| 1. What is Financial Aid? | | | | Loan) Program. Both the FFEL and Direct Loan |
| Financial aid is monetary aid to help you pay for | | | | programs consist of what are generally known as |
| your college education. Aid is made available from | | | | 1. Stafford Loans (for students) and 2. PLUS loans |
| grants, college scholarships, student loans, and | | | | (for Parents).Schools generally participate in either |
| part-time employment from federal, state, | | | | the FFEL or Direct Loan program, but sometimes |
| institutional, and private sources. The types and | | | | schools participate in both. For either type of loan, |
| amounts of aid awarded are determined by | | | | you must fill out FAFSA, after which your school |
| financial need, available funds, student classification, | | | | will review the results and will review the results |
| academic performance, and sometimes the | | | | and will inform you about your loan eligibility. You |
| timeliness of application. | | | | also will have to sign a promissory note, a binding |
| 2. What is the FAFSA?FAFSA stands for Free | | | | legal document that lists the conditions under |
| Application for Federal Student Aid. The FAFSA is | | | | which you’re borrowing, and the terms under |
| the Federal Department of education’s | | | | which you agree to repay the loan. |
| primary application for financial aid and is the | | | | 7. Stafford Loans |
| gateway form to just about any other federal, | | | | Stafford loans are federal loans for students. |
| state or private grants, college scholarships, | | | | Eligibility rules and loan amounts are identical under |
| student loans or college work study programs. | | | | both the FFEL and Direct loan programs, but |
| The FAFSA form must be filled out each year | | | | providers and repayment plans differ. For all |
| between January 1 and March 10th (although | | | | Stafford loans first disbursed on or after July 1, |
| some colleges have their own earlier deadlines) | | | | 2006, the interest rate is fixed at 6.8 percent. |
| and can be completed online or by mail. Four to | | | | However, you can be considered for a subsidized |
| six weeks after you file the FAFSA (two to four | | | | loan, depending on your financial need, in which the |
| weeks if you filed electronically), you will receive | | | | government will pay (subsidize) the interest on |
| your Student Aid Report (SAR) which will contain | | | | your loan while you’re in school, for the first |
| a summary of the information you submitted on | | | | six months after you leave school and if you |
| your FAFSA and presents your Expected Family | | | | qualify to have your payments deferred. You |
| contributions (EFC) which tells you the amount | | | | might be able to borrow loan funds beyond your |
| your family is expected to contribute towards | | | | subsidized loan amount even if you don’t |
| your education. The amount of financial aid is then | | | | have demonstrated financial need. In that case, |
| determined approximately by the tuition of your | | | | you’ll receive an unsubsidized loan. Your school |
| college subtracted by your EFC.If you do not | | | | will subtract the total of your other financial aid |
| receive the SAR within a reasonable amount of | | | | from your cost of attendance to determine |
| time, you can call the Federal Processor at | | | | whether you are eligible for an unsubsidized loan. |
| 1-319-337-5665. Review the SAR carefully for | | | | Unlike a subsidized loan, you are responsible for |
| errors. If necessary, make any corrections on | | | | you’re the interest from the time the loan is |
| Part 2 of the SAR and return it promptly to the | | | | disbursed until the time it is repaid in full.After you |
| address listed on the form. You will then be sent | | | | graduate, you will have a six month |
| a new SAR with the changes made. | | | | ‘grace-period’ before you must begin |
| 3. What is the College Scholarship Services Profile | | | | repayment. During this period of time, you’ll |
| (CSS Profile)? | | | | receive repayment information, and you’ll be |
| Some colleges also require you to fill out a College | | | | notified of your first payment due date. You are |
| Scholarship Services Profile form in addition to the | | | | responsible for beginning repayment on time, even |
| FAFSA. It is a secondary financial aid form that | | | | if you don’t receive this information. You will |
| supplies further information about your family | | | | receive more detailed information on your |
| income. Be sure to check whether this form is | | | | repayment options during entrance and exit |
| necessary and about specific deadlines with your | | | | counselling sessions provided by your school. |
| college directly. | | | | 8. - Federal Family Education Loan (FFEL)Funds |
| 4. What is the difference between a Grant, a | | | | from your FFEL will come from a bank, credit |
| Student Loan and a College Scholarship?A grant is | | | | union or other lender that participates in the |
| free money from government or non-profit | | | | program. Schools that participate in the FFEL |
| organizations that does not need to be repaid. | | | | program, will usually have a list of preferred |
| Grants are usually determined by financial need | | | | lenders. Student loan borrowers may choose a |
| but can also be influenced by academic merit. | | | | lender from that list, or choose a different lender |
| Unlike grants, student loans are money loaned | | | | they prefer. Your loan money must first be |
| from an academic institution, financial institution, or | | | | applied to pay for tuition and fees, room and |
| federal government that must be repaid. Like a | | | | board and other school charges. If money |
| grant, a student scholarship is free money, but is | | | | remains, you’ll receive the funds by cheque |
| generally offered through colleges, businesses, | | | | or in cash.Besides interests, you will pay a fee of |
| private individuals and outside sponsors. Those | | | | up to 4 % of the loan, deducted proportionately |
| awarded by the college itself are often called | | | | from each loan disbursement. For a FFEL Stafford |
| MERIT AID. While grants tend to be issued | | | | Loan, a portion of this fee goes to the federal |
| according to financial need, college scholarships are | | | | government, and a portion goes to the guaranty |
| awarded on a broad-base of criteria, the most | | | | agency (the organization that administers the |
| common being academic merit. Furthermore, to | | | | FFEL Program in your state) to help reduce the |
| receive any grants or loans you must complete a | | | | cost of your loans. |
| FAFSA, however, many scholarships may not | | | | 9. - Direct LoanUnder the direct loan program, the |
| require you to complete a FAFSA to be eligible. | | | | funds for your loan come directly from the |
| Instead, you may need to obtain application | | | | federal government and you will need to repay |
| material directly from the donor of the | | | | your Direct Loan to the U.S. Department of |
| scholarship. | | | | Education’s Direct Loan Servicing Center. Like |
| 5. What are the different kinds of grants?There | | | | the FFEL loan, you will pay a fee of up to 4 % of |
| are federal as well as campus-based (institutional) | | | | the loan. For a direct Stafford Loan, the entire fee |
| grants. Federal Grants are free gift money from | | | | goes to the government to help reduce the cost |
| the Federal Department of Education while | | | | of the loans. |
| campus-based grants are government funds | | | | 10. PLUS Loans (Parent Loans)Parents can borrow |
| issued directly from your college. The | | | | a PLUS Loan to help pay your education |
| campus-based grants provide a certain amount of | | | | expenses if you are a dependent undergraduate |
| funds for each participating school to administer | | | | student enrolled at least half time in an eligible |
| each year. When the money for a program is | | | | program at an eligible school. PLUS Loans are |
| gone, no more awards can be made from that | | | | available through the Federal Family Education |
| program for that year, so make sure you find | | | | Loan (FFEL) Program and the Direct Loan |
| out about the types of grants awarded by each | | | | Program. Your parents can get either loan, but |
| college you are considering as well as their specific | | | | not both, for you during the same enrolment |
| deadline.Below are some of the most common | | | | period. They must also have an acceptable credit |
| grants.Federal Grants | | | | history.For a Direct PLUS Loan, your parents must |
| Pell Grants are considered a foundation of federal | | | | complete a Direct PLUS Loan application and |
| financial aid, to which aid from other federal and | | | | promissory note, contained in a single form that |
| non-federal sources might be added. Pell Grants | | | | you get from your school’s financial aid |
| are usually only awarded to undergraduate | | | | office.For a FFEL PLUS Loan, your parents must |
| students who have not earned a bachelor’s | | | | complete and submit a PLUS Loan application |
| or a professional degree. The amount you get | | | | available from your school, lender, or your state |
| depends on your financial need, your college’s | | | | guaranty agency. After the school completes its |
| tuition, your status as a full-time or part-time | | | | portion of the application, it must be sent to a |
| student and your plans to attend school for a full | | | | lender for evaluation. |
| academic year or less.The Academic | | | | What are the different kinds of |
| Competitiveness Grant is a new grant available to | | | | scholarships?Scholarships are awarded on a |
| first year college students who graduated from | | | | broad-base of criteria, the most common being |
| high school after January 1, 2006 or for second | | | | academic merit. Many scholarships carry conditions |
| year college students who graduated from high | | | | besides academic merit, such as financial need, |
| school after January 1, 2005. Only students who | | | | affiliation with a group-, leadership, athletic talent, |
| are eligible for a Federal Pell Grant and who has | | | | artistic or musical ability etc. Some scholarships |
| successfully completed a rigorous high school | | | | are awarded by the college itself, often called |
| program as determined by the state or local | | | | MERIT AID. Other scholarships are awarded by |
| education agency and recognized by the | | | | outside sponsors. For some scholarships, you need |
| Secretary of Education. An Academic | | | | to be nominated. For most of them, you apply |
| Competitiveness Grant will provide up to $750 for | | | | directly to a sponsor. Because there are so many |
| the first year of undergraduate study and up to | | | | different types of scholarships, you should check |
| $1,300 for the second year of undergraduate | | | | directly with your financial aid office at your |
| study for full-time students who are eligible for a | | | | college. |
| Federal Pell Grant.The National Science and | | | | Can I apply for a grant, a loan and a scholarship |
| Mathematics Access to Retain Talent Grant (AKA | | | | at the same time? Yes. You can team up |
| the National Smart Grant) is available during the | | | | different types of financial aid or simply have one |
| third and fourth years of undergraduate study to | | | | kind. Nevertheless, some types of financial aid are |
| full-time students who are eligible for the Federal | | | | contingent on others. For example, you can only |
| Pell Grant and who are majoring in physical life, or | | | | receive an Academic Competitive Grant or a |
| computer sciences, mathematics, technology, or | | | | Federal Supplemental Educational Opportunity |
| engineering or in a foreign language determined | | | | Grant if you have received a Pell Grant. While you |
| critical to national security. The student must have | | | | cannot team up a FFEL loan with a direct loan, |
| also maintained a cumulative grade point average | | | | you may be eligible to receive a subsidized loan (in |
| (GPA) of at least 3.0 in coursework required for | | | | which the interest is paid by the government) and |
| the major. The National SMART Grant award is in | | | | an unsubsidized loan (in which you are responsible |
| addition to the student’s Pell Grant | | | | for the interest) at the same time. You can also |
| award.Campus-based Grants The Federal | | | | combine grants with loans and scholarships, so it |
| Supplemental Educational Opportunity Grant | | | | never hurts to try to get as many different |
| (FSEOG)The FSEOG is a campus-based grant | | | | varieties of aid as possible! |
| aimed at assisting students with exceptional | | | | What is the Federal Work Study Program?The |
| financial need. Pell Grant recipients with the lowest | | | | Federal Work-Study Program (FWS) is a |
| expected family contributions (EFCs) will be | | | | campus-based program that provides part-time |
| considered first for a FSEOG. You can receive | | | | jobs for undergraduate and graduate students |
| between $100 and $4,000 a year depending on | | | | with financial need, that allows them to earn |
| when you apply, your financial need, the funding | | | | money to help pay education expenses. The |
| at the school you are attending, and the policies | | | | program encourages community service work |
| of the financial aid office at your school. | | | | and work related to the recipient’s course of |
| 6. What are the different kinds of student | | | | study. |
| loans?A student loan is money that needs to be | | | | How often should I apply for financial aid?You will |
| repaid after you have completed your studies. | | | | need to apply for financial aid each year. Even if |
| Generally, interest rates are low- so that you do | | | | you did not qualify this year, you should reapply |
| not rack up as much debt as you would with a | | | | next year since financial circumstances can |
| credit card or bank loan.There are campus-based | | | | change. The number of family members in college, |
| loans, which you repay directly to your college, as | | | | for example can have a big impact on your |
| well as federal loans which you repay either | | | | eligibility for financial aid. If you submitted a FAFSA |
| directly to the U.S. government or to your | | | | during the previous year, you may be able to |
| financial institution.Campus-based LoansFederal | | | | complete the shorter Renewal FAFSA form |
| Perkins LoanThe Federal Perkins loan is a campus- | | | | instead. The renewal FAFSA will be mailed to your |
| based loan because it is administered directly by | | | | home. The renewal FAFSA preprints most of |
| the financial aid office at each participating school. | | | | your answers from the previous year’s |
| In other words, your school is the lender although | | | | FAFSA. Verify that the old responses are still |
| the loan is made with government funds. Your | | | | accurate and provide corrections or new answers |
| school will either pay you directly or apply your | | | | where appropriate. If you don’t receive a |
| loan to your school charges. You’ll receive the | | | | renewal FAFSA by February 15, fill out a new |
| loan in at least two payments during the academic | | | | FAFSA form. |
| year. You can borrow up to $4,000 for each year | | | | How do I know whether I am eligible for financial |
| of undergraduate study with a maximum of | | | | aid? |
| $20,000 for your entire undergraduate degree. | | | | Don’t assume that you will not qualify for |
| The amount you receive depends on when you | | | | financial aid. Nearly all U.S. citizens or eligible |
| apply, your financial need and the funding level at | | | | non-citizens enrolled at least half the time are now |
| your school. The Federal Perkins Loan is a | | | | eligible for some form of financial aid. Even if you |
| low-interest , 5 % loan for students with | | | | don’t qualify for a grant, free college info is |
| exceptional financial need. You must repay this | | | | still available, and you may still be eligible for other |
| loan directly to your school and you have nine | | | | forms of financial assistance. Many families |
| months to begin your repayment plan after you | | | | don’t apply for financial aid, because they |
| graduate. Generally you will make monthly | | | | believe that they earn too much money. |
| payments to the school that loaned you the | | | | However, you don’t need to be from a |
| money over a 10 year period.Federal LoansThe | | | | low-income family to receive financial aid. Some |
| U.S. Department of Education administers the | | | | loans and scholarships are available regardless of |
| Federal Family Education Loan (FFEL) Program and | | | | need. |
| the William D. Ford Federal Direct Loan (Direct | | | | |