Federal Student Aid, a part of the U.S. Department of Education, is the largest provider of student financial aid in the nation. The office of Federal Student Aid provides grants, loans, and work-study funds for college or career school.
To apply for federal aid for college, career schools, or graduate schools, students must fill out the Free Application for Federal Student Aid (or FAFSA) form.
Federal student aid covers such expenses as tuition and fees, room and board, books and supplies, transportation, and other related expenses, such as a computer and dependent care.
Eligibility for Federal Student Aid is determined using a formula that prioritizes funding for students with the most financial need: Cost of Attendance (COA) - Expected Family Contribution (EFC) = Need
Overview of Federal Aid:
Grants: Financial aid that doesn’t have to be repaid. Grants are available for students with the greatest financial need.
Loans: Borrowed money that must be repaid with interest. Loans are available to all income groups, including those with no credit history.
Work-study: A work program through which you earn money to help you pay for school.
Most Common Types of Federal Aid:
Federal Pell Grant
- A grant usually awarded only to undergraduate students who have not earned a bachelor's or a professional degree.
- Amounts can change yearly; The current maximum Federal Pell Grant award is $6,095.
Federal Supplemental Educational Opportunity Grant (FSEOG)
- A grant for undergraduate students with exceptional financial need.
- Can receive between $100 and $4,000 a year, depending on financial need, when you apply, the amount of other aid you get, and the availability of funds at your school.
Direct Subsidized Loans
- Loans made to eligible undergraduate students who have financial need to help cover the costs of higher education at school.
- The U.S. Department of Education pays the interest while you’re in school at least half-time, or the first six months after you leave school (referred to as a grace period), and during a period of deferment (a postponement of loan payments).
Direct Unsubsidized Loans
- Loans made to eligible undergraduate, graduate, and professional students, but in this case, the student does not have to have financial need to be eligible for the loan.
- You are responsible for paying the interest on a Direct Unsubsidized Loan during all periods.
Federal Perkins Loan Program
- School-based loan program for undergraduates and graduate students with exceptional financial need. Under this program, the school is the lender.