Federal Financial Aid: Overview

One of the first places to look for financial aid is the federal Department of Education. It is the source of 60 billion dollars in financial aid annually in the form of loans, grants and work study programs. Applying for federal financial aid isn’t difficult, but the qualifications must be followed closely. Federal financial aid is available to citizens and legal non-residents who have completed high school. You must also have a social security number to apply. Finally, if you are a male between 18 and 25, you must register with the Selective Service before applying for federal financial aid.

Federal financial aid for college falls into two categories. Some of the money is given to students according to their financial needs. This helps to ensure that all citizens, regardless of financial situation, are given the same educational opportunities. The second category involves federal aid in the form of financing loans that are not necessarily based upon financial need.

There are a number of needs-based federal support opportunities. For instance, Pell Grants are free money grants are given to undergraduates who do not have a degree or professional certificate. In the 2009-10 academic school year, the maximum Pell Grant award was $5,350. Federal Supplemental Educational Opportunity Grants (FSEOG are designed for undergraduates and range from $100 to $4,000 annually, and are also based upon financial need. Academic Competitiveness Grants (ACG) are given to freshman and junior undergraduates with a cumulative grade point average of at least 3.0 in their first undergraduate year. Perkins Loans are a federal needs-based loan for education that is campus-specific, so not all schools offer them. The U.S. Department of Education also administers Federal Family Education Loans (FFEL) and Direct Loans, which are collectively known as Stafford Loans.

Federal Work-Study Programs are another way to cover the costs of your college education. A work-study program positions you in a campus or community service job at a reasonable salary for a specific number of hours per week.

The Department of Education will assign you a personal identification number so that you can apply for federal financial aid online. Next, you’ll need to devote some time to completing the Free Application for Federal Student Aid, or FAFSA. It can be completed online or with a paper form that is mailed in; however, it must be delivered no later than June 30 of the year you intend to begin college. Due to limited funding, it’s far better to complete the FAFSA as early in the year as possible.

A Student Aid Report (SAR) will become available once your application is processed. The SAR explains both the types and amounts of federal aid you are eligible for. This figure is determined by your anticipated college expenses and your family’s available resources. You can arrange for your SAR to be mailed to the colleges at which you intend to apply so that they can create a complete financial aid package based upon your particular needs.