Financial Aid for Students Overview

0012aFinancial aid is the money you receive from a variety of sources to cover the cost of your education. The good news is that, regardless of income, most people are eligible for some form of financial aid.

Types of financial aid: Find out about the types of financial aid that are available. Some you need to pay back but there is aid that does not require repayment.

Am I “dependent” or “independent”?: One of the more important questions about financial aid is whether you’re considered a dependent or independent student. Here are the criteria the federal government uses in making this decision.

Is a credit card right for me?: One of the first things you’ll see when you get to campus will be booths where credit card companies want you to apply for a credit card. Now, credit cards can be useful things, but you need to use them intelligently. Think about these things before using a credit card a lot.

The FAFSA and other financial aid applications: You have to apply for more financial aid, and the form most often used is the Free Application for Federal Student Aid, generally just called the FAFSA. It’s not only used to apply for federal aid; many state programs require it too.
Types of Financial Aid

Grants:
Awards based on need that do not need to be repaid. The main grant programs are the Federal Pell Grant (Pell), Federal Supplemental Educational Opportunity Grant (FSEOG), College Access Program (CAP) Grant, and Kentucky Tuition Grant (KTG). Pell and FSEOG are, as their names indicate, federal programs. CAP and KTG are state programs administered by KHEAA. Many schools also have grants available.

Grant programs
Scholarships:
Awards based on some kind of special achievement, either academic, athletic, or service. These are merit-based and do not need to be repaid. The Kentucky Educational Excellence Scholarship (KEES) is the major state scholarship. Many schools and local organizations also provide scholarships.

Scholarship programs
Scholarship scams: Student financial aid involves billions of dollars. And where there’s that much money, there are lots of people who will try to make money of unwary students and parents. Read this section so you don’t get taken in by scams.

Work-study:
Part-time employment that lets a student earn money toward a college education either on or off campus. This can be through the Federal Work-Study Program, the KHEAA Work-Study Program, or a college’s work-study program.

Work-study programs
Check with your school’s student employment office to see if they offer their own work-study program.

Student loans:
Money borrowed, either from a bank, the government, or a school. A student loan must be repaid. However, low interest rates are available, and repayment doesn’t start until you’ve either left school or graduated.

The major loan programs are Federal Perkins Loans, Federal Stafford Loans and Federal PLUS Loans (for parents). In addition, some schools have their own loan programs, and some lenders offer alternative, or private, loans, such as the Kentucky Advantage Loan from The Student Loan People.

Student loan programs
Glossary of technical terms: About two-thirds of all students who get a higher education will have to take out student loans, which means you need to know student loan terms. These definitions will help.

Managing your student loan: After you’ve finished your higher education, you have to pay back any student loans you received. If you don’t you can get into a lot of trouble. Here’s advice on how to keep out of trouble — or what to do if you’re already in trouble.

Tips for student loan borrowers: If you have to borrow student loans to pay for school, borrow wisely. These tips will help.
Conversion scholarships/loans:

Scholarships that require you to provide certain services for a period of time. If you don’t, you have to repay the money with interest. In Kentucky, these include the KHEAA Teacher Scholarship and the Osteopathic Medicine Scholarship.

Conversion scholarship/loan programs
Waivers:
Arrangements offered by some schools to eliminate certain costs for students who meet certain qualifications. These include waivers for dependents of deceased or disabled veterans, for foster children, and for senior citizens.

Waiver programs
Military benefits:
Financial assistance offered to individuals (or their dependents) who either were or are going to be in the U.S. Armed Forces.

Military benefit programs
Prepaid tuition:
A contract guaranteeing fully paid tuition for a fixed number of credit hours at a participating school. You have to pay a certain amount up front. Kentucky’s Affordable Prepaid Tuition (KAPT) is such a program. Kentucky also has a college-savings program, the Kentucky Education Savings Plan Trust (KESPT). KAPT and KESPT are administered by KHEAA.

Qualified state tuition programs
National service award:
An award received for education expenses in return for national or community service. AmeriCorps is such a program.