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Most students are unable to pursue a degree without the assistance of financial aid. Assistance comes in many forms and it pays to know your options.

FAFSA

The first step to obtaining financial aid for education is to complete the FAFSA (Free Application for Federal Student Aid). This is a form that can be filled out annually by current and anticipating college students (both undergraduate and graduate) in the United States to determine their eligibility for federal student financial aid. The Department of Education begins accepting the application beginning Jan. 1 of each year. Renewal FAFSA's are completed by those who have filled out a FAFSA in previous years. You must complete a FAFSA to be eligible for Federal Aid - Pell grants, Stafford loans, PLUS loans, and work-study programs. Most states and schools use information from the FAFSA to award non-federal aid.

Many experts recommend that students apply for and get as much federal aid as they can. Federal aid is the foundation of most education funding solutions.

Federal Aid

Pell Grant

The Federal Pell Grant Program provides need-based grants to low-income undergraduate and certain post-baccalaureate students to promote access to postsecondary education. A grant, unlike a loan, does not have to be repaid. Students can use the grants at over 5000 participating postsecondary institutions. To qualify for a Pell Grant, a student must demonstrate financial need. The amount of the award is based on the Expected Family Contribution, derived from the information on the FAFSA and is capped at $5,350 for the '09-'10 school year. The National Postsecondary Student Aid Study found that during the '99-'00 school year, students from families making less than $41,000 accounted for 90% of Pell Grant recipients.

Stafford Loans

A Stafford Loan is a student loan offered to eligible students enrolled in accredited schools. Because the loans are guaranteed by the full faith of the US Government, they are offered at a lower interest rate than the borrower would otherwise be able to get for a private loan. There are strict eligibility requirements and borrowing limits on Stafford Loans. Stafford loans are available through financial institutions or directly from the government. This is a loan and must be repaid. In some cases no payments is expected on the loan while the student is enrolled as a full or half time student or for six months after the student leaves school either by graduating, dropping below half-time enrollment, or withdrawing.

PLUS loans

The parent loan for undergraduate students ("PLUS") enables parents to borrow to pay the costs of higher education for their dependent undergraduates and graduate students to pay their costs.

Federal Work Study Program ("FWS")

The FWS Program provides funds that are earned through part-time employment to assist students in financing the costs of their education. Students can receive FWS funds at over 3,000 participating schools. Institutional financial aid administrators at participating institutions have flexibility in determining the amount of FWS awards to provide to students who are enrolled or accepted for enrollment.

GI Bill

Under the Montgomery GI Bill, the Army, Navy, Air Force, Marine Corps and Coast Guard (and their Reserves and the National Guard) provide a cash education incentive to encourage you to join and serve a tour of duty. The GI Bill provides up to 36 months of education benefits to eligible veterans for college, business, technical or vocational courses, correspondence courses, apprenticeship/job training and flight training. GI Bill benefits may be used while on active duty or after an honorable discharge from active duty.

Scholarships

If you can qualify for Scholarships, they are a great way to help pay for your education. Unlike student loans, scholarships do not have to be repaid. Hundreds of thousands of scholarships worth over $1 billion are awarded annually.

Generally, scholarships are awarded to students with special qualifications, such as academic, athletic or artistic talent, interest in particular fields of study, who are members of underrepresented groups or demonstrate financial need.

MyFreeDegree is a great place to search for scholarships.

Employer Tuition Reimbursement

Although they are rare and the details vary widely, tuition reimbursement or tuition assistance is a great way to pay for your education. Generally this benefit is available at large companies like Motorola, Kraft, Bank of America and General Electric and is offered to meet recruiting, retention and professional development goals. The best programs cover 100% of up-front costs for tuition and related expenses like books. Many companies that offer this benefit don't aggressively encourage their employees to take advantage it so it pays to take the initiative.

Tuition assistance programs often require a significant commitment by the employee and limitations that may include:

• Enrollment in job related courses only
• Minimum grade requirements
Annual tuition caps
• Payback requirements if you leave the company

If you are fortunate to work for a company that offers a tuition assistance benefit, consider taking advantage of it. Approach your supervisor in a profession, thoughtful manner about how advancing your education benefits the company.

Private Loans

Private loans are offered by are non-Federal loans offered by financial institutions like a local bank. Students should consider private student loans only after they have exhausted efforts to obtain Federal loans or maxed out all the Federal loan options. Terms and interest rates on the Federal loans are almost always better than you can with a private loan. Additionally, with the advent of the credit crisis in late 2008, private loans are more difficult to quality for. The best terms and rates are now available only to those with the most creditworthy cosigner.

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