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When it is time to pay for college, you do not have to rely on current
income and college savings alone. Additional funding can come from financial
aid, scholarships, grants, loans and other sources.
Apply For Financial Aid
To be considered for financial aid, complete the U.S. Department of Education’s
Free Application for Federal Student Aid (FAFSA). The form is available from a
high school guidance counselor or online at www.fafsa.ed.gov
and cannot be filed before January 1 of the year your child will begin college.
Whether your family receives financial aid depends on your Expected Family
Contribution (EFC). Your EFC calculates the income and saved assets of parent(s)
and child and compares it to the cost of attending college. If there is a gap,
you may be eligible for needs-based aid.
Tip
Complete and submit the FAFSA even if you do not think your family will qualify for aid.
Colleges can fine-tune eligibility formulas to meet their own needs. File your FAFSA early,
immediately after January 1 of your child’s senior year in high school. Colleges often award
available aid on a first-come, first-served basis.
Grants
Grants provide college money that does not need to be repaid.
They are awarded based on financial need.
The federal government sponsors:
- Pell Grants. Eligible students may receive a maximum of approximately
$4,050 annually.
- Federal Supplemental Educational Opportunity Grants (FSEOG).
Undergraduate students with exceptional financial need may receive
from $100 to $4,000 annually.
State governments also offer grant programs, with varying
eligibility and application requirements. Contact your state’s
Department of Education for information.
In addition, local governments, private organizations and individual
colleges and universities may offer grant funds to students with financial
need. Contact a high school guidance counselor or college financial aid
office for information.
Scholarships
Consult your child’s high school guidance counselor, a library or
local bookstores for information about available scholarships.
- Scholarships do not need to be repaid.
- In most cases, students are eligible regardless of financial need.
- Many types of scholarships exist. Not all are based on academic achievement.
- When applying, focus on local scholarship opportunities, as these are often
the least competitive.
Loans
Federally sponsored loans are another alternative for financing college.
These generally offer more favorable terms than loans offered by private
lenders and include:
- Stafford Loans
- Perkins Loans
- Federal Parent Loans for Undergraduate Students (PLUS)
- Consolidation Loans
Remember, before borrowing money from any source, make sure you
understand the terms — total cost, repayment schedule, grace period
and other related information.
Federal Work-Study Programs
Federal work-study programs provide part-time employment for students
who need to earn money for educational expenses. Assignments are generally
related to community service or the student’s course of study.
Military Assistance
Financial aid is provided to students interested in pursuing military careers,
as well as for military veterans and their dependents.
Anyone who enlists in the armed forces may be eligible for one of the
following education assistance programs.
- The Montgomery GI Bill — Active Duty
- The Montgomery GI Bill — Selected Reserve
- Veterans Educational Assistance Program
- Survivors’ and Dependents’ Educational Assistance Program
For details of these programs, visit
www.gibill.va.gov or call (888) 442-4551.
Each service branch also offers its own scholarships, college funds, tuition
assistance, work-study programs, loan repayment programs and other forms of assistance.
The Reserve Officer Training Corps (ROTC) offers scholarship programs that allow
students to attend school full time while participating in a part-time or summer
officer training program. Competition for ROTC scholarships can be intense.
Military academies are among the most prestigious colleges in the United States.
If accepted, a student can expect to attend school tuition free and receive an annual
salary in return for a commitment to serve at least 5 years of active duty military service.
For additional information, see the College Financial Resources article.
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Basic Money Management
Basic Money Management