The U.S. Department of Education has several programs, involving grants, loans, and work-study, available for post-secondary education. Aid from most programs is awarded on the basis of financial need, with a couple of exceptions in the loan programs. In determining need, both the cost of education and an Expected Family Contribution (EFC) are considered.

The EFC is calculated using a formula established by Congress. Factors such as taxable and nontaxable income, assets (e.g., savings, checking accounts, family businesses, and real estate holdings), and benefits (unemployment and Social Security, for instance) are all considered in the calculation.

Federal programs include the following:

Pell Grants: These grants are generally awarded to undergraduates based on need and family income qualifications. The size of the grant depends on program funding. The maximum award for the 2008–2009 award year is $4,800.

Supplemental Educational Opportunity Grants: These grants are earmarked for undergraduates who are in greater need than Pell Grant applicants. This money is supplied by the federal government, but the distribution of funds is carried out by individual colleges. The availability of these grants may be limited, depending on how much funding is allocated to a particular school. Annual grants range from $100 to $4,000.

Federal Perkins Loan: These loans are generally available for students with exceptional financial needs. Factors that determine qualification for a Perkins Loan are 1) when the application is submitted, 2) a student’s financial need, and 3) the funding level for the particular school. An eligible undergraduate student can borrow up to $4,000 per undergraduate year of study, not to exceed a total of $20,000. An eligible graduate student can borrow up to $6,000 per graduate year of study, not to exceed a total of $40,000. Interest is 5 percent. If the borrower is more than a half-time student, repayment begins nine months after the recipient graduates or leaves school. (These nine months are called the "grace period." Students who are attending school less than half time may have a shorter grace period.) Payments can be spaced over a maximum of ten years after the grace period expires.

Federal Work-Study Program: This program essentially provides an award in exchange for work. The typical school work schedule is about 12 to 15 hours per week (up to 40 hours per week during vacations). These jobs may be on or off campus, but, if off campus, are generally with a government agency or non-profit organization (under some circumstances, a school may have arrangements with a private for-profit company). When possible, the jobs are related to the student’s major. The pay is generally modest, but is at least minimum wage. However, hours and compensation cannot exceed the Federal Work-Study award.

Direct Stafford Loans: This is a federally insured, subsidized loan program that permits eligible students to borrow at favorable interest rates. These loans are typically arranged through private lenders. The program offers four flexible loan repayment options.

PLUS (formerly "Parents’ Loans for Undergraduate Students"): Parents are eligible for this loan if they pass a credit check. The amount of the loan is generally limited to the actual "cost of attendance" minus any financial aid already received. Parents taking this loan must begin repayment sixty days after the final loan disbursement for the academic year. Interest on PLUS loans is variable, but cannot exceed 9 percent.

Some states base their programs not only on need but also on academic performance. The recipients of state loans generally must be legal residents of the state and enrolled in a college or university within their state. In addition, some states have "reciprocity agreements" with other states.

No matter how slight you believe your chances of receiving aid are, apply. You may qualify for more aid than you think.

For more information please make an appointment for consultation.