The Necessary World of Financial Aid
By Kim Dudley
August 26, 2002
It’s that time of year again! The
fall semester is about to begin and fee bills are due.
Do you have the money to pay tuition for your college classes this fall?
Or maybe you have the money to pay for fall but not for spring?
Have you ever considered applying for federal financial aid?
The process is relatively painless and, best of all, free.
Check with your school to see about priority dates or deadlines that must
be met in order to get the money to the college or university in time to pay fee
bills.
The first step is to complete the Free Application for Federal Student Aid (FAFSA)
on-line at www.fafsa.ed.gov.
This will require you to provide information from your 2001 income tax
form. Also, if you are a dependent
student, you will be required to provide your parents’ 2001 income tax
information. What defines a
dependent student? According to the
federal government, until you can answer “Yes” to one of the following
questions, you are considered dependent and must provide parental income tax
information:
1)
Were you born before
January 1, 1979
?
2) Are you married?
3) Do you have any dependents who
receive more than half of their support from you?
4) Are you an orphan or ward of the
court?
5) Are you a veteran of the U.S. Armed Forces?
Again, answering yes to only one of these questions will allow you to put
only your income tax information on the FAFSA.
At the end of the online application, there is a place to put several school
codes. It is very simple to look up
multiple school codes online. Using
the code allows the school to electronically receive and begin processing your
information.
Be sure to print the signature page at the end of the application and mail it
in to the address provided. For
subsequent years, you will be provided a PIN number to use for your Renewal
applications so you will not have to mail any paperwork to the federal
processor.
Approximately two to three weeks after you have completed your application
online, you will receive a form called a Student Aid Report (SAR) from the
federal processor. Every year the
SAR will be a different color. For
the 2002-03 award year, the SAR is blue. Once
you have received this information in the mail, the schools have already
received your information electronically. At
this point, the school will be requesting information from you.
The information may be only a data form or, if the federal processor
selected your information for verification, the school may request copies of
your tax returns and other documents. Thirty
percent of all applications submitted are selected for verification.
The school will not be able to continue to process your information until
their office has received all requested forms from you.
Once the forms are turned in and the school processes them, you will be
sent an award letter that will tell you exactly the programs for which you are
qualified.
I.
Grant Programs
The funds from these programs do not have to be repaid and are awarded based
on income.
1. Federal
Pell Grant - available to undergraduates working toward first degrees; can
range in value from $400 an academic year to maximum of $4,000.
2. Federal
Supplemental Education
Opportunity
Grant (SEOG) - available to
undergraduates with exceptional financial need who are enrolled at least
half-time; award amounts vary from school to school.
II.
Loan Programs
The funds from these programs are low interest loans that have deferred repayment as long as the student is enrolled at least
half-time.
1.
Federal Perkins Loan (5%
interest) - available to both undergraduate (awarded
based on financial need if you are at the junior level or higher) and
graduate/professional school students who are enrolled at least half-time; award
amounts vary from school to school; loans are made by the school and repaid to
the school.
2.
Federal Stafford Loans
(variable interest capped at 8.25%) - available to both undergraduate and
graduate/professional school students who are enrolled at least half time;
maximum amounts that can be borrowed are $2,625 for the first year (Freshmen), $3,500 for second year undergraduates (Sophomore),
$5,500 per year for subsequent undergraduate study (Juniors/Seniors
& continuing Students), and $8,500 per year for graduates and
professional school students; loans are made through a participating lender.
Currently, the interest rate for these loan programs is the lowest it has been
in the history of the federal loan programs.
The interest rate effective
July 1, 2002
thru
June 30, 2003
is 3.46%.
III.
Federal Work-Study Programs:
Guaranteed jobs for students who show financial need and wish to earn part
of their educational expenses; students are paid based upon the number of hours
actually worked and at pay rates that start at minimum wage.
Additional Programs (not based on
need)
I.
Unsubsidized Federal
Stafford
Loan - same terms and conditions of
Federal Stafford loans except that a borrower is responsible for interest that
accrues while in school. Annual
limits may be increased in some circumstances for independent students.
II. Federal
Parent Loans (PLUS) (variable interest capped at 9%) - allows parents to
borrow up to the cost of attendance per year from participating lenders;
repayment begins on the day the loan is disbursed with the first installment due
to the lender within 60 days of that date. The
interest rate effective
July 1, 2002
thru
June 30, 2003
is 4.86%.
So if you need financial aid to pay for your higher
education, it is available. Just get
busy filing the necessary forms. Don’t
forget, however, that all loans must eventually be repaid, so be careful not
to overload yourself with debts that will come due once you get that dream job
after graduation.
ninetyandnine.com
© 2002, Kim Dudley
---------
Kim Dudley lives in
Denham Springs
,
Louisiana
. She is Associate Director of
Financial Aid at
Louisiana
State
University
in
Baton Rouge
, but her most important job will begin in December 2002, when she expects to
become a first-time mom. | 
