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Financial Aid 201: Grant Programs
A college education is a smart investment in a secure financial future. And while the increasing tuition costs can be scary, it’s nice to know that there are a variety of financial aid options that can help offset some of the costs.
Financial aid comes in three forms: grants, loans and work-study. More than $105 billion in total financial aid is available. And almost half of all college students receive some sort of grant aid.1
What is a grant?
Grants are monetary gifts that you don’t need to repay. You can receive grants from federal and state governments, school financial aid offices, and private and professional organizations. Of course, not everyone is eligible for a grant. Many factors, such as income, are considered to determine if you qualify for a grant and how much you are able to receive.
Federal grants are based on financial need and are available in two forms:
Pell Grant
The largest program for federally funded need-based aid awarded to
lower and lower-middle income undergraduate students who have not earned
a bachelor’s or professional degree. The U.S. Department of Education
guarantees that the participating schools will get enough money to pay
the Pell Grants of their eligible students.
The maximum Pell Grant today covers 25 percent of the fixed costs at a public four-year college and just under 10 percent at a private four-year college.1
Supplemental Educational Opportunity Grant (SEOG)
This supplemental grant is also a gift for undergraduate students from
lower and lower-middle income families. Students who receive Pell Grants
are given priority in receiving a SEOG. However, because the number of
students receiving SEOG depends on the availability of funds at each
school, there is no guarantee that every student eligible for a SEOG will
be awarded one.
How do I get a grant?
To apply for a government or college grant, you need to complete a Free Application for Federal Student Aid (FAFSA) form. Pick up an application at any high school or complete the form online.
Most financial aid packages are a combination of grants/scholarships, loans and work study. When grants are included as part of the package, it’s a good idea to ask the following questions.
- What do I have to do to keep my scholarship?
- Is there a minimum grade point average or other condition?
- If I win a scholarship from an outside source, what happens to my aid?
- Can my aid be increased if my family has financial problems?
- Do I have to do anything more than maintain satisfactory academic progress?
And don’t hesitate to ask about institutional grants, which vary from college to college. Who knows? Perhaps your investment in a college education won't be as expensive as you thought.
1 Adapted from the article "Your Financial Aid Award Explained: Rules of the Road." © 2006 collegeboard.com. Reprinted with permission. Visit collegeboard.com
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