Financial Aid for Students

(This article appeared in the January/February 2006 issue of The American Postal Worker magazine.)

Joyce B. Robinson, Research & Education Department Director

As the cost of college continues to escalate, many parents find that they do not have the funds or resources needed to assure that their children can pursue a higher education. They fail to take advantage of the numerous student aid programs available at the state and federal levels because they simply do not know what’s out there.

The best way to learn what’s available is to contact the financial aid offices of selected schools to learn about the types of aid offered, the procedures and deadlines, and how and when the student could receive the aid. Inquire about a school’s policy regarding satisfactory academic progress.

Federal Aid Programs

Most schools take part in student aid programs administered by the U.S. Department of Education. College financial aid offices can advise on the following:

• Pell Grants: Available only to undergraduate students, these do not have to be repaid.
   
• Stafford Loans: Available to both undergraduate and graduate students, these must be repaid. The interest rate is variable, but never exceeds 8.25 percent. The government will pay the interest on loans while the students are in school, as well as during grace periods and deferment periods for students whose family incomes qualify them for subsidized Stafford Loans. Students receiving unsubsidized Stafford loans are responsible for paying all of the interest that accrues.
   
• PLUS Loans are unsubsidized loans made with a variable interest rate that never exceeds 9 percent.

Campus-Based Programs

There are three federally-funded campus-based programs, which are administered by the schools themselves:

• Supplemental Educational Opportunity Grants are available for undergraduates only; awards range from $100 to $4,000.
   
• Federal Work Study programs provide jobs to undergraduate and graduate students, allowing them to earn money to pay expenses while pursuing their education.
   
• Perkins Loans are low-interest (5 percent) loans that must be repaid; the maximum annual loan amount is $4,000 for undergraduate students and $6,000 for graduate students.

Applying for Aid

Although the deadline is midnight (Central Time), June 30, 2006 , parents are advised to fill out the Free Application for Federal Student Aid (FAFSA) as soon as possible, and before pursuing any of the aid described above.

It takes approximately seven days to process the FAFSA form and to send a Student Aid Report summarizing the assessment of the application. Check this information carefully to make sure it is accurate; keep a copy and note the Data Release Number in the bottom left-hand corner of the first page. This number is needed to apply to additional schools. Make sure that your Expected Family Contribution is printed in the upper-right hand corner of the report. The amount is based on the financial information provided on the FAFSA.

For help completing the FAFSA application, visit the Department of Education Web site at www.fafsa.ed.gov.

For additional information, contact the Federal Student Aid Information Center at 800-433-3243, or your local library’s reference section; for the AFL-CIO guide to applying for student aid, call 877-881-1022.