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Paying for College > Overview
Federal Financial Aid
Scholarshp Tips
SCHOLARSHIP LISTINGS
What is Federal Financial Aid?
The first place to begin looking for aid is the U.S. Department of Education's Federal Student Aid program. Approximately two-thirds of all student financial aid comes from federal programs; and 50% of applicants receive free or "need-based" aid. The Department ED provides more than $67 billion, about 70 percent of all student aid, to help millions of students and families pay for postsecondary education.
The federal government is moving towards a paperless FAFSA filing. To begin, pick up and review the FAFSA form (available at the Educational Opportunity Center), assemble the necessary financial documents, then fill out the FAFSA form to use as a template for your on-line filing (fafsa.ed.gov). EOC counselors can help with the entire financial aid process including filing your application on-line. Call 984-3286 for an appointment.
The financial aid season begins every January with the release of Free Application for Student Aid (FAFSA) forms. The priority deadline for many colleges and scholarships that use the data, is March 1. A current federal tax return is required.
Types of federal aid
Federal financial aid can come in the form of federal grants, subsidized and unsubsidized student loans, and federal work study programs.
• Grants are free monies, up to $4,050 for a full-time student, that do not have to be repaid. It is awarded upon the basis of financial need, cost of attenance, enrollment status, and generally available only to undergraduate students.
• Federal work study provides funds for on-campus jobs.
• Loans are borrowed money, guaranteed by the federal government, that must be repaid with interest. The loan amounts are capped at certain amounts based upon your year in college. Both undergraduate and graduate students may borrow money.
Parents may also borrow to pay education expenses for dependent undergraduate students. Maximum loan amounts depend on the student's year in college and their dependent or independent status. See Collegebord.com's Federal Student Loans for more information about interest rates, eligibility, and maximum loan amounts.
The loans include:
1. Federal Stafford Loans are available to students in the form of subsidized and unsubsidized loans. Subsidized loans are awarded on the basis of financial need. The lonas are capped at $2,625 for a first-year student, $3,500 for a second-year student, and $5,500 for a third- and fourth-year student.
The student pays no interest until they enter a repayment period 6 months after they have stopped attending classes. Unsubsidized loans are not awarded on the basis of need. Instead, you'll be charged interest from the time the loan is disbursed until it is paid in full. You may capitalize this interest by adding the interest to the amount of your loan while you are in school or during other periods of nonpayment. It will increase the amount you must repay.
2. Parent PLUS loans are made to parents through two loan programs – Direct or private lender federally guaranteed loans. The William D. Ford Federal Direct Loan program allows eligible students and parents borrow directly from the federal government at participating schools. Direct loads consist of Direct Stafford Loans, Direct PLUS Loans, and Direct Consolidation Loans.
Private lenders participate in the Federal Family Education Loan Program (FFEL) by providing federally guaranteed funds. These consist of FFEL Stafford Loans, FFEL PLUS Loans, and FFEL Consolidation Loans,
3. Perkins Loans are offered by participating schools to students that demonstrate the greatest need.
Federal Financial Aid Eligibility
Requirements for Federal Financial Aid require:
• U.S. citizenship or eligible non-citizen state with a valid Social Security Number;
• a high school diploma, GED certificate, or passing an ability to benefit test;
• enrollment in an eligible program as a degree-seeking student;
• if male between 18 and 25, registration with Selective Service.
Filing a FAFSA
The Free Application for Federal Student Aid or FAFSA is used to determine your expected family contribution (EFC) or the amount of money you should be able to contribute toward the cost of your education. The COST OF ATTENDENCE minus your EFC equals your FINANCIAL NEED. Your FINANCIAL NEED is used by financial aid administrators at a college to determine your financial aid award.
The federal government considers a student a dependent of their parents if they are under 24 years old, unmarried, have no dependent,s and is not a veteran, graduate student, or orphan. All sources of income are needed to complete a FAFSA. This includes the student and parent's (if a dependent) prior year's federal income tax forms, retirement, welfare and/or social security benefits, child support, other non-taxable income, and investment, business, and savings assets.
NOTE: If the student has special circumstances which he/she feels may have an effect on his/her income for example, a divorce or death in the family, medical expenses, loss of employment, etc., the student should speak to the school’s financial aid officer directly. Maui Community College has a Change of Circumstance form that should be picked up and completed.
How Financial Aid Works
FinAid – the SmartStudent Guide to Financial Aid
Collegeboard.com – Paying for College
Financial Aid Myths - Don't Believe Everything You Hear
For more EOC financial resources, click on the following links:
Paying for College > Overview
Federal Financial Aid
Scholarshp Tips
SCHOLARSHIP LISTINGS
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