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When it comes to sniffing out financial aid for college-bound students, you need to know the three main categories of financial aid. And they are:
- Financial aid, grants and scholarships. This is financial aid that you don’t ever have to repay. It’s provided by private sources, foundations, businesses and state or local governments.
- Loans. These can be student loans for students or parents, and they’re either subsidized by the federal government or provided by private lending institutions. Students can apply for the Federal Perkins Loan or the Federal Direct Loan. The Federal PLUS loan is for parents. Students or parents can apply for loans from private lending institutions such as Key Bank, Nellie Mae, The Education Resources Institute or First Marblehead Bank. Oftentimes these loans feature a lower interest rate than the prime lending rate for most credit cards, with a generous repayment timetable.
- Work-study. Work-study arrangements are federal programs that are orchestrated through your educational institution. In return for your work, your tuition is reduced. Work-study is sort of a cousin to internships, in that it can be related to your major. Internships may be paid or unpaid, whereas work-study lowers your tuition bill. Work-study is usually performed on campus, but sometimes it can be conducted off-campus at nonprofit or government agencies.
Obviously, of the three categories, financial aid, grants and scholarships are the most desirable types of financial aid! That’s because they’re free money. They never have to be repaid, and the only work you have to perform to obtain them is completing the necessary application process. In other words, jumping through just a few small hoops!
Most scholarships are awarded based on your academic performance in high school. So if you’re a senior, don’t start slacking off! As for grants, most are awarded based on your family’s financial need. Loans are also awarded based on financial need. And work-study arrangements are awarded based on your family’s financial need plus your individual job skills.
So the $64,000 question is, where can you find this money?
- FAFSA: www.fafsa.ed.gov. FAFSA stands for Free Application for Federal Student Aid. You can request a paper application or apply online. If you apply online, you receive your qualification results sooner than applying via the traditional paper method. You can also call 800.433.3243, or 800 4 FED AID. You can get your FAFSA PIN at www.pin.ed.gov. You can use the same PIN for as long as you’re in college. The PIN can be assigned to students or parents.
- U.S. Department of Education Federal Student Aid: www.studentaid.ed.gov. Covers a broad range of financial aid topics, including how to repay student loans. You can also browse an online version of The Student Guide booklet at www.studentaid.ed.gov/guide.
- Full-time education awards in return for community service: AmeriCorps, www.americorps.org. Click on "Benefits of Americorps Service" under "Individuals" or call 800.942.2677.
- Private scholarships and grants: www.fastweb.com and www.wiredscholar.com.
- Federal Pell grants: www.ed.gov/programs/fpg/index.html.
- www.collegeboard.com Click on "For Parents" under "More Tools" select "Calculators: College Financing."
- Free college scholarship database: www.fastaid.com.
- www.actstudent.org Click on "Financial Aid."
- State Student Incentive Grant, or SSIG, jointly funded by individual states and the U.S. Department of Education: Check your state government or state Department of Education.
Now you’re off and running!
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