Getting the most out of Financial Aid

The 2016 – ­2017 Free Application for Federal Student Aid (FAFSA) is now available. For incoming freshmen, transfer students, and continuing students, filling out the FAFSA is pertinent for affording college. Summer is in full swing, but there are still important preparations to be made for incoming college students. With fall just a few months away, accessing financial aid is critical for many college students.

There are two different types of financial aid: federal and state aid. Within these forms of financial aid, there are three types of federally granted financial aid. There are grants, loans, and work­s-tudy programs that are set up by the government to help students pay for college.

Grants are the most desired form of financial aid because they are federally granted money that does not have to be paid back. Pell Grants are one of the most popular grants for low­-income students. However, there are different types of grants that students receive that are based on financial need and household income. Information about grants can be accessed at StudentAid.gov.

On the other hand, loans are “borrowed money” that must be paid back with interest after the student graduates. Federal student loans do have some leeway when paying them back, such as student loan debt forgiveness and income­-based repayment plans. Public Service Loan Forgiveness (PSLF) is a program that forgives the remaining balance due for federal student loans to public service workers after 10 years of employment in the public sector. This includes librarians, police officers, government workers, and non-­profit employees. Whether or not a borrower is eligible for the PSLF, income­-based repayment plans are available for graduates who have borrowed federal student loans. These programs set up monthly payments based on a borrower’s income, typically capped at 10% of discretionary income.

Work-­study programs are available at most colleges for students to get work experience on­ campus while paying for college. Work­-study programs limit the number of hours per week that the student must work in order to balance their school schedule with work. These are typically part­-time, minimum wage jobs spread out on campus.

Every year, the federal government distributes over $150 billion among grants, loans, and work­-study programs to over 13 million college students. To be eligible to receive financial aid, the student must fill out the FAFSA. If the student is a dependent on their parents’ taxes, they must fill out their FAFSA under their parents’ income.

The faster you fill out the FAFSA, the sooner you can plan ahead for how much money must be paid out of pocket. The deadline to fill out the FAFSA is June 30, 2017. However, it may take quite some time to process this application, so fill it out as soon as you can!