The big back-to-school grant provided by the federal government is the Pell grant. Since the Recovery Act, grants have been increased from a maximum of $4,310 to $5,500. Awards are based on financial need. Another needs-based program is through the WIA (Workforce Investment Act) which is usually available through local Departments of Labor. Student loans include direct loans from the federal government and private loans through outside lending institutions.
Grant
The Federal Pell Grant program provides funds which do not have to be repaid for low-income students in order to increase post secondary education. Students can apply their award to any of 6,000 participating educational institutions. The amount of the Pell grant is determined by a formula that includes the income of the applicant, the size of the household, whether the student is part or full-time, and the cost of attendance.
Apply for Grant
The first step in the quest for school funding is to fill out the Free Application for Federal Student Aid (FAFSA) online. In order to fill out the FAFSA, applicants need last year’s tax return information and the name of the school they wish to attend. FAFSA sends a report to the student and to the school with the amount of the award (if any) as well as recommendations for any other aid programs for which they are qualified. Schools may pay the money directly to the student or credit the student’s account.
WIA Grant: Tuition Assistance
The Workforce Investment Act (WIA) program adds to the Pell grants, but only for eligible low-income clients. Students must apply their through local Department of Labor/One Stop Career Centers. WIA exists to help individuals acquire the skills needed to obtain employment leading to self-sufficiency. Awards can range up to $9,000 for two years and can pay for such things as uniforms, child care and transportation.
College Scholarships
Scholarships resemble grants in that they do not have to be repaid. For information on scholarships, speak with the financial aid office at the school you wish to attend. Public libraries have books full of scholarship listings. Sometimes employers or organizations to which a student or their parents belong offer scholarships. stock guidebooks for scholarships as well. Employers and organizations you or your family is affiliated with may offer scholarships. According to College Board, scholarship information is free and you should not be required to pay for it.
College Loans
According to the U.S. Department of Education, direct federal loans come in two types: subsidized for low-income individuals and unsubsidized for others. In subsidized loans, no interest is charged while the student is in school or during grace periods. Interest is fixed at 4.5%. For unsubsidized loans, interest is charged from the time the loan is made and interest is fixed at 6.8% Private lenders also make student loans, but the interest rate fluctuates based on the borrower’s credit evaluation and other factors.
The Department of Education cautions students that loans have to be repaid with interest. They offer a loan calculator and an college expense calculator to assist students with their financing choices.
