Federal Student Aid Overview

Financial Aid Lingo Award Letter: A notification to financial aid applicants of the assistance being offered. Financial Aid Package: A financial aid award to a student comprised of a combination of forms of financial aid (loans, grants and/or scholarships, employment). Grant: A type of financial aid that does not have to be repaid; usually awarded on the basis of need and/or certain characteristics or skills of the student. Loan: Funds borrowed (usually with interest) from an organization which requires the recipient to repay a specified amount within a certain timeframe. Scholarship: A form of financial aid that does not require repayment or employment usually awarded to students with certain characteristics or skills. Work-Study: A type of financial aid where students are given the opportunity to earn money working at an on-campus job.

WHAT is federal student aid?

• It’s financial help if you’re enrolled in an eligible program at a school participating in federal student aid programs.
  
• Aid covers school expenses, including tuition and fees, room and board, books and supplies, and transportation.
  
• Aid is based on a student’s demonstrated financial need, not grades.

There are three categories of federal student aid:

GRANTS…financial aid you don’t have to repay. The amount you receive depends on your need, cost of attendance, and enrollment status (full time or part time).

WORK-STUDY…money you earn while enrolled in school that will help pay your educational expenses. The Federal Work-Study Program encourages community service work and work related to your course of study, whenever possible.

LOANS…borrowed money you must repay with interest. Parents may also borrow to pay the education expenses of their dependent undergraduate students.

Federal Perkins Loans are offered by participating schools to students who demonstrate the greatest financial need. You repay the loan to your school.

Stafford Loans are made to students, and PLUS loans are made to parents through two loan programs:

• William D. Ford Federal Direct Loan (Direct Loan) Program: Eligible students and parents borrow directly from the federal government at participating schools. Direct Loans consist of Direct Stafford Loans, Direct PLUS Loans, and Direct Consolidation Loans.
  
• Federal Family Education Loan (FFEL) Program: Private lenders provide federally guaranteed funds. FFELs consist of Federal Stafford Loans, Federal PLUS Loans, and Federal Consolidation Loans.

WHO gets federal student aid?

Some of the eligibility requirements are that you must:

• Be a U.S. citizen or eligible noncitizen with a valid Social Security Number.
  
• Demonstrate by one of the following means that you are qualified to obtain a postsecondary education:
  
• Have a high school diploma or a General Education Develop- ment (GED) Certificate.
  
• Pass an approved ability-to-benefit (ATB) test.
  
• Meet other standards your state establishes.
  
• Complete a high school education.
• Enroll in an eligible program as a regular student seeking a degree or certificate.
  
• Register (or have registered) with the Selective Service if you’re a male between 18 and 25.

HOW do you apply for federal student aid?

1. Complete the Free Application for Federal Student Aid (FAFSA)—
   
• For FAFSA on the Web, you can go to www.fafsa.ed.gov.
  
• You can get a paper FAFSA from a high school guidance office, a college financial aid office, a local public library, or our Federal Student Aid Information Center by calling 1-800-4-FED-AID (1-800-433-3243).
  
• Schools and states often set deadlines early in the calendar year that you must meet to receive certain types of funds. Apply early!
  
2. Review your Student Aid Report (SAR). The SAR confirms the information reported on your FAFSA and will contain your Expected Family Contribution (EFC), a measure of your family’s financial strength, which is used to determine your eligibility for federal student aid.
   
3. Contact the school(s) you might attend. Talk with the financial aid office staff at the school(s) you’re interested in attending. The financial aid administrator will review your SAR, and, if you’re eligible, will prepare a letter outlining the amount of aid (from all sources) the school will offer you.

From www.studentaid.ed.gov, a Department of Education website.