The federal government offers financial aid grant, loan, and work opportunity programs to assist students and their families in covering the cost of higher education. Eligibility for federal student aid is determined by the results of the Free Application for Federal Student Aid (FAFSA), which must be filed each academic year. In addition, eligible students must be enrolled in a degree program, maintain minimum standards of satisfactory academic progress and, for most federal programs, be enrolled at least half-time each semester.
Federal aid programs include:
Federal Pell Grant
For 2014-2015, awards range from $602 to $5730 per academic year. This program is designed to assist the neediest of undergraduate students earning their first baccalaureate or four-year professional degree.
Federal Carl D. Perkins Loan
The Perkins Loan carries a 5% interest rate. The loan is subsidized – which means that no interest accrues as long as the borrower is continuously enrolled at least half-time in a degree program. During a nine-month grace period after the student graduates, leaves school, or drops below half-time enrollment, no interest accrues and no payments are required. Awards range from $750 to $4,000. Perkins funds are reserved for students with exceptional financial need.
William D. Ford Federal Direct Stafford Loan
Depending on the results of the borrower's FAFSA, this loan may be subsidized (i.e. no interest accrues as long as the borrower is continuously enrolled at least half-time in a degree program), or unsubsidized (i.e. the borrower is responsible for the interest that accrues while he or she is enrolled in school). There are instances when the loan amount can be a combination of subsidized and unsubsidized. Repayment begins six months after the borrower graduates, leaves school, or drops below half-time enrollment. The fixed interest rate is currently 6.8%, on subsidized loans disbursed after July 1, 2013. As of July 1, 2008, Freshman may borrow $3,500; Sophomores $4,500; Juniors and Seniors $5,500. Students who need additional funds may be eligible to borrow unsubsidized funds in the amount of $2000 per academic year.