Due to the rising cost of higher education, financial aid for college students has become a hot topic. Most individuals
seeking an associate’s or bachelor’s degree rely on financial aid in order to pay for their tuition, fees, textbooks, room, and board. In fact, two out of three undergraduate students receive some form of financial assistance, according to the U.S. Department of Education.
Purpose of Financial Assistance in College
The goal of financial aid is to make a college education more attainable for a wider range of individuals. The White House has found that students from high-income households are almost twice as likely to enroll in and complete college than students from middle class households. The numbers are even grimmer for low-income students. With the President’s focus on math and science education, sending the best and brightest to college is critical, no matter how much money their parents make. By providing financial aid for college students, government and private organizations attempt to even the playing field and move the country forward.
Federal Financial Aid
Federal assistance is the most common form of financial aid in the United States. The federal government is responsible for nearly 72 percent of aid funds. Students can take advantage of grants, which are monetary contributions that do not need to be paid back, and loans, which must be repaid after graduating or leaving school. Undergraduates receive about $4,900 per year in federal school grants and $7,100 in student loans. Grant assistance is typically limited to private scholarships at the graduate level, so candidates for a master’s degree, professional degree, or doctorate depend even more heavily on loan funds.
To access federal grants and loans, students must complete the Free Application for Federal Student Aid, known as the FAFSA. The FAFSA compiles a student’s academic and financial data for use in calculating expected family contributions. The final report helps a college’s financial aid office determine the amount of aid to award. Learn how to submit your application online here!
The FAFSA must be updated every year while the student is enrolled in school, either via the Internet or through postal mail. Most federal financial aid for college students is need-based, so the greater the financial need is, the higher the award amount.
School And College Grants
Families who can show evidence of financial hardship may be eligible for a federal grant program. One widely distributed grant is the Pell Grant, which gives students earning their first bachelor’s degree up to $5,550 per year. Like other forms of financial aid for college students, the Pell Grant is either applied to a student’s outstanding balance with the university or paid directly to the student for educational use, such as housing or books. It does not need to be repaid.
Regardless of financial need, students can qualify for federal Direct Stafford Loans. Loan amounts vary based on academic level, year of attendance, aggregate borrowing, and other factors. The interest rates offered for Stafford Loans are typically more affordable than loans through private lenders.
Stafford Loans are either subsidized, which means the government pays the interest while the student attends school, or unsubsidized. Students who demonstrate extensive financial need may qualify for Perkins Loans, which carry lower interest rates.
Financial Aid for College
When considering financial aid for college students, applicants should keep in mind federal, state, college, and private resources. Many entities offer their own awards, with various application procedures and dollar amounts. The aid provided by a specific institution may be based on need, scholastic merit, athletic ability, or a combination of factors.
A college education brings many benefits, including improved employment opportunities. The availability of financial aid for college students is often one of the main deciding factors when choosing to enroll in an institution of higher learning. Thoroughly researching the financial assistance options that are available can help make a college degree more affordable for any student.