The Department of Education is the largest provider of financial aid in the US, a position it rose to as a result of a federal initiative to make college more affordable for students. Each year, $80 billion dollars in Department of Education financial aid is disbursed to students in the form of grants, funding for work-study programs, and Department of Education Student Loans. That $80b figure makes the Department of Education Financial Aid program the largest provider of student aid in the country.
Types of Department of Education Financial Aid
The Department of Education Financial Aid program offers a variety of financial aid resources, including grants, work-study programs, and federal student loans. Federal grants are a very desirable form of Department of Education Financial aid, as they are 'free money' awards, meaning they do not need to be repaid. After grants, federal student loans are a very strong form of Department of Education financial aid, as they have lower interest rates than nearly all private student loans, and have very favorable repayment terms. Federal loans offer fixed interest rates, and on many federal student loans, repayment does not begin until six months after graduation or when the student drops below full-time status in school. Additionally, some student loans, such as Stafford or Perkins Loans, can be subsidized; meaning the federal government pays any interest accrued on the loan while the student is enrolled. Receiving some form of Department of Education financial aid can ease the financial pressure while the student is in school, and can do so while minimizing the cost of borrowing for college.
Changes in Department of Education Financial Aid and Student Loans
As a result of legislation passed by Congress and signed by President Obama in July of 2010, all federal loans are now disbursed directly through the Department of Education. This means that the funds for federal student loans as a form of Department of Education Financial Aid are no longer offered through third-party banks, but that the funds come directly from the Department of Education. Students may apply for Department of Education student loans using the FAFSA, which is available online. Remember, if you need money for college, look for scholarships and grants first, then pursue Department of Education student loans, and if you still need money, explore private student loan options as a final measure. To search, compare, and apply for private student loans, you can use our student loan comparison tool above.