The federal government has instituted many different financial incentives for students hoping to attend college. Not only does it offer need-based grants for those who are eligible nationwide, but it also subsidizes loans and mandates loan-repayment terms for student loans to keep student debt manageable.
Because the cost of attending college varies by state, school and student, it is a good idea for students and their parents to become familiar with the federal government’s role in offering financial aid for college.
One of the first stops in the search for financial aid is the completion of the Free Application for Federal Student Aid (FAFSA), an application which considers you and your parents’ financial condition to determine your total expected family contribution (EFC) and the amount of federal grants for college you can receive. The schools you are considering will take this EFC, which is a number generated in a Student Aid Report upon completion of the FAFSA, and put together a financial aid package that typically includes federal grants, loans, and institutional aid.
Federal Grants
Federal grants are need-based financial awards that do not need to be paid back.
Students whose EFC is low enough may qualify for need-based grants from the federal government. The Federal Pell Grant is awarded on a sliding scale up to $5500 for the 2011-12 school year. Only a student whose EFC is 0, which means the family’s need is so high it cannot be expected to contribute financially, can expect to receive the full amount (although some universities and other eligibility requirements apply).
The Federal Supplemental Educational Opportunity Grant (FSEOG) is awarded to students whose need is considered exceptional. Depending on factors such as when you apply, the award can be anywhere between $100 and $4000.
Other federal grants, like the Teacher Education Assistance for College and Higher Education Grant (TEACH), which is offered to future teachers who agree to teach in high-need areas, may be made available by the federal government on a year-to-year basis.
In addition, many students who qualify for a federal grant also qualify for a need-based college grant offered by their universities.
Federal Work Study
The federal work study program can also help students earn money toward their college education. Depending on the level of funding at your school of choice, work-study eligible students can be paid directly by the school for jobs performed in the work study program. This money is intended for use in defraying educational expenses.