Campus-Based Financial Aid
Certain campus-based programs use federally-allocated funds to provide students at their school with low-cost loans, grants, or work-study opportunities. Others award scholarships and grants using the school’s own funds, including endowments and private contributions.
Federal Perkins Loan Program
The Federal Perkins Loan Program offers long-term, low-interest loans to students who can demonstrate financial need. The maximum that can be borrowed under this program is $5,500 per year for undergraduates and $8,000 per year for graduate students.
While the loan uses federal funds, your school is the lender, meaning you will repay the loan directly to the school. No repayment is required while the student is in college. Payment begins nine months after the student leaves school or enrollment status falls below half-time. Deferments of up to three years are possible if the borrower is engaged in certain activities as outlined by the federal government. No interest is charged during this time. During the 10-year repayment period, the interest rate is 5 percent. The loan may be paid off early without penalty.
Visit www.studentaid.ed.gov/repaying for information about repayment options, deferments, and loan forgiveness or cancellation programs.
Federal Supplemental Educational Opportunity Grants
The Federal Supplemental Educational Opportunity Grant program provides awards ranging from $100 to $4,000 per year for students who demonstrate exceptional financial need. Since these are grants, the student does not have to work for the money nor does the money have to be repaid.
The grants are renewable over four years, provided the student remains eligible. Funding is limited, so students should file the FAFSA as soon as possible.
Federal College Work-Study
Most colleges now participate in the federally sponsored College Work-Study Program. This program is designed to help students pay for their education by providing them with jobs while they are enrolled in college. Students usually work a limited number of hours per week while school is in session, thus ensuring that the job will not interfere with their academic program.
Students may work on campus in any capacity, including work in academic departments and administrative offices as well as library work, landscaping, and maintenance work. Off campus, Federal College Work-Study jobs are limited to nonprofit agencies such as high schools, community action groups, YWCA and YMCA. Maximum earnings are determined by the college, but the student is paid at least federal minimum wage. In addition to jobs during the school year, the program provides for summer employment of 40 hours per week for a duration of eight to ten weeks, enabling students to earn substantially more during the summer.
While the provisions of the program dictate that the neediest students must be given preference, any student who can demonstrate financial need is eligible to participate. Jobs are usually renewable for four years, provided the student meets the requirements of the program.
Some of the greatest sources of financial aid are the nation’s colleges and universities, which distribute money in the form of scholarships and grants. These awards are made directly to the student by the college and are outright “gifts,” which the student does not need to repay. While the amount of most awards is determined by a student’s financial need, there are usually other criteria that an applicant must meet. The most commonly used criterion is “academic potential” as measured by high school records and college entrance tests (e.g. SAT or ACT tests).
In recent years, more colleges are offering “academic merit scholarships,” which are based completely on a student’s academic record without regard for the financial circumstances of the family. Students who cannot demonstrate financial need but have proven themselves to be strong academically should inquire about such awards at all colleges in which they have an interest.
As the availability of financial aid varies from college to college, families should be sure to ask about the percentage of students at each college who are receiving aid, as well as the amount of the average aid package. High numbers in these two categories usually indicate that a student will have a better chance of getting adequate financial aid.
The more selective the college, the higher the applicant’s grades and scores must be to get a merit scholarship. Thus, at a very selective college, a student might need to rank in the top 5 percent of the class while at another, less selective college, merit scholarships might go to students who rank in the top 30 percent. The key to merit scholarships is matching the student’s credentials to the requirements at specific colleges.
Other scholarships, often called activity awards, may be given to applicants who are active in such things as debate, band, dramatics, newspaper or yearbook, or athletics.
College-awarded scholarships oftentimes will cover tuition or more, and are renewable for four years, provided that the student meets the stated requirements of the award.