Financial Aid
Financial aid or student financial aid is meant to facilitate deserving students in getting education. The purpose of providing students with student aid is to enable them to pay for their educational expenses. The aid money can be used to pay tuition/fees, books, boarding or living expenses and other educational supplies. The education aid for students is given to students at all levels such as school, college and university. Government funding for public education is different from financial aid. There are two criteria on which the education financial aid is given: Merit-based and need-based.
Merit-Based
Merit based scholarships can be given by further two sources: the college or university in which the student is studying and other organizations like NGOs and government organizations etc. In some universities the students are considered as candidates of merit scholarships when they enroll into the college or the university however, there are other colleges and universities which require the student to separately apply for a merit scholarship through applications designed for this particular purpose. The financial need of the students is not under consideration or is not the criteria for these scholarships. These scholarships are awarded on the basis of excellence in performance. This performance can be in studies, sports, or some special talents like music, drama or leadership qualities etc.
Need-Based
Need based education aid is given out to students on the basis of financial need. The financial aid application on the basis of need will only be applicable if you prove that you are not in a position to afford your studies. The eligibility of a person for a need based aid is determined by the Free Application for Federal Student Aid (FAFSA). Private institutions may function differently when it comes to need based educational aid.
Apart from federal student aid another source of aid is through private lenders who want to aid education and NGOs who work to spread education and provide more opportunities to students. The department of education is said to provide 60 percent of all financial aid in the country. The mission of this aid is to promote postsecondary education among students and create awareness among parents and students that if the child is interest in studying and you can not afford that it is not the end of the world. It is very important to understand when you apply for financial aid that it does not have to be in the form of money necessarily. Federal aid for students is available in three forms: Grants, loans and work study.
Grants
Grants are a form of aid in which you do not have to pay the money back. There are several grand programs that provide financial aid for school and financial aid for college. The money given as the grant will depend on the financial need of the student and also the time of his application. Most of the programs lend money on first come first basis if financial need is proved. The eligible students can receive from $100 to $4000 annually. The funding that the institution at which you are studying will also make a difference along with the policies of the aid office of your institution. Pell Grants and Federal Supplemental Educational Opportunity Grants (FSEOG) are two grants that contribute to promoting education. In the case of FSEOG if you are proven eligible then the school at which you are studying will pay the school financial aid to you directly. Another method could be that they credit your account or a combination of the two payment methods could also be used. If the school is following the term system then they must pay the student at least once in each term otherwise in the absence of term system twice annually.
Work Study
For work study aid method the federal work study (FWS) would provide students with part time jobs. Both undergraduate and graduate students are eligible for work study based on financial need. This program enables a student to earn so that he can support his own educational expenses. Two lines of work that are encouraged in this program are community service and jobs that are related to the field of work of the student. The students associated with this program are paid according to the minimum wage rate and their wages can not go below that rate however, they can be above depending on the type of work that they are performing and their skills. Students are not paid on the basis of fee or commission and the criterion of paying is by the hour. The amount that the student earns should be within the award limit. Work hours are assigned to student keeping under consideration their study commitments and the award amount etc. College financial aid through work study is still better then a loan as the student does not has to pay anything back. The jobs that will be assigned to will be in public interest if student works off campus so either it will b with a public organization of with an NGO. On campus you can work in your own school.
Loans
The third method of college aid is loans. There are several loan programs designed to accommodate students who need financial aid. Federal Perkins Loan is one such loan that is offered at a very low interest rate and has to be paid back. The pay back period is different for different students depending on the time for which they attend school. As funding levels are different for different schools your loan amount will depend on how much funding your school is getting, the time at which you apply for the loan and the level of financial need. Generally an undergraduate student can be loaned up to $4000 annually and the maximum amount of loan for an undergraduate would be $20,000. The loan will be paid back at an interest rate of only 5 percent and no additional fee is charged on this loan. The student will be paid the loan amount by the school’s financial aid office and as the school is the lender the money will be paid back to the school as well. If the student misses a payment or defaults on the loan then he may have to pay extra late charges and the collection costs.
