How To Search for Financial Aid

Going to college has always been your dream but you're concerned about the rising cost of higher education and how and where you're going to get the funding. You have a ton of questions. Is aid available only for full-time students? Is aid available if you enroll online? What types of aid are available? How do you apply for aid?

Understanding financial aid and the application process is not always easy, even for the professionals. One article cannot provide all of the information you need, but it can give you a road map to get your started in the right direction.

Financial Aid: Who is Eligible?
To be eligible for federal financial aid, you must:

• Be a U.S. citizen or eligible non-citizen
• Be enrolled or accepted for enrollment as a regular student working toward a degree or certificate in an eligible program at a school that participates in the federal student aid programs This includes on-campus and online degree and certificate programs.

There are other specific requirements that may apply to some applicants. Talking with someone in the financial aid office is your best bet if you have special circumstances or are unsure of your eligibility status.

Most forms of federal, state, and institutional financial aid are available for students enrolled full time, part time, or half time although some aid programs have minimum enrollment requirements. Generally, students enrolled part time and half time receive proportionately less aid than full-time students. Again, you should direct specific questions about your situation to the financial aid office.

Financial Aid: What is Available?
A substantial amount of financial aid is available to help fund postsecondary education. The majority of financial assistance is available in the form of:

• Grants
• Scholarships
• Work-Study
• Loans
• Federal tax benefits

According to Trends in Student Aid 2006, published by the College Board, during 2005-06, undergraduate and graduate students received approximately $135 billion in financial aid in the form of grants, work-study, federal loans, and federal tax credits.

Grants
You can receive grant funding from:

• Federal government--Pell Grants, Supplemental Grants, Academic Competitiveness Grants, and National Science and Mathematics Access to Retain Talent (SMART) Grants provide 31% of the total aid for postsecondary education
• State governments--in 2004-05, individual states provided approximately $4.8 billion in need-based grants and $1.8 billion in non-need-based grants
• Colleges and universities--provide approximately 41% of the total grant aid for postsecondary education from their own resources
• Private sources--employers often provide employees with tuition reimbursement grants

Scholarships
Scholarship funding is offered for academic, artistic, and athletic talent; for study in a particular academic field; for students in a particular ethnic or underrepresented group; for recipients from specific geographical areas; as well as a variety of other very specific and sometimes unusual criteria. You can receive scholarships from:

• Colleges and universities--many educational institutions have substantial scholarship programs
• Private sources--service organizations, private donors, community and church groups, state and federal government agencies, and companies large and small to name a few

Work-Study
Although Work-Study provides only 1% of the total student aid available to students, you can earn some of your aid and get work experience as well; this could prove a valuable asset when you apply for a job after graduation. Work-Study jobs, often available both on- and off-campus, can complement and reinforce your career goals or provide valuable community service experience.

Loans
Federal education loans worth approximately $69 billion account for 51% of all student aid. The following federal education loans are available:

• Perkins Loans--administered by the educational institution and awarded to the neediest students, these loans have the lowest interest rate
• Stafford Loans for students--undergraduate and graduates students can borrow through the Federal Family Education Loan Program (FFELP) or the William D. Ford Federal Direct Loan Program (Direct Loans) depending on the program in which your college participates
• Stafford Loans for parents and graduate students--parents of undergraduate students as well as graduate students can borrow a PLUS Loan through the FFELP or Direct Loan programs

Students also borrowed an additional $17 billion in private nonfederal loans in 2006 to help finance postsecondary education.

Federal Tax Benefits
The federal government also provides another education-related benefit that is often overlooked in discussions of financial aid--tax credits and tax savings. According to Trends in Student Aid 2006, in 2004, 6.5 million taxpayers claimed about $3.8 billion in deductions for interest paid on student loans. Additional information about these benefits is available in IRS Publication 970, Tax Benefits for Higher Education.

Financial Aid: How do you Apply?
Applying for aid can be overwhelming and confusing. There are no 'secrets' to getting all of the financial aid available to you. The following basic steps can help you maximize your efforts to get financial aid:

• Step 1 - Contact the financial aid office
• Step 2 - File the Free Application for Federal Student Aid (FAFSA)
• Step 3 - Do additional research
• Step 4 - Be aware of deadlines and documents

Step 1 - Contact the Financial Aid Office
Campus financial aid offices generally make financial aid decisions about the upcoming academic year at the beginning of the calendar year before fall term. Professionals in almost any financial aid office can give you general information about what kinds of aid are available, how to apply, and what the deadlines are. The financial aid office on your campus can give you information about specific institutional deadlines you must meet to get the maximum financial aid for which you might be eligible. If you're applying for enrollment at several institutions, each one may have a different campus financial aid deadline. Make sure you know what they are. Never underestimate how much valuable information and assistance you can get from your financial aid office.

Step 2 - File the Free Application for Federal Student Aid
The gateway to most financial aid is the Free Application for Federal Student Aid (FAFSA). Information that you provide on the FAFSA is used by:

• The federal government to determine your eligibility for federal grants (Pell Grants, SMART Grants, and Academic Competitiveness Grants)
• State programs to determine your eligibility for state grants
• Most educational institutions to determine your eligibility for aid that they administer (institutional grants and scholarships, federal loans, and work-study)

States and individual campuses may have different deadlines by which you have to submit information. However, if you file the FAFSA shortly after January 1 (before the academic year for which you're applying for aid), you should be able to easily meet all deadlines.

The Department of Education estimates that it takes first-time users less than an hour to complete the FAFSA on the Web. They recommend that you download a FAFSA worksheet from www.fafsa.ed.gov and fill it out offline before you go online to complete the FAFSA. The FAFSA worksheet tells you what information you need to collect to help you complete the form.

Step 3 - Do Additional Research
Filing the FAFSA and completing any additional application information your institution(s) requests is a good start. These documents help determine your eligibility for federal, state, and institutional aid. There is also other aid out there if you're willing to take a little time to do the research. Try the following resources:

• The Web - FastWeb, a free scholarship search Web site, estimates that there are 1.3 million scholarship worth over $3 billion--well worth a little time on the Internet if you find even one scholarship. However, don't fall for sites that charge you a fee; use the free sites.
• Your Library - Libraries have scholarship compendiums that contain much of the same information available on the scholarship search sites on the Web.
• Your Community - service organizations, your high school, and local donors are a few of the resources that offer money for education.
• Employers - Many employers offer tuition reimbursement programs for current employees, some offer educational funding as a recruitment tool for future employees, and some offer scholarships to children of their current employees.

Step 4 - Be Aware of Deadlines and Documents
Okay, you've filed the FAFSA (hopefully shortly after January 1). Now you can just sit back and wait for the money to roll in, right? Unfortunately, no. Perhaps one of the most important tips is to be aware of deadlines and documents. They are often closely related and your inattention to these details can mean the difference between a good financial aid package and one that's not so good. The best advice is to make sure you're organized, never ignore any correspondence sent to you about your application, read everything carefully, and if you have questions, ask someone in the financial aid office for help.

Financial Aid: Parting Comments
Understanding financial aid and the application process is not always easy, even for the professionals. One article cannot provide all of the information you need, but it can give you what you need to get started. You can maximize your financial aid quest for funding by using the information in this article as a guideline, staying organized, paying attention to deadlines, and forming a partnership with your financial aid office.

Sources:
Trends in Student Financial Aid 2006, College Board
FastWeb
FAFSA on the Web
Degrees of Wisdom