What are some resources students may use to help pay for college?
Financial aid helps students and their families pay for college by covering higher education expenses, such as tuition and fees, room and board, books and supplies, and transportation. There are several types of financial aid; these include grants, scholarships, work-study, and federal or private loans
How Do I Apply for Financial Aid?
The first step is to file the Free Application for Federal Student Aid, known as the FAFSA. This is the application for federal student aid. This application is used by state agencies and colleges and universities to determine a student's eligibility for aid.
Families can begin filling out the form as early as Oct. 1 for the following academic year. The deadline for the FAFSA is June 30.
What are the different types of financial aid?
There are two types of aid: need-based and merit-based.
1. Federal need-based aid is determined by a family's demonstrated ability to pay for college as calculated by the FAFSA.
2. Merit aid (scholarships), on the other hand, can be awarded by the university or private organization to a student for a specific talent or an athletic or academic ability. These awards aren't based on financial need.
At UTEP, 73% of all students qualify for some type of federal student aid. For federal financial aid, there are three types of funds: loans, grants and work-study.
Federal student loans are fixed-interest-rate loans from the government. The interest rate for each academic year is set on July 1, and that rate is secured for the life of the loan. The main program for student loans is the Direct Loan program. Under the program, undergraduate students can borrow direct subsidized or unsubsidized loans up to $31,000 in total if they're a dependent. Students classified as independent can borrow up to $57,000 in total. Subsidized loans do not begin to accrue interest until after the borrower has graduated. Unsubsidized loans, on the other hand, begin to accrue interest as soon as the loan is taken out.
Federal grants are need-based awards that don't need to be repaid. The most well-known higher education grant for college is the Pell Grant. Eligibility for a Pell is based on a family's expected family contribution, or EFC, and is calculated on the FAFSA. Most families who earn less than $60,000 for their household income qualify for some amount of Pell. The maximum Pell for the 2018-2019 school year is $6,095. A family with $0 as an EFC, for example, will qualify for the full Pell.
Work-study is a program that provides part-time work, typically on campus, to help students cover college-related expenses. Not all students qualify for federal work-study. Students need to qualify through the FAFSA with demonstrated financial need. Under work-study, students earn at least $7.25 an hour, the federal minimum wage. The average award amount to a student participating in the program is slightly more than $2,300 per year, according to Sallie Mae's How America Pays For College report.
While the FAFSA should be on a student's radar to qualify for need-based aid for both federal and state funds, a college-bound student can go a step further and maximize aid with merit-based potential (scholarships). Merit-based aid is one way to close the gap between the cost of attendance and need-based financial aid.