Types of Financial Aid
Sources of Funding
awards or grants are financial assistance provided to students that do
not have to be paid back if the student completes the term of enrollment
for which the grants are made. They are available from the federal and
are also considered gift awards and may be provided by the education
institution, employers, community agencies, corporations, or foundations.
Scholarships may be awarded to students on the basis of financial need;
commitment to work at a particular agency; ethnic background, hobbies,
gender, interests, or other characteristics of the student; or academic
Pell Grant Program is sponsored by the federal government to assist
students who have a financial need to pursue an education beyond the
high school level. Federal PELL Grants are awarded to students with
exceptional financial need and generally range from $400 to $3,125
annually. Congress does adjust the maximum annual amount of money that
can be awarded to students.
to Apply: Students must file
the Free Application for Federal Student Aid (FASFA). The FASFA form can
be obtained from a postsecondary/college financial aid office, high
school guidance counselors, state legislators, Pennsylvania Higher
Education Assistance Agency, and the United
States Department of Education.
Dates: All first-year students needing financial assistance should
complete the FASFA by February 15 of the year that they will be starting
their freshman year. All other students should complete a renewal
application for student aid between January 1 and May 1 of the year that
the student will start subsequent academic years.
Amount: For 1999–2000, the maximum grant award was $3,125. The
maximum is subject to change each year depending upon action taken by
The student applicant must be a citizen of the United States (or a
legal, eligible alien), an undergraduate enrolled full- or half-time in
the education program, and demonstrate financial need. The student
cannot have already completed a bachelor’s degree.
of Financial Need: Financial need is defined as the difference
between the cost of education, amount of financial aid, and the amount
the student and/or family are expected to contribute toward the
determine eligibility for a grant, the federal government performs a
needs analysis using the information provided on the FAFSA form. The
school determines the cost of education for various categories of
students following federal guidelines. The federal government applies a
standardized formula to the information submitted on the FAFSA form to
arrive at an expected family contribution (EFC). The formula considers
the student’s status as a dependent or independent application, and
analyzes income, assets, benefits, family size, and many other factors to
arrive at an amount the individual or family can reasonably be expected
to contribute toward the costs of the education.
difference between the cost of education and the EFC determines the
students’ financial need that in turn drives the student’s
eligibility for and the amount of the Federal Pell Grant.
Provisions: No repayment is required, except in certain cases of
withdrawal from the education program.
more information: Contact the United States Department of Education
at 1-800-4FEDAID or visit their website.
Supplemental Educational Opportunity Grant (FSEOG)
is a federal grant that is available to needy students seeking their
first undergraduate degree and who have demonstrated exceptional
financial need. Priority for these FSEOG grants is given to those
students who receive Federal PELL Grants.
Higher Education Assistance Agency (PHEAA) Grant
PHEAA provides grants to
eligible Pennsylvania residents who are in need of financial assistance
as undergraduates to attend a postsecondary school that is approved by
to Apply: Students must file the Free Application for Federal
Student Aid (FASFA) form. The FASFA form can be obtained from a
postsecondary/college financial aid office, high school guidance
counselors, state legislators, PHEAA, and the United States Department
of Education. High school students who take the SAT or ACT during their
junior year will receive an application directly from PHEAA.
PHEAA has received the FASFA form, you will receive additional PHEAA
forms that will need to be competed and returned to PHEAA.
Dates: Students applying for a PHEAA grant should file information
with PHEAA by no later than May 1 each year.
Amount: PHEAA grant awards are dependent upon enrollment status,
cost of education, and financial need of the student. The maximum PHEAA
grant is $3,000 per academic year based on student need. Grant awards
are higher for Pennsylvania residents that attend Pennsylvania schools.
Those who applied in 1998–99, received up to $2,900 as a full-time
student at a Pennsylvania school and $600 at a school located outside of
Pennsylvania. Students enrolled on a half-time basis (at least 6 credits
or its equivalent) received up to $1,450 at a Pennsylvania school and
$300 at a school located outside of Pennsylvania.
The student applicant must be a citizen of the United States (or a
legal, eligible alien) and a Pennsylvania resident. The student must be
enrolled full- or half-time in the education program and must be
determined to have need for financial assistance. Family size, other
financial resources, enrollment status, and educational costs are
important in determining your eligibility for a PHEAA grant.
Provisions: No repayment is required, except in certain cases of
more information: Contact the Pennsylvania Higher Education Assistance
Agency at 1-800-692-7435 or at their website.
PHEAA, provides state grants for qualified veterans who need financial
assistance to complete approved programs of postsecondary education. All
veterans are considered without regard to the financial status of their
parents. Veterans may be able to receive up to $2,900 at a Pennsylvania
school or $800 at a non-Pennsylvania school approved for participation
in the state grant program. The exact amount that is awarded depends on
other benefits and aid received, as well other income and assets.
of War/Missing in Action Program (POW/MIA)
its POW/MIA Program, PHEAA also provides special state grants to the
dependent children of a member of the United States Armed Forces who
served in active duty after January 31, 1955, and who has been a prisoner
of war or reported missing in action and was a resident of Pennsylvania
for at least 12 months preceding his/her service on active duty.
Vocational Rehabilitation Program
Vocational Rehabilitation Program provides financial aid and support to
students with hearing, sight, and other disabilities. Students may
qualify for aid to cover tuition, fees, and room and board. Deaf
students may also be provided with interpreters and note takers. Blind
students may be provided with readers, tape recorders, and Braille
typewriters. Students who might be eligible for such assistance should
contact the Office of Vocational Rehabilitation or one of the district
offices of the Bureau of Blindness and Visual Services
variety of organizations may offer scholarships. Corporations, community
organizations, foundations, employers, and the education institution
that the student attends offer scholarships. Sometimes, in exchange for
accepting the scholarship, the student guarantees the organization that
provided the award that he/she will work in a particular region or
facility for a period of time after completing his/her education.
Students are encouraged to inquire about possible scholarships in their
local area and check out potential scholarship opportunities on the
Internet. One good source is UCLA’s link to free scholarship websites.
employers, as well as labor unions, have established programs to help
pay the cost of post-secondary education for the employee or the
employee’s children. Employers may have other requirements established
that relate to tuition assistance that should be explored to determine
whether those programs suit your needs. For instance, an employer may
expect that you pay for the course upfront, and upon successful
completion of the course, the employer may reimburse you for the cost
the course and its related materials.
grant monies that do not have to be paid back, aid in the form of loans
must be paid back to the lender.
Student Loan Programs:
Stafford Student Loan Program (Federal Family Education Loan Program)
Stafford Loans are long-term, low-interest loans made to students by
private lending institutions, such as banks, savings and loan
associations, and credit unions, through the Federal Family Education
Loan Program administered by Pennsylvania Higher Education Assistance
Agency. There are two types of Federal
Stafford Loans, subsidized and unsubsidized. With subsidized loans, the
federal government will pay the interest on the loan while a student is
still in school. The student must have “financial need” to qualify
for a subsidized Federal Stafford Loan. With unsubsidized loans, the
student is responsible for all the interest on the loan from the date
that the loan is disbursed. The interest rates on the Federal Family
Education Loan Program are variable. For loans disbursed after July
1995, the maximum annual rate was 8.25 percent for the subsidized and
unsubsidized federal loans. The interest rate is capped at 9 percent.
to Apply: The Free Application for Federal Student Aid (FAFSA) needs
to be completed to determine whether the student might qualify for a
subsidized loan. A
Federal Family Education Loan Program (FFELP) form must also be
completed. These forms are available through PHEAA and local lending
Dates: Students should apply for loans by the last day of the
current academic year. The processing of the loan can take up to eight
Amount: The maximum loan amount that can be provided to first year
undergraduate students is $2,625. Second year students can borrow up to
$3,500. And third or fourth year students can borrow up to $5,500
annually. These limits are the same for either the subsidized or
unsubsidized Federal Stafford Loan Program.
The student must be a resident in the state in which application for the
loan is made. Loans are available to students who are enrolled for at
least six credit hours during a semester and wish to borrow money for
their education. If financial need is demonstrated, the student may
obtain a subsidized student loan. Students who do not demonstrate
financial need for the loan may still borrow money under the federal
unsubsidized student loan program. The request is subject to the
lender’s approval based on educational costs less available resources.
Provisions: In the case of the a subsidized student loan, the
federal government will pay interest on the loan while the student
remains enrolled and for a six month grace period after the student is
no longer enrolled or has dropped to less than half-time status.
Repayment of the entire loan can extend for up to 10 years.
unsubsidized loans, the borrower must pay interest during the time that
he/she is in school. In either case, the lender may collect an insurance
premium of up to 3 percent of the loan principal as well as a 1 percent
origination fee. This amount will be deducted from the principal before
disbursement of the loan.
more information: For more information about Federal Family
Education Loans, contact your local back or the Pennsylvania Higher
Education Assistance Agency at (800) 692-7392 or visit PHEAA’s
Supplemental Loans for Student (SLS)
addition to subsidized and unsubsidized Federal Stafford Loans, Federal
Supplemental Loans for Students (SLS) are available for independent
students (those who are not dependent on their parents for financial
support and are generally 24 years of age or older). If you qualify as
an independent student, you can borrow up to $4,000 for your first or
second year, and up to $5,000 annually for your third, fourth or fifth
undergraduate years. Like unsubsidized Federal Stafford Loans, students
are responsible for all the interest on an SLS Loan from the date it is
disbursed. The Pennsylvania Higher Education Assistance Agency or a
local lender institution can provide applications for a Federal Stafford
Loan and SLS Loans.
PLUS Loans are for parents who want to borrow to help pay for their
children’s education. Federal PLUS Loans enable parents with a good
credit history to borrow for each child that is enrolled in a
postsecondary education program at least half-time and is a dependent
student. The annual loan limit for a PLUS Loan is the child’s cost of
education minus any estimated financial aid received. PLUS Loan payments
generally begin within 60 days after the loan is disbursed. The interest
rate on this loan is variable, but cannot exceed 9 percent. As with the
other Federal Stafford Loan programs, the lender may collect an
insurance premium of up to 3 percent of the loan principal as well as a
1 percent origination fee. This amount will be deducted from the
principal before disbursement of the loan. The PLUS Loan application can
be obtained from a local bank or lender institution.
Federal government provides money to colleges and vocational schools so
they can make loans to students. Repayment on these loans usually begins
six months after schooling ends.
The Nursing Student Loan
Program provides for long-term, low-interest loans to full-time and
half-time financially needy students pursuing a course of study leading
to a diploma, associate, baccalaureate, or graduate degree in nursing.
Federal funds for this program are allocated to accredited public or
not-for-profit schools. The school is responsible for selecting
recipients of the loans and determining the amount of assistance the
student requires. Students need to contact the financial aid office at
the school that they intend to apply for admission or where they are
Professions Student Loan
to the Nursing Student Loan Program, a student pursuing a degree in
dentistry, optometry, pharmacy, podiatric medicine, or veterinary
medicine may seek a health professions student loan from the school that
they plan to attend or in which they are enrolled. The schools
participating in the program are responsible for making reasonable
determinations of financial need, and providing loans to identified
students, which do not exceed the cost of tuition plus $2,500 for an
Student Loan Programs:
Pennsylvania Higher Education Assistance Agency
has developed the Keystone Stafford Loan Program to help Pennsylvania
students who have family incomes of less than $21,000. PHEAA will review
the Free Application for Federal Student Aid and automatically send an
application if you are eligible for Keystone Stafford Loans. Originator
fees on these loans are generally 1 percent compared to the typical 4
percent, and the interest rate on Keystone Stafford Loans is reduced by
1 percent when the first 36 payments are made on time.
Rewards Stafford Loans
Rewards is a new, low-cost Stafford Loan program for Pennsylvania
students and residents. PHEAA, Sallie Mae, and more than 230 banks and
credit unions participate in this loan program. Keystone Rewards Loans
are lower in cost and easier to repay. The originator fees on these
loans are generally 2 percent compared to the typical 4 percent, and the
interest rate is reduced by 2 percent when the first 48 payments are
made on time. The interest rate is further reduced by an additional
one-quarter percent if monthly payments are automatically withdrawn from
your checking or savings account. Keystone Rewards Loans do not impose
any family income limits and are available to United States residents
attending any approved school in Pennsylvania.
Rewards applicants must meet all eligibility criteria established by the
federal government for Federal Stafford Loans.