Federal Student Aid

The federal government offers several Financial Student Aid Programs. These programs offer you extremely low interest loans and grants (free money). Unlike the GI Bill, these programs are paid through the school; however, like the GI Bill, Federal Student Aid is designed to assist you in meeting the cost of tuition, books, fees, and living expenses while you go to school. That means that once the school has taken its share, the remaining loan or grant balance goes to you.

Financial Student Aid Eligibility

You are eligible for FSA if you are all of the following:

• A high school graduate, or have a General Education Development (GED) certificate;
• Working toward a degree or certificate;
• Enrolled in an eligible school or program;
• A U.S. citizen or eligible non-citizen (must have a valid Social Security Number);
• Registered with the Selective Service if required (you can use the paper or electronic FAFSA to register)

Military Servicemembers Are Eligible

It doesn't matter whether you are active duty, reserve, veteran, retiree, on MGIB, or not -- you should be taking advantage of these programs. There are numerous examples of even senior active duty members receiving federal loans and large grants. Remember: Grants are gifts that you don't repay!

For Example: In 2002-2003 an active duty E-7 with three dependents received Direct Loans for the maximum amount, and PELL grants for $1500 each year.

Note: Recent Legislation has made some significant changes to the Federal Student Aid program. Check out the Higher Education Reconciliation Act to learn more.

Applying for FSA

Once you have enrolled in college, you need to start the application process. You can apply for all of the available FSA by filling out the FAFSA form online. Once you have submitted the Free Application for Federal Student Aid (FAFSA), your school will notify you which types of loans, grants and the total amounts you are qualified to receive. When you get this notification from the school, simply select to loans and grants you want and the school will finish the loan process.

Tip: Applying for FSA is easy if you use the FAFSA Pre-Application Worksheet to guide you. Without the worksheet the FAFSA process can be complicated. You will need to gather your tax forms from previous years, including W-2s, bank statements and investment statements to complete the form.

Money Saving Tip: FAFSA is a Free Application for Federal Student Aid; however there are some websites that offer to complete the FAFSA for you, for around $50. The FAFSA form only takes a relatively short time to complete. It is worth your time to complete it yourself. Click here for more information on the FAFSA process.

Every accredited school that is recognized by the Education Department will be eligible for some form of FSA. But the search for the right school and program can be time-consuming. Let Military.com help you, you can get free information on schools that fit your needs by filling out one simple form to find the "Military Friendly" schools that are eager to send you free information on how to get the funding you need to cover your education goals.

Available Loans and Grants

The following Table gives you a quick breakdown on the types of loans and grants, applications, interest rates and monetary limits:

Loans

FSA Loans are Financial Aid that is either funded or backed by the federal government, and paid directly through the school. Each type of loan has different fees (a percentage charged up front), interest rates and payment deferment plans.

Direct (Stafford) Loans

There are two different types of Direct Loans, Unsubsidized and Subsidized. These loans are identical in most ways, except how and when you begin to be charged interest.

*Unsubsidized - With the Unsubsidized Stafford loan, the interest begins compounding as soon as your school receives the money. When considering which loans to accept, you need to know that the interest on an unsubsidized loan can really add up over four years. If you choose to take an unsubsidized Direct Loan, we recommend that you consider making monthly interest payments as you go.

**Subsidized - With the Subsidized Stafford loan, you are not charged interest until 6 months after you leave school. This can mean a huge savings, considering you may be in school for more than four years.

FFEL Loans

The only difference between the Stafford Loans and the FFEL is the source. Private banking institutions fund FFEL loans. FFEL is also available in unsubsidized and subsidized forms

Perkins Loans

Perkins loans are funded by participating schools and have a fixed interest rate of 5%. All of the billing and payment arrangements are made directly through the school's business office.

Grants

Grants are free money for school paid by the Federal Government through the school's business office. After your school bills are paid, the remaining balance goes to you.

PELL Grants

Depending on your financial need and tuition costs, you can receive up to $4000 each school year.

FSEOG Grants

These grants are reserved for the most needy candidates, and are paid in addition to PELL grants. Like the PELL, FSEO Grants are also limited to $4000 per school year.