Grants for Low-Income Families
Based on financial information an entering college student provides on the Free Application for Federal Student Aid (FAFSA), a college will create a financial aid package for the student. As college-aged students are most always dependents of their parent(s), it is usually the parental income and assets information that get reported on the FAFSA. This application relies in part on information reported to taxing authorities, so students and parents must make sure that the family’s most recent tax year filings are readily available.
No two financial aid packages may be the same, though they will likely draw from the following common sources:
- Federal government
- State government
- The college itself
- Private companies
- Banks and other lenders
Most schools do not guarantee that they will offer a financial aid package that amounts to a full award. According to U.S. News, of 1,137 schools surveyed, only 62 schools covered 100 percent of student financial need. Part of the reason is that schools believe (however right or wrong) that some parents can afford to pay for at least part of the student’s college expenses. Schools utilize the Expected Family Contribution (EFC), which is the amount the federal government estimates the student’s family can afford to contribute to tuition and other college expenses (such as books, and dorm and meal plan costs).
The unfortunate news, however, is that even though a school estimates a parental contribution, it does not mean that in reality the parent(s) can actually afford to make such a payment, nor that they are willing to do so. Under these circumstances, students may be able to borrow a private loan, or, in some cases, colleges have school-specific loans that can be borrowed under extraordinary circumstances of need. These loans usually have more favorable terms and interest rates than a private loan, but the total maximum allowable amount available to borrow may be low. The best advice for a student whose family cannot meet the Expected Family Contribution is to inquire directly with the school for more information.
In the case of parents who have low-income levels, there may be little or no Expected Family Contribution. Under these circumstances, schools will consider the admitted student for forms of financial aid for which financially needy students qualify. Such forms of aid include:
- Federal Pell Grant
- Federal Supplemental Education Opportunity Grants (FSEOG)
- Teacher Education Assistance for College and Higher Education (TEACH)
According to Federal Student Aid, the amount of a Pell Grant varies from year to year. For the 2015-2016 academic year (which runs from July 1, 2016 through June 30, 2017) the Pell Grant tops out at $5,815. The FSEOG grant is not as generous, but ranges between a low of $100 and a high of $4,000, depending on the student’s level of need, the amount of additional aid the student will receive, and other key factors. The TEACH, SMART, and academic grant are sensitive to intended course of study and academic achievement.
In addition, individual states may provide grants. For instance, New York State provides a Tuition Assistance Program (TAP) grant, which can amount to as much as $5,165. The TAP grant does not have to be repaid. For qualifying students at California colleges, a Cal Grant may be available.