Types of Financial Aid

Gift Awards/Grants

Loans

Other Sources of Funding


 

 

Gift Awards/Grants:

Gift 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 state government.

Scholarships 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 achievement.

Federal Grants:

  • Federal PELL Grant

The 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.

How 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.

Deadline 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.

Maximum Amount: For 1999–2000, the maximum grant award was $3,125. The maximum is subject to change each year depending upon action taken by Congress.

Eligibility: 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.

Determination 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 student’s education.

To 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.

The 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.

Repayment Provisions: No repayment is required, except in certain cases of withdrawal from the education program.

For more information: Contact the United States Department of Education at 1-800-4FEDAID or visit their website.

  • Federal Supplemental Educational Opportunity Grant (FSEOG)

This 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.

State Grants:

  • Pennsylvania 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 PHEAA.

How 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.

After PHEAA has received the FASFA form, you will receive additional PHEAA forms that will need to be competed and returned to PHEAA.

Deadline Dates: Students applying for a PHEAA grant should file information with PHEAA by no later than May 1 each year.

Maximum 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.

Eligibility: 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.

Repayment Provisions: No repayment is required, except in certain cases of fraud.

For more information: Contact the Pennsylvania Higher Education Assistance Agency at 1-800-692-7435 or at their website

  • State Grant for Veterans

Pennsylvania, through 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.

  • Prisoner of War/Missing in Action Program (POW/MIA)

Through 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.

 

 

Other Funding Sources:

  • The Vocational Rehabilitation Program

The 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

  • Scholarships

A 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.

  • Tuition Assistance

Many 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.

 

 

Loans:

Unlike grant monies that do not have to be paid back, aid in the form of loans must be paid back to the lender.

Federal Student Loan Programs:

  • Federal Stafford Student Loan Program (Federal Family Education Loan Program)

Federal 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.

How 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 institutions.

Deadline 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 weeks.

Maximum 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.

Eligibility: 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.

Repayment 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.

For 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.

For 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 website.

  • Federal Supplemental Loans for Student (SLS)

In 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.

  • Federal PLUS Loan

Federal 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.

Other Federal Programs:

The 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.

  • Nursing Student Loan

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 enrolled.

  • Health Professions Student Loan

Similar 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 academic year.

State Student Loan Programs:

  • Keystone Stafford Loans

The Pennsylvania Higher Education Assistance Agency (PHEAA) 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.

  • Keystone Rewards Stafford Loans

Keystone 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.

Keystone Rewards applicants must meet all eligibility criteria established by the federal government for Federal Stafford Loans.

 

 

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