Similarly, many states offer grants to students with financial need or special circumstances. Consult your state’s higher education department for details. In some places, students are automatically eligible for grants on the basis of their FAFSA submission, while other states require that a separate application be filed.
Federal Pell Grant
Pell Grants are given to undergraduate students based on financial need;
they are not required to be paid back. The funds are often the foundation of
federal aid for the neediest students, with additional aid coming in the form of
subsidized or unsubsidized loans, work-study programs, and other assistance.
In certain circumstances, Pell Grants can also be disbursed for students
enrolled in a postgraduate teacher certification program.
Students do not directly apply for a Pell Grant; they are issued by
colleges on the basis of the data extracted from the FAFSA and the Expected
Family Contribution and funded from the pool of money they receive from
the federal government. Each school is supposed to receive sufficient Pell
Grant money for all students who qualify.
Colleges can credit Pell funds to a student’s tuition and room-and-board
bill, pay the student directly, or split the money between the outstanding
bill and a check. For the 2005–06 academic year, the maximum Pell Grant
amount was $4,050; the amount can be reduced by the college if it uses an
institutional methodology that spreads available funding to a wider pool
of financial aid applicants. Part-time students will receive a proportionally
smaller payment.
The program is named after former U.S. Senator Claiborne Pell of
Rhode Island, who championed its cause in Congress.
Federal Supplemental Educational
Opportunity Grant (FSEOG)
This supplemental grant is aimed at students with exceptional financial
need and is usually added to Federal Pell Grants. As a grant, it does not need
to be paid back.
FSEOG funds range from as little as $100 to as much as $4,000 per
academic year. Colleges are not guaranteed full funding for all eligible students,
and applicants cannot count on receiving the maximum amount.
As with Pell Grants, FSEOGs are awarded on the basis of information
provided on the FAFSA; there is no separate application. Funds can be
credited by the school to student accounts, paid directly to the student, or
split between direct payment and credit.
Federal Work-Study
This program provides jobs for undergraduate and graduate students
with financial need. Funds are paid directly to the student in most cases,
although some colleges will allow earnings to be directly credited to tuition
and room-and-board bills.
Participants are guaranteed to be paid at least the current minimum
wage. Jobs are usually on campus, although some may be at public agencies
or private nonprofit organizations. The financial aid offer from the college
will indicate the total amount of available funds per semester.
Students are offered work-study on the basis of information provided
in the FAFSA; there is no requirement to accept the job or to work the full
number of hours that are funded.
Bureau of Indian Affairs Higher ED Grants
Students who are members of an American Indian tribe or at least onequarter
blood descendants of a member of a tribe may be eligible for special
grants administered by the Office of Indian Education Programs of the Bureau
of Indian Affairs (BIA). The need-based grants can be used toward attendance
at an accredited institution granting an associate’s or bachelor’s degree.
The agency’s Higher ED grants supplement other federal financial aid
programs. The grant application is available from the education office of many
individual tribes; if the tribe is not administering the program, applicants
can make direct contact with the BIA. Applicants must also file the FAFSA
form, and they should make the financial aid office of the colleges they are
applying to aware of their request for a supplemental Higher ED grant.
For more information, consult tribal offices, financial aid offices, or the
Office of Indian Education Programs at (202) 208-6123 or www.oiep.bia.edu.
TAKING A CLOSE LOOK AT THE NUMBERS
When colleges offer a package that includes scholarships, you should figure
out the real value of every offer. Start by figuring the true cost for each college.
Use the formulas in Chapter 4 to calculate The True Cost of College and
then subtract scholarships and grants for the current year to yield The True
Bottom Line This Year.
Do not include loans, and also exclude work-study income unless your student
is committed to apply that money to the cost of living and travel expenses.
Now comes the interesting part. Let’s say we are comparing two schools
that have greatly varying list prices but also offer significantly different amounts
of financial aid and grants. Here are some of the things you may find:
• A school that has a high list price may end up a less expensive
option if it makes a particularly generous offer of financial aid in
the form of grants.
• A school that has a lower list price may be more expensive if it
is so far away that parents and the student will have to spend
thousands of dollars on travel to and from school.
Consider this hypothetical but realistic scenario:
SCHOOL A:
True Cost of College $24,500
Federal financial aid –$6,000
Discounted Bottom Line = $18,500
SCHOOL B:
True Cost of College $34,000
Federal financial aid –$6,000
Academic grant in aid –$10,000
Discounted Bottom Line = $18,000
In this example, the school with the higher list price is offering a
significant discount in the form of an academic grant, while the college that
begins with a lower list price is staying with that price. Here’s where you can
shift your focus from cost and put your concentration where it should be: on
the quality of the college education.
School B may be a superior school, and you may be getting a great deal
with the discount. Or it may merely be a more expensive school.
Read More: FEDERAL AND STATE GRANT PROGRAMS
