Financial aid tip of the month
The federal government sponsors numerous financial aid programs that can help students and their parents pay college expenses. Here are capsule views about some of the more common federal grant and loan programs, courtesy of The Student Loan People. Grants don’t have to be repaid, but loans do.
• Academic Competitiveness Grants provide up to $750 for college freshmen and $1,300 for college sophomores. Sophomores must have at least a 3.0 GPA to qualify.
• Federal Pell Grants provide up to $5,350 per year for undergraduate students.
• Federal Supplemental Educational Opportunity Grants provide up to $4,000 per year for undergraduate students who have exceptional financial need.
• SMART Grants are available to college juniors and seniors in certain areas of science, math and foreign language. They provide up to $4,000 a year.
• Federal Perkins Loans are for students with exceptional financial need. Undergraduates can get up to $5,500 per year, while graduate students can get up to $8,000 per year.
• Federal Stafford Loan. The largest federal loan program, these are available to undergraduate and graduate students. The maximum amount students can borrow depends on their year in school.
• Federal PLUS Loan. Parents of dependent undergraduate students may qualify for PLUS Loans. The amount available depends on how much other financial aid the student receives. Graduate students can receive PLUS Loans if they have exhausted all their Stafford Loan eligibility.
The Free Application for Federal Student Aid (FAFSA) is used to apply for all of these programs. People seeking a PLUS Loan must also submit a separate application.
Students interested in Stafford and PLUS Loans and parents interested in PLUS Loans should be smart consumers. Lenders may charge different fees and have different repayment incentives. Picking the right lender can save students and parents thousands of dollars in fee and interest payments.
The Student Loan People is a public, nonprofit corporation that provides education loans for students and parents through the Federal Family Education Loan Program (FFELP). For more information about student loans, visit www.studentloanpeople.com; write The Student Loan People, P.O. Box 24328, Louisville, KY 40224-0328; or call (888) 678-4625.
