Jul 21st, 2008 by admin
This is a 3 part guide on student loans and grants. The first part covers the importance of higher education and how to qualify for federal student grant, while the second part touches on the various types of student grants available and how does one go about applying it and finally, the lat part discuss about federal versus private student loans that are available and their qualifications .
A post secondary education gives you more opportunities. Those who receive education credentials beyond a high school diploma have more jobs to choose from and earn much more than those who do not pursue an education beyond high school. For example, according to the U.S. Census Bureau, a person with a bachelor’s degree earns almost double than someone with only a high school diploma .
Pursuing education beyond high school is an opportunity you should not deny yourself simply because you are not sure it’s for you.
Many students don’t know what career path to follow. But exposure to different academic subjects, people and points of view helps you decide what career you would like to pursue. After high school, you get to study what you are interested in and, when you graduate, you will get paid for your knowledge.
The cost of education beyond high school continues to rise. Education is your most important first step toward success. Education creates opportunities. No qualified student should be denied an education because the cost is too high. So, if you’re considering education beyond high school and wondering how you will pay, part 1 of this guide can help. There’s money available—but you need to apply to be eligible. We tell you exactly how in this guide.
In fact, the guide will tell you most everything you need to know about federal student assistance programs—grants, loans, work-study and more. It leads you step by step through the process—including completing the required application. So rest easy, the guide explains everything in simple, direct terms.
Whatever type of school beyond high school you attend—whether it’s university, trade school or community college—you have to be thinking about how you’re going to pay for it. The cost of education continues to rise. But if you’re determined to achieve the success that education beyond high school can bring, the investment is worth it. But that doesn’t mean managing these costs isn’t a challenge.
The purpose of this guide is to steer you step by step through the process of applying for and receiving aid and repaying student loans. Now is the time to take action. You may qualify for more financial aid than you think. But you won’t know until you follow the steps we describe here. Investing a little time now could pay off in a brighter future.
What is federal student grant ?
Federal student grant is financial assistance through the U.S. Department of Education available to eligible students enrolled in an eligible programs as regular students at schools participating in federal student grant programs.Federal student grant covers school expenses such as tuition and fees, room and board, books and supplies and transportation. This grant can also help you pay for a computer and dependent child-care expenses. (Note that accepting any Title IV student financial grant does not commit the student to military or other government service.)
Who gets federal student grant ?
Eligibility for most federal student grant programs is based on financial need and several other factors. Your eligibility is determined by the information you provide on the FAFSA.
Basic eligibility requirements :
• Demonstrate financial need
• Be a U.S. citizen or eligible noncitizen* (for most programs) with a valid Social Security number (SSN).
• Be working toward a degree or certificate in an eligible program.
• Show, by one of the following means, that you’re qualified to obtain a post secondary education: ie. Have a high school diploma or a General Educational Development (GED) certificate.
Pass an approved ability-to-benefit (ATB) test (if you don’t have a diploma or GED, a school can administer a test to determine whether you can benefit from the education offered at that school).
(a) Meet other standards that your state establishes and that we have approved.
(b) Complete a high school education in a home school setting approved under state law.
• Register (if you haven’t already) with the Selective Service, if you’re a male between the ages of 18 and 25.
• Maintain satisfactory academic progress once in school.
All eligible students can benefit from financial assistance for education beyond high school. Congress authorizes billions of taxpayer dollars for this purpose every year. The amount and type of federal grant provided doesn’t always depend solely on financial need. Once students apply for aid, many are surprised by the amount of grant they receive.
So a good rule of thumb is: Don’t assume you’re not eligible. Take the time to complete and submit the Free Application for Federal Student Aid—the FAFSA (more on that later).
The U.S. Department of Education, Federal Student Grant offers a variety of student financial grant programs, which are described in this guide along with other sources you can turn to for financial help in completing your education. Remember: the more you know about how to make your ambitions real, the closer you are to fulfilling them. It’s up to you to make it happen.
Education beyond high school is a big investment of time, money and effort. You’ll need to figure out how to pay for your education but all the effort you put into it will be worth it. Over a working life, a person with a bachelor’s degree will earn almost twice as much as someone with just a high school diploma. More education equates to higher earnings. This is most noticeable at higher education levels (see statistics below). The more education you have, the more you earn. So invest in your education; the payoff lasts a lifetime.
Remember to carefully evaluate all relevant aspects of the schools you’re considering. Just because a school participates in federal student grant programs doesn’t mean that the school offers quality education.
What questions should I ask when considering a college or career school ?
• Does the school off er the courses and type of program I want?
• Do I meet the admissions requirements?
• Does the school offer a high quality education?
• Does the school participate in federal student grant programs?
• Does the school offer services I need and activities I’m interested in?
Where can I find this information?
• Read the school’s catalog or introductory materials.
• Talk with students who currently attend or attended the school you’re considering to get their opinion of the school.
• Check the school’s Web site.
• Visit the reference section of your local library.
• Talk to high school counselors and your state higher education agency.
• Check to see if any complaints about the school have been filed with the local Better Business Bureau or the consumer protection division of the state attorney general’s office. Search for Better Business Bureau offices at www.bbb.org. You’re paying for a high-quality education. Make sure you get it.
Take the next steps.
Before enrolling, make appointments to visit the colleges or career schools you’re considering. Bring a list of questions to ask school representatives. Your education is a major investment, so find out as much information as you can before you enroll.
What kind of information should I get from a school?
• Find out if the school participates in federal student grant programs.
• Ask about the school’s accreditation, licensing and campus security.
• Find out the school’s loan default rate (the percentage of students who attended the school, took out federal student loans and failed to repay their loans on time). You might not be able to get aid from some of our programs at a school that has a high default rate.
• Find out the school’s job placement rates (the percentage of students who are placed in jobs relevant to their courses of study).
If the school advertises its job placement rates, it must also publish:
• the most recent employment statistics,
• graduation statistics, and
• any other information necessary to back up its claims.
This information must be made available at the time you apply for admission to the school. Make sure you get the information you need and check out all of your options as you prepare for education after high school. It’s never too early to get started pursuing a career, so don’t wait until the last minute to get started! Know what to expect from the schools you’re considering. Find out about financial aid at the school.
You have the right to receive the following information from the school:
• The location, hours and counseling procedures for the school’s financial aid office.
• The financial aid assistance available, including federal, state, local, private and institutional financial aid programs.
• The procedures and deadlines for submitting applications for each available financial aid program.
• The school’s criteria for selecting financial aid recipients.
• The school’s process for determining your financial need.
• The school’s process for determining the type and amount of assistance in your financial aid package.
• The method and timing of financial aid payments made to you.
• The school’s basis for determining whether you’re making satisfactory academic progress, and what happens if you’re not. (Whether you continue to receive federal student aid depends, in part, on whether you make satisfactory academic progress.)
• If you’re offered a Federal Work-Study job, the nature of the job, the hours you must work, your duties, the pay and the method and timing of payment to you.
Find out the school’s refund policy.
If you enroll but never begin classes, you should get most of your money back. If you begin attending classes but leave before completing your course work, you might be able to get some of your money back.
Find out the school’s return-of-aid policy.
If you receive federal student aid from any program mentioned in this publication (except for Federal Work-Study), and you withdraw from school, some of that money might have to be given back to the source by you or by your school. Even if you don’t finish your course work, you’ll have to repay the loan funds you received, minus any student loan funds your school has returned to your lender.
Find out the school’s completion and transfer-out rates.
If many students withdraw from a school, it might indicate a problem with the school. A school is required to disclose to current and prospective students the percentage of students who complete the school’s programs and the percentage of students who transfer out.
Reducing the Cost of Education
There are other options you might consider to lower the cost of your education after high school. The following are a few ideas to think about.
Lower-cost schools
If you’ll be working toward a bachelor’s degree, you might consider starting at a two-year community college and then transferring to a four-year school. Community colleges are usually less expensive than four-year schools. (Some four-year schools that are partially funded by local or state taxes can be less expensive as well.) Because attending a community college allows you to live at home, you can save money on room and board. If you decide to start at a community college, make sure your community college courses will transfer to your four-year college and that they will count toward your bachelor’s degree.
Many community colleges have “articulation agreements” with four-year colleges under which the coursework taken at the community college transfers into the four-year degree program. Be sure to ask about the types of articulation agreements the community college has, with whom, and for that programs of study. Discuss any concerns you have about transfer courses and credits with the college registrar at the college you’re transferring to. State Higher Education Agency Contact your state Higher Education Agency about any aid program or scholarship sponsored by your state.
Work or volunteer opportunities
You can work part-time to pay part of your costs. Be sure your work and school schedules don’t conflict and that you save enough time for studying.
Tax breaks
Certain borrowers can take a tax deduction for the interest actually paid on student loans. This benefit applies to all loans used to pay for post secondary education school expenses. The maximum deduction is $2,500 a year.
Hope or Lifetime Learning tax credit
You or your parents might also qualify for one or both of these tax credits. See page 15 for additional information about tax credits, deductions and the Internal Revenue Service.
DID YOU KNOW …
Nearly half of all undergraduates or their parents had their taxes reduced by an average of $600 by claiming education tax benefits under the Hope and/or Lifetime Learning tax credits.
Am I Eligible?
Basic requirements
To receive aid from the federal student grant programs discussed in this guide, you must meet certain criteria.
Financial need
Except for some loan programs, you must show that you have financial need, according to their requirements.
Education requirements
• You must demonstrate by one of the following means that you are qualified to enroll in post secondary education :
(a) Have a high school diploma or a General Educational Development (GED) certificate.
(b) Pass an approved ability-to-benefit (ATB) test. If you don’t have a diploma or GED, you can take an approved ATB test to determine whether you can benefit from the education offered at that school.
(c) Meet other standards your state established and that we have approved.
(d) Complete a high school education in a home school setting approved under state law.
• You must be enrolled or accepted for enrollment as a regular student working toward a degree or certificate in an eligible program.
• You must meet satisfactory academic progress standards set by the postsecondary school you are or will be attending. You might be able to receive aid for correspondence or telecommunications courses as long as they are part of a recognized certificate or degree program.
Legal and other requirements
• You must be a U.S. citizen or eligible noncitizen.
• You must have a valid Social Security number (SSN) (unless you’re from the Republic of the Marshall Islands, the Federated States of Micronesia or the Republic of Palau). If you don’t have an SSN, you can find out more about applying for one at www.ssa.gov or by calling 1-800-772-1213. TTY users can call 1-800-325-0778.
• When you apply for federal student grant, you sign a statement that certifies that you will use federal student aid for educational purposes only. You also certify that you are not in default on a federal student loan and do not owe a refund on a federal student grant (which could happen if you withdraw from school, for example).
• You must comply with Selective Service registration. If you’re a male aged 18 through 25 and you have not registered you can, at the same time you complete your FAFSA, give the Selective Service System permission to register you by means of the FAFSA. You can also register online at www.sss.gov or call 1-847-688-6888. TTY users can call 1-847-688-2567.
Drug Conviction?
Everyone must answer Question 31 on the FAFSA, “Have you been convicted for the possession or sale of illegal drugs for an offense that occurred while you were receiving federal student aid (such as grants, loans, and work-study) ?”
• Generally, if you have been convicted for the possession or sale of illegal drugs for an offense that occurred while you were receiving federal student grant, you will be ineligible for a period of time based on the type and number of convictions. If you answer “Yes” to this question, it is very important that you complete and submit the FAFSA to determine your eligibility. If you are submitting a paper FAFSA, you will be mailed a worksheet to assist you in determining whether your conviction affects your eligibility for federal student aid.
If you are applying using FAFSA on the Web at www.fafsa.ed.gov, you will be provided the electronic version of the same worksheet during your online session. If you need assistance or have any questions on how to answer Question 31, call 1-800-4-FED-AID (1-800-433-3243) for help from the Federal Student Aid Information Center.
What You Should Know Before You Apply
Even if you’re ineligible for federal student grant because of a drug conviction, you should still complete the FAFSA because most schools and states use FAFSA information to award non-federal grant.
• You have limited eligibility for federal student grant while you’re incarcerated. Generally, you’re only eligible for a Pell Grant and then only if you’re NOT incarcerated in a federal or state penal institution. “Match” requirements when you apply for federal student grant, as some of your information is verified with certain federal agencies, including the Social Security Administration (for verification of Social Security numbers and U.S. citizenship status) and the Department of Homeland Security (to verify Alien Registration numbers).
If the information doesn’t match, the discrepancy must be resolved before you can receive federal student grant. Your records will be checked against the database of National Student Loan Data System (NSLDS), to verify that you haven’t defaulted on your federal student loan, haven’t received an overpayment on a federal grant or a Federal Perkins Loan and haven’t borrowed more than the total limit allowed. We also check your record against Veterans Affairs if you answer that you are a male. Most males between the ages of 18 and 25 must register with Selective Service in order to be eligible for federal student aid.
DID YOU KNOW …
Federal Student Grant issued $83 billion in aid in 2007 (plus another $32 billion in consolidation loans). Ten million students in 6,200 post secondary institutions received these loans. Financial need and Expected Family Contribution (EFC) Aid for most of our programs is awarded based on financial need (except for unsubsidized Stafford Loans and PLUS Loans).
The EFC is a measure of your family’s financial strength and indicates how much of you and your family’s financial resources (for dependent students) should be available to help pay for your education. The EFC is calculated from the information you report on the FAFSA. Your EFC is calculated according to a formula established by law. Your family’s income (taxable and untaxed), assets and benefits (for example, unemployment or Social Security) are considered in determining your EFC. Your family size and the number of family members who will be attending a college or career school are also considered. Your EFC will appear on the Student Aid Report (SAR) you receive after you file your FAFSA.
To determine your financial need for federal student aid programs (except for an unsubsidized Stafford Loan), your school subtracts the Expected Family Contribution (EFC) from your cost of attendance. Determining Your Financial Need We use your Expected Family Contribution (EFC) to determine your financial need:
Cost of Attendance – Expected Family Contribution (EFC) = Financial Need
The school uses federal grants and other financial aid to meet your financial need.
Because the EFC formula must be applied to each family’s financial information, we cannot tell you here whether you will be eligible for federal student aid or estimate how much aid you might receive. You can use FAFSA4caster at www.FederalStudentAid.ed.gov to get an estimate of your financial aid award. The information you submit with FAFSA4caster can be used to populate your FAFSA on the Web when you’re ready to apply for aid (see page 3). But remember, to find out exactly what you will be eligible to receive, you must apply for financial aid. If you want to see how the EFC formula works, you can get detailed worksheets from our Web site at www.FederalStudentAid.ed.gov/pubs. Click on the year under “The EFC Formula” or you can call the Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).
After you receive your SAR, you might also receive an award letter from the school(s) listed on your FAFSA, especially the school(s) that offer you admission. Contact the financial aid office at the school(s) that sent you an award letter if you have questions about your student financial aid award.
I think I have some special circumstances in my family.
Are these considered in determining my financial needs?
The EFC formula is basically the same for all applicants, but there is some flexibility. Your financial aid administrator can adjust the cost of attendance or the information used to calculate your EFC to take into account your special circumstances. These circumstances could include your family’s unusual medical expenses, tuition expenses or unemployment.
The financial aid administrator must have compelling reasons to use professional judgment to make adjustments because of special circumstances. You will have to provide adequate documentation to support any adjustments for your federal student grant. The financial aid administrator’s decision as to whether you have special circumstances is final and can’t be appealed.
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