Further explanation of the different forms of financial aid available to students: The U.S. Department of Education awards about $150 billion every year to help millions of students pay for college. This federal student aid is awarded in the form of grants, low-interest loans, and work-study funds. Grants are typically awarded on the basis of need and generally do not have to be repaid. There are four types of federal student grants:
- Federal Pell Grants are usually awarded to undergraduate students who have not yet earned a bachelor’s degree. (In some cases, students enrolled in post-baccalaureate teacher certification programs may receive Federal Pell Grants.) The maximum Federal Pell Grant award for the 2013-2014 award year is $5,550; however, the actual award depends on the student’s financial need, the college’s cost of attendance, the student’s enrollment status, and the length of the academic year in which the student is enrolled. Students can receive the Federal Pell Grant for up to the equivalent of 12 semesters.
Loan consist of money that the student borrows to help pay for college, and must be repaid (plus interest). There are two federal student loan programs:
- William D. Ford Federal Direct Loan Program enables students and parents to borrow money at low interest rates directly from the federal government. The Direct Loan Program includes Direct Stafford Loans, which are available to undergraduate and graduate students, and Direct PLUS Loans, which are available to parents of dependent students and to graduate and professional-degree students. A Direct Stafford Loan might be subsidized or unsubsidized. Direct PLUS Loans are always unsubsidized. Subsidized loans are based on financial need and are available only to undergraduate students. The federal government pays the interest on subsidized loans while the borrower is in college and during deferment. Unsubsidized loans are based on the student’s education costs and other aid received. The borrower must pay all accrued interest on unsubsidized loans.
- Aid For The Military. For more information, visit http://studentaid.ed.gov/types/grants-scholarships/military.