aid. Applicants can access worksheets to estimate their incomes, electronically sign loan documents, save an application at any computer and print a complete report.

How easy is the FAFSA online application process? In 2000, over 4 million student loan applications were processed online, a number the Department of Education expects to top 6 million during 2002. Between Jan. 1 and March 1, 2002, over 500,000 applications had already been processed online.

Questions?
If you have any questions, or require additional information on student financial assistance, you may contact your high school guidance counselor, the financial aid officer at the postsecondary school you plan to attend, or the Federal Student Aid Information Center, open seven days a week, from 8 a.m. to midnight (Eastern Time).

You can also find free information about federal, state, institutional, and private student aid in your high school counselor's office or local library's reference section (usually listed under "student aid" or "financial aid").

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