Funding for College

  • Information on student financial aid is available on the U.S. Department of Education Website.

    Check these free websites for scholarships:

    www.collegeboard.org

    www.collegeprowler.com

    www.finaid.org

    Grants

    Grants, unlike loans, do not have to be repaid. 
      

    Campus-Based Aid

    The Federal Supplemental Educational Opportunity Grant (FSEOG), Federal Work-Study (FWS), and Federal Perkins Loan programs are called campus-based programs because they're administered directly by the financial aid office at each participating school. Not all schools participate in all three programs.
    How much aid you receive from each of these programs depends on your financial need, on the amount of other aid you receive, and on the availability of funds at your college or career school. Unlike the Federal Pell Grant Program, which provides funds to every eligible student, the campus-based programs provide a certain amount of funds for each participating school to administer each year. When the money for a program is gone, no more awards can be made from that program for that year. So, make sure you apply for federal student aid as early as you can. Each school sets its own deadlines for campus-based funds, and those deadlines are usually earlier than the Department of Education's deadline for filing a FAFSA. 
     

    Federal Supplemental Educational Opportunity Grants

    Federal Supplemental Educational Opportunity Grants (FSEOG) are for undergraduates with exceptional financial need. Pell Grant recipients with the lowest EFCs will be the first to get FSEOGs. Just like Pell Grants, FSEOGs don't have to be paid back.

    How much can I get?
    You can receive between $100 and $4,000 a year, depending on when you apply, your financial need, the funding at the school you're attending, and the policies of the financial aid office at your school.

    If I am eligible, how will I get the FSEOG money?
    If you're eligible, your school will credit your account, pay you directly (usually by check), or combine these methods. Your school must pay you at least once per term (semester, trimester, or quarter). Schools that do not use semesters, trimesters, or quarters must disburse funds at least twice per academic year.
     

    Federal Work-Study

    Federal Work-Study (FWS) provides part-time jobs for undergraduate and graduate students with financial need, allowing them to earn money to help pay education expenses. The program encourages community service work and work related to the recipient's course of study.
     
    Will I be paid the same as I would in any other job?
    You'll be paid by the hour if you're an undergraduate. No FWS student may be paid by commission or fee. Your school must pay you directly (unless you direct otherwise) and at least monthly. Wages for the program must equal at least the current federal minimum wage but might be higher, depending on the type of work you do and the skills required. The amount you earn can't exceed your total FWS award. When assigning work hours, your employer or financial aid administrator will consider your award amount, your class schedule, and your academic progress.

    What kinds of jobs are there in Federal Work-Study?
    If you work on campus, you'll usually work for your school. If you work off campus, your employer will usually be a private nonprofit organization or a public agency, and the work performed must be in the public interest.
     
    Your school might have agreements with private for-profit employers for Federal Work-Study jobs. This type of job must be relevant to your course of study (to the maximum extent possible). If you attend a career school, there might be further restrictions on the jobs you can be assigned.
     

    Federal Perkins Loans

    A Federal Perkins Loan is a low-interest (5 percent) loan for both undergraduate and graduate students with exceptional financial need. Federal Perkins Loans are made through a school's financial aid office. Your school is your lender, and the loan is made with government funds. You must repay this loan to your school.
    Your school will either pay you directly (usually by check) or apply your loan to your school charges. You'll receive the loan in at least two payments during the academic year.

    How much can I borrow?
    You can borrow up to $5,500 for each year of undergraduate study (the total you can borrow as an undergraduate is $27,500). For graduate studies, you can borrow up to $8,000 per year (the total you can borrow as a graduate is $60,000 which includes amounts borrowed as an undergraduate). The amount you receive depends on when you apply, your financial need, and the funding level at the school.

    Other than interest, is there a charge for this loan?
    No, there are no other charges. However, if you skip a payment, if it's late, or if you make less than a full payment, you might have to pay a late charge plus any collection costs.

    When do I pay it back?
    If you're attending school at least half time, you have nine months after you graduate, leave school, or drop below half-time status before you must begin repayment. This is called "grace period." If you're attending less than half time, check with your college or career school to find out how long your grace period will be.
     

    Direct Stafford Loans

    Direct Stafford Loans, from the William D. Ford Federal Direct Loan (Direct Loan) Program, are low-interest loans for eligible students to help cover the cost of higher education at a four-year college or university, community college, or trade, career, or technical school. Eligible students borrow directly from the U.S. Department of Education (the Department) at participating schools.
    Direct Stafford Loans include the following types of loans:
    • Direct Subsidized Loans—Direct Subsidized Loans are for students with financial need. Your school will review the results of your Free Application for Federal Student Aid (FAFSASM) and determine the amount you can borrow. You are not charged interest while you’re in school at least half-time and during grace periods and deferment periods.
    • Direct Unsubsidized Loans—You are not required to demonstrate financial need to receive a Direct Unsubsidized Loan. Like subsidized loans, your school will determine the amount you can borrow. Interest accrues (accumulates) on an unsubsidized loan from the time it’s first paid out. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan). If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount.
    Additional loan types provided under the Direct Loan Program include Direct PLUS Loans (for parents and graduate and professional degree students) and Direct Consolidation Loans (to combine federal education loan debts into a single loan).

    How do I apply for a Stafford Loan?
    As with all federal student aid, you must complete the Free Application for Federal Student Aid (FAFSA). Most students use FAFSA on the Web to complete their application. Schools use the information from your FAFSA to determine how much student aid you will receive. Stafford Loans are generally included as part of your award package, which may contain other types of aid to help meet the costs of going to college or career school.
     
    Master Promissory Note—When you receive a Stafford Loan for the first time, you must complete a Master Promissory Note (MPN). The MPN is a legal document in which you promise to repay your loan and any accrued interest and fees to the Department. It also explains the terms and conditions of your loan. In most cases, one MPN can be used for loans that you receive over several years of study. If you previously signed an MPN to receive a FFEL Program loan, you will need to sign a new MPN for a Direct Loan.
    Your school will either give you a copy of the MPN or offer you the option of completing the MPN online at www.studentloans.gov.
     
    How much can I borrow?
    There are limits on the maximum amount you are eligible to receive each academic year (annual loan limit) and in total (aggregate loan limits). These limits are shown in the chart in the next section. The actual amount you can borrow each year depends on your year in school, whether you are a dependent or independent student, and other factors, and may be less than the maximum amounts shown in the loan limit chart. Your school will determine what types of loans and how much you may borrow.
     
    Depending on your financial need, you may be eligible to receive a subsidized loan for an amount up to the annual subsidized loan borrowing limit for your level of study. If you have education expenses that have not been met by subsidized loans and other aid, you may also receive an unsubsidized loan so long as you don't exceed the combined subsidized and unsubsidized annual loan limits.

    Annual and Aggregate Loan Limits
    The Federal Student Aid website provides maximum annual and aggregate (total) loan limits for subsidized and unsubsidized Direct Stafford Loans as well as interest rate information.
     
    How will I get the loan money?
    You'll be paid through your school, generally in at least two installments. No installment may exceed one-half of your loan amount. Your school will use your loan money first to pay for tuition and fees, room and board, and other school charges. If any loan money remains, you'll receive the funds by check or other means, unless you give the school written authorization to hold the funds until later in the enrollment period.
    Generally, if you're a first-year undergraduate student and a first-time borrower, your school cannot disburse your first payment until 30 days after the first day of your enrollment period.

    What are the current interest rates?
    The Federal Student Aid website provides up-to-date interest rate information as well as documentation on other fees.

    How do I pay back my loans?
    When you receive your first Direct Loan, you will be contacted by the servicer for that loan (you repay your loan to the loan servicer). Your loan servicer will provide regular updates on the status of your Direct Loan, and any additional Direct Loans that you receive. 

    When do I begin repaying my loans?
    After you graduate, leave school, or drop below half-time enrollment, you will have a six-month grace period before you begin repayment. During this period, you'll receive repayment information from your loan servicer, and you'll be notified of your first payment due date. Payments are usually due monthly.

    Repayment Plans—The Direct Loan Program offers several repayment plans that are designed to meet the different needs of individual borrowers. Generally, you’ll have 10 to 25 years to repay your loan, depending on the repayment plan that you choose. You will receive more detailed information on your repayment options during entrance and exit counseling sessions at your school. To learn more about Direct Loan repayment plans, go to the Repayment Information page for more information.

    What if I have trouble repaying the loan?
    Under certain circumstances, you can receive a deferment or forbearance that allows you to temporarily stop or lower the payments on your loan. For more information, go to the Repayment Information page.

    Can my loan be cancelled (discharged)?
    Yes, but only under a few circumstances. For more information, go to the Cancellation/Discharge page on this Web site.

    You also may qualify for forgiveness of some or all of your loan balance:
    •     If you teach full-time for 5 years at a school or educational service agency serving low-income families and meet other requirements, or
    •     After you have made 120 payments on a Direct Loan while employed in certain public service jobs (additional conditions apply).
     

    Direct PLUS Loans for Parents

    Parents of dependent students may apply for a Direct PLUS Loan to help pay their child's education expenses as long as certain eligibility requirements are met. Graduate and professional students may apply for PLUS Loans for their own expenses.
     
    To be eligible for a Direct PLUS Loan for Parents:
    • The parent borrower must be the student's biological or adoptive parent. In some cases, the student's stepparent may be eligible.
    • The student must be a dependent student who is enrolled at least half-time at a school that participates in the Direct Loan Program. Generally, a student is considered dependent if he or she is under 24 years of age, has no dependents, and is not married, a veteran, a graduate or professional degree student, or a ward of the court.
    • The parent borrower must not have an adverse credit history (a credit check will be done). If the parent does not pass the credit check, the parent may still receive a loan if someone (such as a relative or friend who is able to pass the credit check) agrees to endorse the loan. The endorser promises to repay the loan if the parent fails to do so. The parent may also still receive a loan if he or she can demonstrate extenuating circumstances.
    • The student and parent must be U.S. citizens or eligible noncitizens, must not be in default on any federal education loans or owe an overpayment on a federal education grant, and must meet other general eligibility requirements for the federal student aid programs. For additional information on eligibility requirements, go to the student aid eligibility page.
    Additional loan types provided under the Direct Loan Program, include Direct Stafford Loans (for undergraduate and graduate students), Direct PLUS Loans (for graduate and professional degree students), and Direct Consolidation Loans (to combine federal education loan debts into a single loan).

    How does a parent get a loan?
    For a Direct PLUS Loan, the parent must complete a Direct PLUS Loan Application and Master Promissory Note (MPN). The MPN is a legal document in which the borrower promises to repay the loan and any accrued interest and fees to the Department. It also explains the terms and conditions of the loan. In most cases, one MPN can be used for loans that a parent receives over multiple academic years although a separate Loan Request must be filed for each school year. If the parent previously signed an MPN to receive an FFEL PLUS loan, he or she will need to sign a new MPN for a Direct PLUS Loan.
     
    The school's financial aid office can provide instructions on applying for a PLUS Loan and may offer the option of completing the PLUS application and MPN online at www.studentloans.gov.

    How much can a parent borrow?
    The annual limit on a PLUS Loan is equal to the student's cost of attendance minus any other financial aid the student receives.
    For example, if the cost of attendance is $6,000 and the student receives $4,000 in other financial aid, the student's parent can request up to $2,000.

    How does the parent get the loan money?
    ED will send the loan funds to the student's school. In most cases, the loan will be disbursed in at least two installments, and no installment will be more than half the loan amount. The school will use the loan money first to pay the student's tuition, fees, room and board, and other school charges. If any loan funds remain, the parent will receive the amount as a check or other means, unless he or she authorizes the amount to be released to the student or transferred into the student's account at the school. Any remaining loan funds must be used for the student's education expenses.
     
    Prior Federal Loans and Financial Aid History—Students and parents may check the interest rate, servicer information, and other financial aid history at the National Student Loan Data System.
     
    Interest rate cap for military members—If a parent qualifies under the Service Members Civil Relief Act, the interest rate on loans obtained before entering military service may be capped at 6% during the parent's military service. Parents must contact their loan servicer to request this benefit.
    Other than interest, is there a charge to get a PLUS Loan?
    The parent will pay a fee of 4% of the loan amount, deducted proportionately each time a loan disbursement is made.

    When does the parent begin repaying the loan?
    The repayment period for a Direct PLUS Loan begins at the time the PLUS loan is fully disbursed, and the first payment is due within 60 days after the final disbursement. However, for Direct PLUS Loans with a first disbursement date on or after July 1, 2008, the parent may defer repayment:
    • while the student on whose behalf the parent borrowed the loan is enrolled on at least a half-time basis, and
    • for an additional six months after the student ceases to be enrolled at least half-time.
    How does the parent pay back the loan?
    The parent will repay the servicer listed on the disclosure statement provided when he or she received the loan. The loan servicer will provide regular updates on the status of the PLUS Loan, and any additional PLUS Loans that a parent receives. 
    Repayment Plans—The Direct PLUS Loan Program for parents offers three repayment plans-standard, extended, and graduated-that are designed to meet the different needs of individual borrowers. The terms differ between the repayment programs, but generally borrowers will have 10 to 25 years to repay a loan. To read more about repayment plans, go to the Repayment Information page.
    What if a parent has trouble repaying the loan?
    Under certain circumstances, a borrower can receive a deferment or forbearance to temporarily stop or lower the payments on a loan. For more information, go to the Repayment Information page.
     
    Can the parent's PLUS Loan be transferred to the student so that it becomes the student's responsibility to repay?
    No. A PLUS Loan made to the parent cannot be transferred to the student. The parent is responsible for repaying the PLUS Loan.

    Can a PLUS Loan be cancelled (discharged)?
    Yes, under certain conditions. A cancellation (discharge) releases the parent from all obligations to repay the loan. For more information, go to the cancellation/discharge page on this Web site.
     
    Under the Loan Forgiveness for Public Service Employees Program, borrowers may have the balance of their loans forgiven if they are employed full-time in a public service job and make 120 payments on their loans during that period. For additional details, go to the Loan Forgiveness for Public Service Employees page.
     
    Check here for general financial aid information: www.finaid.org
Last Modified on July 9, 2019