Student financial aid in the
United States is funding that is intended to help students pay education-related expenses including tuition, fees, room and board, books, and supplies for education at a college, university, or private school.
General governmental funding in the form of subsidies for public education is not called financial aid.
Financial aid refers to awards to specific individual students. Certain governments, e.g.
Nordic countries, provide student benefit. A scholarship is sometimes used as a synonym for a financial aid award, although grants and student loans are also major components of financial aid packages from students' intended colleges.
The United States government and all
U.S. state governments provide merit- and need-based student aid including grants, work-study, and loans.
As of 2010 there are nine federal and 605 state student aid programs and many of the nearly 7,000 post-secondary institutions provide merit aid.
Major federal grants include the
Pell Grants,
Federal Supplemental Educational
Opportunity Grants,
Federal Work-Study Program, federal
Stafford Loans (in subsidized and unsubsidized forms), state student incentive grants and Federal
PLUS Loans. Federal
Perkins Loans are made by participating schools per annual appropriations from the
U.S. Department of Education. Federal Stafford Loans and Federal PLUS Loans are made by the U.S. Department of Education. As of
April 2010,
Congress voted to eliminate the
Federal Family Education Loan Program (
FFELP) which had allowed private lenders to make student loans guaranteed by the federal government.
State governments also typically provide some types of need- and non-need-based aid, consisting of grants, work-study programs, tuition waivers, and scholarships. Individual colleges and universities may provide grants and need- and merit-based scholarships. Students requiring financial aid beyond what is offered by their institutions may consider a private (alternative) education loan, available from most large lending institutions. Typically, education loans obtained through the federal government have lower interest rates than private education loans. Institutions may also offer their own student financial assistance, in the form of need- or merit-based aid, as well as endowed scholarships (with varying need and/or merit-based criteria). Some institutions may only require the
FAFSA; some may also require a need-based analysis document, such as the
CSS/Profile, to apply for such funds to apply a more stringent need analysis for the rationalization of institutional funds
.
In the United States, to apply for most student aid, a student must first complete the
Free Application for
Federal Student Aid (FAFSA). The application must then be submitted either electronically to the
United States Department of Education, using the Department of Education's website, mailing a paper form, or, as the law also authorizes, by getting professional assistance from a fee-based preparer.[1] A student's aid application (FAFSA) may be submitted to the Department of Education as early as
January 1 before the summer or fall when the student enrolls and must be re-submitted
with updated information each year.[2]
The FAFSA typically consists of 130 questions regarding a family's financial situation.[3]
The Department of Education processes each request and tells a student how much the federal government expects their family to contribute toward paying for college—the
Expected Family Contribution (
EFC). However, an EFC is not necessarily how much a student will pay for college — aid can reduce an individual's cost. Then, the post-secondary institutions to which a student applies, determine how much federal, state, and college-specific aid a student will receive. An individual's student aid award is likely to vary from institution to institution.
Grant programs include the
Pell Grant and the
TEACH Grant. Federal loan programs include the Federal
Direct Subsidized Loan and Federal Direct Unsubsidized Loans, the
Perkins Loan and the
Parent PLUS Loan and
Graduate PLUS. Unlike with federal grants, a borrower must repay the loan amount and any interest. Federal loans offer lower interest rates and better repayment terms than private student loans from banks and other financial institutions.
Students (or their parents/guardians) can take advantage of education tax benefits to ease the financial burden of attending college.
Education tax benefits added up to more than $6.8 billion in 2008–2009. Education benefit programs include the
American Opportunity Tax Credit and the
Lifetime Learning Tax Credit. These programs reduce a student's (or his or her parents'/guardians') taxable income while the student attends college.
http://en.wikipedia.org/wiki/Student_financial_aid_in_the_United_States
- published: 17 Jan 2015
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