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With the cost of college nearing $75,000 at many private universities around the country, now more than ever it’s vital to explore all of your financial aid options. Fortunately, the federal government offers several different grants and student loans, as well as a work-study program to help offset the cost of going to school.
While you need to demonstrate financial need for many of the options listed on this page, there are some types of aid that are open to all students. Because of this, we recommend completing the Free Application for Federal Student Aid (FAFSA) even if you’re not sure whether you’ll qualify.
When looking to pay for school, grants are one of the first options you should turn to since the funds don’t need to be repaid. The federal government offers several options, though eligibility requirements vary by program.
Of all the federal student grants available, the Federal Pell Grant is the most common. How much you qualify for depends on your financial need and whether you’re enrolled full time or part time — among other factors.
The ins and outs of the Federal Pell Grant
Like the Pell Grant, the Federal Supplemental Educational Opportunity Grant (FSEOG) is reserved for students who show exceptional financial need. How much you qualify for depends on how soon you submit the FAFSA, how much other aid you receive, your financial need and the availability of funds at your school.
You could qualify for the Teacher Education Assistance for College and Higher Education (TEACH) Grant if you’re planning on becoming a teacher at a low-income school or in a high-needs field — such as math or science. Keep in mind the grant funds you receive will convert to an unsubsidized loan if you don’t fulfill the teaching requirements listed in your TEACH Grant Agreement to Serve. You must provide proof that you’re meeting the teaching requirements each year — until your service agreement expires.
The Iraq and Afghanistan Service Grant was created for students who lost a parent in military service performed in Iraq or Afghanistan after 9/11. However, you can only qualify if you’re not eligible for the Federal Pell Grant based on need.
If you’re unable to cover all of your college expenses through grants, you may need to consider loans. We recommend looking into your federal loan options before turning to private lenders since interest rates are typically lower and repayment plans are more flexible.
Of all the federal loan options, Direct Subsidized Loans are ideal since interest doesn’t accrue while you’re an active student. However, they’re only available to undergraduate students who demonstrate financial need. Unlike private student loans, your credit score and income aren’t taken into consideration.
Take a deeper dive into Direct Subsidized Loans
Direct Unsubsidized Loans are easier to qualify for since you don’t have to show financial need. They’re open to both graduate and undergraduate students, though how much you’re eligible for depends on whether you’re an independent or dependent student and your year in school. Unlike subsidized loans, interest accrues while you’re in school — making your loan more expensive in the long run.
The ins and outs of Direct Unsubsidized Loans
PLUS loans can be a useful resource for filling gaps in funding after you’ve exhausted your free aid and other federal loan options. Parent PLUS Loans can be taken out by a parent on behalf of their dependent child.
Graduate PLUS Loans are reserved for graduate and professional students. Both types of PLUS loans require you to meet credit requirements — or apply with a creditworthy cosigner.
The ins and outs of Direct Unsubsidized Loans
Federal student loans have more flexible repayment options than private loans. You can hold off on making repayments until six months after you graduate or otherwise drop below half-time enrollment. From there, you’ll be automatically enrolled in the Standard Repayment Plan — which comes with full principal and interest repayments evenly divided over 10 years.
However, if that plan doesn’t work for you, you have seven other repayment plans to consider — including those based on your income — with terms up to 25 years. What plans you qualify for depend on the type of federal loans you have, when you took out the loans and your income. You can compare all of the options available to you with our guide to student loan repayment plans.
The Federal Work-Study Program provides part-time employment on or off campus for undergraduate, graduate and professional students who demonstrate financial need. All work-study jobs will pay at least the federal minimum wage, though it might be higher depending on the type of work you’re doing.
How much you qualify for varies by financial need, when you submit the FAFSA and your school’s funding level. However, the average award amount for the 2019 academic year was $1,808, according to Sallie Mae’s report on How America Pays for College.
Take a deeper dive into the Federal Work-Study Program
To apply for all types of federal student aid, you need to submit the FAFSA. While deadlines vary by school, we recommend submitting it as soon as you can after applications open on October 1st each year. This is because many types of federal aid are offered on a first-come, first-served basis.
Check out our step-by-step guide to filling out the FAFSA to get started.
If you’ve exhausted all of your federal aid options and still have gaps in funding, consider one of these options:
The US Department of Education offers a slew of financial aid options to help offset the cost of getting your degree. Some are open to all students who meet general federal aid requirements, while others are only available to students who can demonstrate financial need. Regardless, filling out the FAFSA as soon as you can will help ensure you receive the most aid available to you.
Need more funds? Check out our guide to student loans to compare lenders and learn more about how they work.
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