Financial Aid / Student Loans

Student Loans  a loan obtained to pay for education bills in which the payments are delayed until after graduation

1. Federal Student Loans a) guaranteed by the federal government (acts as cosigner) b) have the best terms c) largest source of student loans d) degree = higher income = more tax dollars and less government assistance

2. Federal Stafford Loans a) most common federal student loan b) no credit check required c) limits on the annual and total amounts you can borrow d) payments do not need to be made while in school e) six month grace period after you are no longer enrolled before payments are required f) two types

2. Federal Stafford Loans (cont) I. Subsidized 1. applicants must show a certain level of financial need to qualify 2. Interest charges do NOT accrue while in school II. Unsubsidized 1. not need-based 2. Interest charges DO accrue while in school

3. Federal Perkins Loans a) similar to Stafford loans – for students with “exceptional” financial need who will not likely get any financial support from parents to attend school b) carry a lower interest rate c) offer a longer grace period before repayment

4. PLUS Loans  Parent Loan for Undergraduate Students  loans offered by banks and lending institutions to parents of students  parents must have good credit

5. Private Loans  privately funded and not backed by the government  higher interest rates and fees

Financial Aid Process  Students receive financial aid in the following forms: 1. Grants – money given, usually because of financial need 2. Scholarships – money awarded for exceptional academic achievement, an outstanding talent or skill, and/or financial need 3. Work-study – money earned by working at a part- time job 4. Loans – borrowed money that must be repaid  Most aid is based on financial need

Free Application for Federal Student Aid (FAFSA)  the federal form used to determine the amount a family should be able to pay for one year of college  must be submitted after January 1 to receive need-based aid provided by the federal gov  in some cases, it is used to determine eligibility for state and institutional aid

FAFSA (cont.)  similar to filling out tax forms – info required on income, assets, etc of both parents and students  can be completed online at  aid often awarded on a “first come, first serve” basis

FAFSA – After You Submit  In several weeks, a Student Aid Report (SAR) will be received with a Expected Family Contribution (EFC) – the amount the family is expected to contribute  The schools you want your aid information to go to are indicated on the FAFSA  If a student has financial need, the college will send an award letter explaining their “package”- any combination of grants, scholarships, work-study, and/or loans

Additional Financial Aid  Financial aid applications can also be submitted directly through most schools  Contact the Financial Aid Office for assistance

1. Grants  Pell Grant  largest of the federal grants available  awarded through FAFSA  Academic Competitiveness Grant  must have successfully completed a “rigorous high school program” and be eligible for a Pell Grant  awarded through FAFSA  Supplemental Educational Opportunity Grant (SEOG)  students with exceptional need are given this federal grant directly through the school  awarded through FAFSA

Grants (cont.)  State Grants  state governments offer a variety of programs, some for students in a specific career field  FAFSA serves as the application for state grants in PA  Institutional Grants  awarded through the school depending on the student’s availability of funds and desirability to the school  awarded through the school’s financial aid applications

2. Scholarships  Academic Scholarships – most awarded by the individual school for academic excellence  Athletic Scholarships – offered through the school for participation in school athletics  Talent Scholarships – most offered through the school for talent in music, art, theater, and dance

Scholarships (cont.)  Local Scholarships – local organizations offer small scholarships to students in their community  Minority Scholarships – offered through the school to attract outstanding minority students

3. Work – Study  Federal and school-sponsored work-study programs are designed to help students in financial need earn money for school  Most work-study jobs are on campus (dining hall, library, student union, admissions jobs)  Awarded through FAFSA