Financial aid and loan programs

The federal government administers several major financial assistance programs. Some are direct assistance programs; that is, the assistance goes directly to the student. The other programs are administered through the college that the student attends; that is, funds are sent directly to the college, which in turn dispenses the money to the student in accordance with federal guidelines.

Below is a listing of some of these opportunities. To find out more, go to the Federal Student Aid website:

Pell Grant

A Pell Grant is based solely on financial need. The amount of the award is based on student need (within certain limits) and on how much money Congress appropriates to the program each year. Since many college and state aid programs require students to apply for a Pell Grant, it's important to apply for one even if you think you won't qualify. Just check the proper box on the financial aid application.

Stafford Student Loan

This is a federally subsidized loan program that allows the student to borrow from private lenders and the government at lower interest rates. Families with high incomes are eligible for the program if certain needs tests are satisfied. The loan is insured either by the federal government or a state agency. Repayment of principal and interest is deferred until six months after a student graduates or leaves school, and standard repayment is made over a 10- to 30-year period depending upon the amount owed.


This is available to parents of dependent undergraduate students, and to graduate or professional students who reach their Stafford Loan limits. Repayment of a PLUS loan begins 60 days after parents receive the money, and lenders typically establish a repayment period of 10 to 25 years. Graduate students may defer payment while in school at least half-time.

Supplemental Education Opportunity Grant (SEOG)

This is a grant to a student with demonstrated financial need. The money is sent, however, by the federal government directly to the colleges, which determine the award amount and dispense the money to the students. The Department of Education allocates a specific amount of money to each participating college. Once distributed, there are no additional sums. Applications are made through the academic institution's office of financial aid. Early application is strongly recommended.

Perkins Loan

Colleges that also act as lenders administer this loan. Eligibility is based on the student’s calculated need. Although the interest rate is low, funds are limited and students should submit the financial aid application early. A student will pay no interest while still in school. There is a 9-month grace period after leaving college. Repayment is stretched out over 10 years.

Additionally, state governments also offer a variety of assistance programs. But most state assistance is available only to state residents attending schools within that state. Some states do make exceptions and permit state residents to attend out-of-state schools. A few states allow nonresidents to receive assistance while attending a school within the state, or they have reciprocity arrangements with other states. 

Many states have special programs for teachers and National Guard enlistees. Others offer work-study programs and special academic supplements. Check your state government’s website for more information.