With today's increasing college costs, traditional funding from personal and family savings may not be enough. Many students will have to rely on outside sources to help finance their post-secondary education. There are many sources of aid available to students and their families - grants, scholarships, loans, internships, work-study, as well as other more alternative approaches. The first step is to become acquainted with all financial aid options and then decide which are best for your particular situation.
Many of today's federal student assistance programs were authorized through the Higher Education Act (HEA) of 1965 under the Title IV provisions. As a result, federal grants, loans, and work-study aid are often referred to as Title IV programs. All Title IV programs are administered and regulated by the United States Department of Education (USDE). The funding for these programs is authorized by Congress, and, as a result, programs may undergo periodic congressional reviews, sometimes resulting in additional amendments and refinements. One of the biggest misconceptions regarding college financial aid is that it is available only for extremely low-income students.
In reality, aid comes in a variety of packages, with some programs open to students and their parents regardless of income while other student assistance programs are distributed based on a certain level of financial need. But no matter what your personal situation, if you want assistance in paying for college, you should apply. In fact you should apply every year you are enrolled in college because financial situations can change. Layoffs, illness, and divorce can significantly alter your family's or your need for assistance. Financial aid eligibility for need-based programs is based on a family's or an individual's previous year's income and is verified through income tax return forms. But last year's income may not accurately reflect what's available to you this year. In those cases when a significant change has occurred, income projected for the coming year can be used instead. Your financial aid advisor will have more information on this procedure.
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Federal Work-Study: a form of government financial aid in which the student's wage is subsidized 80 percent by the government and 20 percent by the employer
Financial Aid Package: the total aid that is given to the student, including public and private funds; includes all scholarships, grants, loans, and work-study programs for the student; the financial aid package is shown in detail in the award letter
Financial Need: used to describe a family's financial situation relative to anticipated college costs; typically, a low-income family will have a high degree of financial need and, therefore, qualify for any number of need-based aid programs
Free Money: financial aid that accrues no interest and does not need to be paid back
Grant: a financial gift that does not need to be paid back; most government grant awards are based on the financial need of the student
Loan: money that is borrowed from the government, a bank, credit union, or other lender that must be paid back; usually accompanied by interest charges
Scholarship: a financial gift that does not need to be paid back; scholarships are awarded based on a variety of criteria, including academic excellence, demonstrated talent, race, religion, group affiliations, state of residence, etc.; scholarships can also be awarded on the basis of need.
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