Is the financial aid game worth playing? There’s a tremendous amount of paperwork involved. The rules are obscure and often don’t seem to make sense. And it takes time.
But make no mistake, the game is definitely worth playing. Financial aid can be a valuable source of funds to help finance your child’s college education.
And you don’t necessarily have to be “poor” to qualify. In some circumstances, families with incomes of $75,000 or more can qualify.
The federal government provides student aid through a variety of programs. The most prominent of these are Pell Grants and Federal Supplemental Educational Opportunity Grants (FSEOGs).
Pell Grants are administered by the U.S. government. They are awarded on the basis of college costs and a financial aid eligibility index. The eligibility index takes into account factors such as family income and assets, family size, and the number of college students in the family.
By law, Pell Grants can provide up to $5,775 per student for the 2015-2016 award year.1 However, only about 27 percent of recipients currently qualify for the maximum. The average grant was $3,673 in 2014-2015.2 Students must reapply every year to receive aid.
Most colleges will not process applications for Stafford loans until needy students have applied for Pell Grants. Students with Pell Grants also receive priority consideration for FSEOGs.
Students who can demonstrate severe financial need may also receive a Federal Supplemental Educational Opportunity Grant. FSEOGs award up to $4,000 per year per student.
Many states offer grant programs as well. Each state’s grant program is different, but they do tend to award grants exclusively to state residents who are planning to attend an in-state school. Many give special preference to students planning to attend a state school.
Finally, many colleges and universities offer specialized grant programs. This is particularly true of older schools with many alumni and large endowments. These grants are usually based on need or scholastic ability. Consult the college or university’s financial aid office for full details.
1) U.S. Department of Education, 2015; 2) The College Board, 2015