Need Based Grants
The word “grant” is enough to make almost any student in the world smile. After all, a grant is a set amount of money that doesn’t require repayment. In the industry, we refer to this kind of financial aid as “free money.” It’s a bit like a gift, and often, students don’t need to do much more than demonstrate need in order to get started.
In the past, there were a number of different need-based grants available to students at the federal level, in addition to grants that were provided by states and private entities. The number of options has dwindled a bit as the economy has struggled, but there are still very good choices available for students in need of assistance.
As the name implies, need-based grants are awarded based on a student’s inability to cover the entire cost of attending college. Those who have the smallest ability to pay tend to get grants first, while those who have a slightly better financial picture might not be first in line for this kind of free money. Often times, students don’t even know certain grants exist, and they will simply receive the award if they qualify.
- The amount of money the student has, including investments
- The amount of money parents have, including investments
- The amount that parents are willing to contribute to a child’s education
- The amount of money the child has already been awarded in loans and grants
- The amount a child’s spouse has, if applicable
All FAFSA forms are processed by trained professionals, and if a student meets the eligibility requirements for specific grants, those funds are provided automatically, without any action required by the student in question. There are no additional forms to sign or paperwork to fill out. The requirements for obtaining a grant can vary tremendously, however, depending on the year in question and the other people who are applying for grants.
Among all of the need-based grants available, Pell Grants are the most commonly recognizable. These grants are handed out on the federal level, determined by information students and parents provide when filing the FAFSA, and any institution that accepts federal loans for students accepts the payments that a Pell Grant can provide. There are a few specific requirements involving Pell Grants, however, and it pays to understand them.
Pell Grants, according to the U.S. Department of Education, are designed to assist undergraduate students who demonstrate significant financial need.
The amount of a Pell Grant can vary from year to year, but it’s typical for the awarded amount to be measured in the thousands. It’s certainly not enough money to help a student pay for a full educational experience, so students with Pell Grants may need other types of loans or grants in order to make ends meet, but these grants can help students to cover at least some of their expenses. In some schools, the grants might even cover the cost of one term or semester.
Federal Supplemental Educational Opportunity Grant (FSEOG)
While a Pell Grant is common, it’s not the only option available to students in need. In fact, the FSEOG might be another choice for students with exceptional financial needs that can’t be fully helped with the funds available in a Pell Grant.
Unlike a Pell Grant, which is disbursed by the federal government, a FSEOG is administered by the school the student attends, and not all schools participate in this particular grant program. Those that do receive a specific amount of grant money from the federal government at the beginning of the school year, and the administrators of that school parse student FAFSA applications in order to award funds to students in need. Those who qualify for FSEOGs also must qualify for Pell Grants, meaning that students who get these FSEOGs are getting two different grants to help pay for school.
The FSEOG award amounts can be low, the U.S. Department of Education reports, as some grants total only $100 per year. But for those students with significant financial need, these grants provide a way to fund an education without the hefty repayment programs a loan demands. Even a small amount of money can make a big difference to a student in need.
While federal grants can help students to pay for their educations, they’re not the only form of free money available to help students in dire financial straits. In fact, private institutions sometimes provide need-based grants to students who might not even qualify for federal assistance. For example, in an article in CNN Money, the author suggests that Yale provides need-based grants to families that earn $225,000 or more each year. That’s remarkable, as many families making this kind of money wouldn’t be considered financially needy by federal standards.
Private schools are willing to provide these sorts of grants in order to ensure that their student bodies are diverse, containing students from a variety of different educational and cultural backgrounds. Grants tend to level the playing field, allowing lower-income students to attend wonderful institutions alongside students who may be able to afford the tuition easily. Most school grants are advertised before a student enrolls. The grants can work a little like sales tools, allowing admissions counselors to outline why students should choose their school over another one that might be available. It’s not unheard of, however, for existing students to apply for need-based grants at their schools when their financial picture changes during their education process.
Grants are a well-known way to help low-income students perform a little better in school. For example, in a study conducted by The National Bureau of Economic Research, experts found that low-income students given grants tended to have better attendance scores than students who didn’t have grants. In addition, a grant also increased the likelihood that a student would complete a degree within six years. It’s possible that grants make students more motivated to succeed, but it’s also possible that students with grants don’t have to work, so they’re more likely to go to class and complete their course of education.
Since grants are so effective, states and even counties sometimes provide them to students in need. The amount of money available can vary dramatically, as can the eligibility requirements involved, but much of this information is readily available in the financial aid offices of the school that the student attends. Again, applying might be as easy as filling out a FAFSA and waiting for results, but students should also know about the grants available to them, so they can understand their options fully and fight for the grant money that might be headed their direction.
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