Types of financial aid

students at computerLearn the different types of financial aid and use them to your advantage.You can get cash for college if you know where to look!

 

Financial aid includes:

  • scholarships and grants, which do not need to be repaid
  • work-study programs, which requires a work/service commitment
  • student loans, which must be repaid

These types of financial aid may come from several sources, including federal and state government agencies, colleges and universities, and organizations like Nellie Mae.

Financial aid programs solely for undergraduate students and their parents include:

Financial aid programs for undergraduate and graduate students include:

To be eligible for federal financial aid, you must be a U.S. citizen or permanent resident and meet other eligibility criteria explained on the Free Application for Federal Student Aid (FAFSA).

Federal Pell GrantFederal Pell Grants are available to eligible undergraduate students. The maximum Pell Grant award for the 2007-08 award year (July 1, 2007 to June 30, 2008) is $4,310. The maximum award for the 2008-09 award year (July 1, 2008 to June 30, 2009) is $4,731. The maximum can change each award year and depends on program funding. Individual grants are based on a student's EFC, cost of education, and full-time or part-time enrollment status.

Federal Supplemental Educational Opportunity Grant (FSEOG)These grants are for undergraduate students with exceptional financial need; priority is given to Federal Pell Grant recipients. Similar to Pell Grants, FSEOGs are administered by the financial aid office at your school. The maximum annual FSEOG amount is $4,000 and varies by school.

Academic Competitiveness GrantAcademic Competitiveness Grants provide up to $750 for the first year of undergraduate study and up to $1,300 for the second year of undergraduate study to full-time students who are eligible for a Federal Pell Grant and who have successfully completed a rigorous high school program, as determined by the state or local education agency and recognized by the Secretary of Education.

Second-year students must also have maintained a cumulative grade point average (GPA) of at least 3.0. The program is available for the 2006–07 school year for first year students who graduated from high school after January 1, 2006 and for second year students who graduated from high school after January 1, 2005. The Academic Competitiveness Grant award is in addition to the student's Pell Grant award.

National Science and Mathematics Access to Retain Talent Grant (National SMART Grant)A National SMART Grant provides up to $4,000 for each of the third and fourth years of undergraduate study to full-time students who are eligible for a Federal Pell Grant and who are majoring in physical, life, or computer sciences, mathematics, technology, engineering, or a foreign language determined critical to national security. The student must also have maintained a cumulative grade point average (GPA) of at least 3.0 in coursework required for the major. The National SMART Grant award is in addition to the student's Pell Grant award.

Federal PLUS Loans for ParentsFederal PLUS Loans for Parent are for parents of undergraduate students enrolled at least half time. The borrowing parent must have good credit. There is no income requirement to qualify. The amount borrowed cannot exceed the total cost of education per year, minus any financial aid received. The interest rate on new PLUS Loans is disbursed on or after July 1, 2006 is fixed at 8.5%. Repayment begins 60 days after the loan is fully disbursed.

See the Loan center for more detail and interest rates on Federal Stafford and PLUS Loans. Nellie Mae provides both Stafford and PLUS Loans, as well as private loans.

Federal PLUS Loans for Graduate and Professional StudentsFederal PLUS Loans for graduate students are for creditworthy graduate and professional degree students enrolled at least half time. The loan amount can be up to the cost of attendance minus other financial aid received.

To apply, students must complete a PLUS Master Promissory Note (MPN), which is valid for multiple years, and complete an annual request for a credit approval to continue borrowing Federal PLUS Loans. Students should complete a Free Application for Federal Student Aid (FAFSA) annually and borrow the maximum they are eligible for through Federal Stafford Loans before borrowing PLUS Loans.

Federal Work-Study (FWS)This program provides jobs on or off campus for undergraduate and graduate students. The pay for FWS jobs is at least the federal minimum wage but varies with the type of work and skills required. Job placement, pay scales, and work schedules are determined by the school.

Federal Perkins LoansThese are low-interest loans (5%) for students with exceptional financial need. The maximum annual loan amount is $4,000 for undergraduate students and $6,000 for graduate students. Repayment begins nine months after the student graduates or drops below half-time enrollment.

Federal Stafford LoansThese are low-interest loans made to undergraduate and graduate students who are enrolled in school at least half time. For new loans disbursed on or after July 1, 2006, the interest rate is fixed at 6.8%.

There are two types: subsidized and unsubsidized. Repayment begins six months after the student graduates or drops below half-time enrollment.

  • A Subsidized Federal Stafford Loan is based on financial aid eligibility (determined by the FAFSA). The government pays the interest while the student is in school, during the grace period, and during any authorized deferment periods.
  • An Unsubsidized Federal Stafford Loan is not need-based: It is available to eligible students at any income level. The student is responsible for paying interest on the loan. If you postpone paying interest while in school, the interest will be capitalized (added to the principal amount).
Annual and aggregate Stafford Loan limits AY 2007–08
Undergraduates Dependent Independent
First year $3,500 (inclusive of both subsidized and unsubsidized) $7,500 ($3,500 between subsidized and unsubsidized amounts plus an additional $4,000 unsubsidized amount)
Second year $4,500 (inclusive of both subsidized and unsubsidized) $8,500 ($4,500 between subsidized and unsubsidized amounts plus an additional $4,000 unsubsidized amount)
Third year and beyond $5,500 (between subsidized and unsubsidized amounts) $10,500 ($5,500 between subsidized and unsubsidized amounts plus an additional $5,000 unsubsidized amount)
Aggregate undergraduate  $23,000 (between subsidized and unsubsidized amounts) $46,000 (up to $23,000 may be in subsidized loans)
Graduate and professional $20,500 ($8,500 between subsidized and unsubsidized amounts plus an additional $12,000 unsubsidized amount)
Aggregate graduate $138,500 (not more than $65,000 may be subsidized loans)
Graduate health professional $47,167 ($20,500 total annual graduate professional Stafford, plus an additional $26,667 maximum HEAL limit in additional unsubsidized Stafford Loans)
Aggregate graduate $189,125 (not more than $65,500 may be subsidized loans)

Note: The amounts shown in the chart above are the maximum amounts that you may borrow for academic year. You might receive less than the maximum if you receive other financial aid that's used to cover a portion of your cost of attendance. The maximum amount you may borrow will also be less in certain situations, such as if you are an undergraduate student enrolled in a program of study that is shorter than an academic year. Your school can refuse to certify your loan or can certify a loan for an amount less than you would otherwise be eligible for if the school documents the reason for its action and explains the reason to you in writing. The school's decision is final and cannot be appealed to the U.S. Department of Education.

Federal Aid for Health ProfessionsFederal student aid is available from the U.S. Department of Health and Human Services for students in certain health professions programs. The student aid programs include Exceptional Financial Need (EFN) Scholarship; Financial Assistance for Disadvantaged Health Professions Students (FADHPS); Loan for Disadvantaged Students (LDS); Primary Care Loan (PCL); Nursing Student Loan (NSL); and Scholarship for Disadvantaged Students (SDS). Find out more about these programs by contacting the Bureau of Health Professions.

Private Loan Programs from Nellie MaeStudents and families who are not eligible for federal loans, or those who need to supplement federal financial aid amounts, may wish to get private student loans. Nellie Mae provides low-cost private student loans for undergraduate students and families and for graduate borrowers through the Signature Student Loan. The Signature Student Loan a popular after-Stafford loan with high approval rates and aggregate loan limits.

Visit Nellie Mae's Loan center for more details and to pre-qualify and apply online.

To check your credit report and determine if you are a creditworthy borrower, visit www.AnnualCreditReport.com.

Scholarships and Other ResourcesMany public and private foundations, businesses, and community organizations provide scholarships for higher education. You can search for scholarships online at www.CollegeAnswer.com.

Avoid using scholarship search services that charge a fee.

If you are a graduate student, you should also explore funding opportunities through your department, including teaching and research assistantships, as well as from professional organizations associated with your field of study.

Don't forget to consider other source, including:

  • Tuition reimbursement or scholarships from your parents' employers (or your employer)
  • Other family resources (For example, parents and grandparents can use funds from a 401(k) plan for qualified education expenses without paying an early withdrawal penalty.)

Ready to get started? See our Applying for financial aid page and take advantage of our Money-saving tips.