Funding Education Beyond High School
Funding Education
Beyond High School
The Guide to Federal Student Aid
2008–09
Useful Web Sites
Frequently Requested
Fr
Telephone Number
T
s
elephone Number
Student Aid on the Web
www.FederalStudentAid.ed.gov
Federal Student Aid
Click on Students, Parents and Counselors
Information Center (FSAIC)
At this Web site you can
1-800-4-FED-AID (1-800-433-3243)
• Find information on federal student fi nancial
TTY users can call 1-800-730-8913
aid and access sources of nonfederal aid.
Cal ers in locations without access to 1-800 numbers
• Use FAFSA4caster to get an early estimate of
may call 319-337-5665 (this is not a toll-free number).
your eligibility for federal student aid, and an
The FSAIC staff can answer your federal student
early start in the fi nancial aid process. When
aid questions and can give you all the
you’re ready to apply for aid, much of the
help you need—FREE—including:
information you enter in FAFSA4caster
will populate the FAFSA on the Web.
• information about federal student
aid programs,
• Apply online using FAFSA on the Web (the
online version of the Free Application
• help completing the FAFSA,
for Federal Student Aid or FAFSA).
• help in making corrections to your Student
• Obtain a Federal Student Aid PIN to sign your
Aid Report (SAR), which contains your
FAFSA on the Web.
application results,
• Look up the status of your federal student loan.
• information about the process of determining
fi nancial need and awarding aid, and
• Use “MyFSA” to create a personalized folder
to record your interests, career and college
• information about your federal student loans.
searches and any relevant personal information.
You can also use an automated response system at this number
Track your progress in the col ege planning
to fi nd out if your FAFSA application has been processed and
and application process. Store information in
to request a copy of your SAR. You can also write to the Federal
“MyFSA” to prepopulate fi elds on the
Student Aid Information Center:
FAFSA on the Web.
• Get information to help you decide on a career
Federal Student Aid Information Center
and locate schools offering majors in that fi eld.
P.O. Box 84
Then apply to various schools online without
Washington, DC 20044-0084
leaving the site.
Free Help Completing the FAFSA
Direct Loan borrower services
www.FederalStudentAid.ed.gov/completefafsa
1-800-848-0979 | TTY users can call 1-800-848-0983
The Wil iam D. Ford Federal Direct
Direct Consolidation Loan information
Loan Program (Direct Loan)
1-800-557-7392 | TTY users can call 1-800-557-7395
U.S. Department of Education as lender
www.ed.gov/offi ces/OSFAP/DirectLoan/index.html
Inspector General Hotline
To report student aid fraud (including identity theft),
Use this Web site to fi nd out more information on the Direct Loan
waste or abuse of U.S. Department of Education funds
Program, such as repayment options and interactive calculators.
1-800-MIS-USED (1-800-647-8733)
Direct Loan Servicing Online
E-mail: oig.hotline@ed.gov
www.dl.ed.gov
Web site: www.ed.gov/misused
Use this Web site to make online payments, view account balance,
change billing options, enroll in electronic services, and much more.
U.S. Department of Labor’s Occupational
Outlook Handbook (information on various
careers and their earning potential)
www.bls.gov/oco
If you paid for a copy of this FREE publication, please write
Federal Student Aid Information Center
to the following address and give us the name and address
P.O. Box 84
of the organization that charged you.
Washington, DC 20044-0084
Funding Education
e Guide to Federal Student Aid | 2008–09
Beyond High School
U.S. Department of Education Federal Student Aid
U.S. Department of Education
Margaret Spellings
Secretary
Federal Student Aid
Lawrence Warder
Acting Chief Operating Offi cer
Student Aid Awareness and Applicant Services
Jennifer Douglas
General Manager
November 2007
Th is guide is in the public domain. Authorization to reproduce
or order online at www.FSAPubs.org
it in whole or in part is granted. While permission to reprint
Th is guide is also available on the Federal Student Aid Web
this publication is not necessary, the citation should be: U.S.
site at www.FederalStudentAid.ed.gov
Department of Education, Federal Student Aid, Students
Channel, Funding Education Beyond High School: Th e Guide
On request, this publication is available in alternate formats,
to Federal Student Aid 2008–09, Washington, D.C., 2007
such as Brail e, large print, or CD. For more information, please
contact the Federal Student Aid Information Center at
To order copies of this guide, write to:
1-800-433-3243 (1-800-4-FED-AID). TTY users (for the
hearing-impaired) should call 1-800-730-8913.
U.S. Department of Education
P. O. Box 1398
Th is guide contains Web site addresses for information created
Jessup, MD 20794-1398
and maintained by outside organizations. Th is information is
provided for the reader’s convenience. Th e U.S. Department of
or fax your request to:
301
Education is not responsible for control ing or guaranteeing the
-470-1244
accuracy, relevance, timeliness or completeness of this outside
or e-mail your request to:
information. Further, the inclusion of information or Web site
orders@FSApubs.org
addresses does not refl ect the importance of the organization,
or call in your request toll-free:
nor is it intended to endorse any views expressed, or products
1-800-394-7084 or 1-877-433-7827 (1-877-4-ED-PUBS). If
or services off ered.
877 service is not yet available in your area, call 1-800-872-5327
All Web site addresses included in this publication were accurate
(1-800-USA-LEARN). Th ose who use a telecommunications
at press time.
device for the deaf (TDD) or a teletypewriter (TTY), should
call 1-800-437-0833.
Th e information in this guide was compiled in summer 2007. For any changes
to the federal student aid programs since then, visit www.FederalStudentAid.ed.gov
and click on “Students, Parents and Counselors.” Any new information will
appear in the “Announcements” section.
Mission of Federal Student Aid
Federal Student Aid, an offi ce of the U.S. Department of Education, plays
a central and essential role in the nation’s postsecondary education community.
Federal Student Aid’s core mission is to ensure that al
A postsecondary education gives you more opportunities.
eligible individuals benefi t from federal fi nancial assistance
Th ose who receive education credentials beyond a high
—grants, loans and work-study programs—for education
school diploma have more jobs to choose from and earn
beyond high school. The programs we administer
much more than those who do not pursue an education
comprise the nation’s largest source of student aid. During
beyond high school. For example, according to the U.S.
the 2007–08 school year alone, we provided approximately
Census Bureau, a person with a bachelor’s degree earns
$83 bil ion in new aid to nearly 10 mil ion postsecondary
almost double what someone with only a high school
students and their families. Our staff of 1,100 is based in
diploma earns.
10 cities in addition to our Washington headquarters.
Pursuing education beyond high school is an opportu-
You have many postsecondary education options from
nity you should not deny yourself simply because you
which to choose. But whether you decide to attend a four-
are not sure it’s for you. Many students don’t know what
year col ege or university, community col ege or technical
career path to follow. But exposure to different academic
school, the knowledge you gain will be of value to you for
subjects, people and points of view helps you decide what
the rest of your life, no matter where you go or what you do. career you would like to pursue. After high school, you
get to study what you are interested in and, when you
graduate, you will get paid for your knowledge.
So go for it, and let us help you make it happen.
The Guide iii
A Message to Our Readers
This guide,
Funding Education Beyond
High School: The Guide to Federal
Student Aid, will help you through
the process of applying for federal
financial aid.
The cost of education beyond high school continues
Chances are you know someone who took advantage of
to rise. At Federal Student Aid, we offer financial aid
one or more of our federal student assistance programs. It’s
programs that help millions of students manage the
very possible that you can make this happen for yourself or
cost of education each year.
a family member. The key: Start here, today, and go further.
Education is your most important first step
toward success.
Start with us. We’re here to help…
Education creates opportunities. No qualified student
at www.FederalStudentAid.ed.gov
should be denied an education because the cost is too
You’ll find lots of useful information at our Web
high. So, if you’re considering education beyond high
site. There you can find the online version of this
school and wondering how you will pay, this guide can
and other publications, apply for federal student
help. There’s money available—but you need to apply
aid online and have just about any question on
to be eligible.
federal student aid answered. This year, you’ll also
We tell you exactly how in this guide. In fact, the guide
find a brand new product—FAFSA4caster. We
will tell you most everything you need to know about
believe it’s important to notify students of their
federal student assistance programs—grants, loans,
aid eligibility early. FAFSA4caster helps prospective
work-study and more. It leads you step by step through
students and their parents to prepare financially
the process—including completing the required
for a postsecondary education by estimating their
application. So rest easy; the guide explains everything
federal student aid eligibility. See page 3 for more
in simple, direct terms.
information on FAFSA4caster.
Our office publishes many other print publications that
We’re Federal Student Aid—
you will find helpful (see page 41). All of them can be
ordered free at 1-800-4-FED-AID (1-800-433-3243)
your expert source of aid.
or go to www.FederalStudentAid.ed.gov/pubs. So
Our team at Federal Student Aid is committed to
take advantage of federal grant, work-study and loan
making sure that all eligible students can benefit
programs as well as aid available from your state and
from financial help for education beyond high school.
the school you plan to attend. These resources might
just give you the boost you need to make community
There may be a good deal more of this help on hand than col ege, university or trade school a reality. So get
you think. Last year alone, we provided nearly $83 billion started, we’re here to help as you go forward.
in the form of grants, work-study and low-interest loans.
About 10 million students benefited from this aid. Many
— The Federal Student Aid Team
of them could not have managed the rising cost of educa-
tion without our help.
U.S. Department of Education
The Guide v
What’s Inside the Guide
Mission of Federal Student Aid _________________________________ iii Reducing the Cost of Education __________________________________3
A Message to Our Readers __________________________________________ v Lower-cost schools __________________________________________________________3
State Higher Education Agency
Federal Student Aid
__________________________________________ 3
at a Glance
Work or volunteer opportunities ________________________________________4
Considering Education
Tax breaks _____________________________________________________________________4
Beyond High School
Hope or Lifetime Learning tax credit
___________________________________________________ x
___________________________________ 4
Federal Student Aid Summary Chart _______________________________ xi
Am I Eligible? ____________________________________________________________4
What is federal student aid? __________________________________________xii
Basic requirements __________________________________________________________4
How do I apply for federal student aid? __________________________xii
Financial need _______________________________________________________________4
Who gets federal student aid? ______________________________________xiii
Education requirements ___________________________________________________4
Process Summary Chart ________________________________________________xiii
Legal and other requirements
FAFSA4caster
____________________________________________ 4
______________________________________________________________ xiii
“Match” requirements ______________________________________________________5
A
Financial need and Expected Family
Contribution (EFC) _________________________________________________________5
I think I have some special circumstances in
What You Should Know
my family. Are these considered in determining
Before You Apply
my financial needs? _________________________________________________________5
Education After High School
What Type of Federal Student Aid Might I Get? __________6
____________________________________ xiv
Earnings in 2005 by Educational Attainment
There are three types of federal student aid ___________________________6
of the Population 25 Years and Over_________________________________ 1
Grants ________________________________________________________________________6
What questions should I ask when considering
a college or career school?
There are four types of federal student aid grants ____________________6
_________________________________________________ 1
Where can I find this information?
What is a Federal Pell Grant? _____________________________________________6
______________________________________ 1
Take the next steps.
What is a Federal Supplemental Educational
_________________________________________________________ 2
Opportunity Grant (FSEOG)? ____________________________________________6
What kind of information should I get from
a school?
What’s the difference between Federal Pell Grants
_______________________________________________________________________ 2
and FSEOGs? _________________________________________________________________6
Find out about financial aid at the school. _____________________________2 What is an Academic Competitiveness
Find out the school’s refund policy. _____________________________________2 Grant (ACG)? _________________________________________________________________6
Find out the school’s return-of-aid policy. _____________________________2 What is a National Science and Mathematics Access
to Retain Talent Grant (National SMART Grant)? ___________________7
Find out the school’s completion and
transfer-out rates. ___________________________________________________________2 What is the difference between the ACG and
the National SMART Grant? ______________________________________________7
FAFSA4caster _____________________________________________________________3 How much financial aid can I get? _______________________________________7
What is FAFSA4caster? _____________________________________________________3 How will I be paid? __________________________________________________________8
Who should use FAFSA4caster? __________________________________________3 How often will I receive funds? ___________________________________________8
What are other benefits? ___________________________________________________3 Can I receive a grant if I’m enrolled less
How do I get started? _______________________________________________________3 than half-time? _______________________________________________________________8
What information does FAFSA4caster provide? ______________________3
The Guide vi
What’s Inside The Guide
Work-Study ________________________________________________________________8 More Federal Student Aid Information ____________________ 14
What is the Federal Work-Study (FWS) Program? ___________________8 Other Financial Aid Sources _____________________________________ 14
What kinds of jobs are there? _____________________________________________8 Financial aid office ________________________________________________________ 14
Are Federal Work-Study jobs on campus or off campus? ___________8 State Higher Education Agency ________________________________________ 14
How much can I earn? ______________________________________________________8 AmeriCorps_________________________________________________________________ 14
How will I be paid? _________________________________________________________ 8 Robert C. Byrd Honors Scholarship Program
Can I work as many hours as I want?
(Byrd Program) ____________________________________________________________ 14
____________________________________ 8
Public libraries and the Internet
Loans
_______________________________________ 14
_________________________________________________________________________ 8
Businesses and labor organizations
Types of loans
___________________________________ 14
________________________________________________________________ 8
Organizations, foundations, etc. _______________________________________ 14
Student Loan Comparison Chart______________________________________ 9
What are the differences in these loan programs?
U.S. Armed Forces_________________________________________________________ 14
_________________ 10
How do I apply for a Perkins or Stafford Loan?
U.S. Department of Veterans Affairs __________________________________ 14
_____________________ 10
How much can I borrow?
Internal Revenue Service (IRS) _________________________________________ 15
________________________________________________ 10
Maximum Annual Loan Limits Chart—Subsidized
www.students.gov _________________________________________________________ 15
and Unsubsidized Direct and FFEL Stafford Loans ___________ 11
It’s a Jungle Out There …
Other than interest, are there any fees or charges
Be Careful
required to get these loans?
__________________________________________________________ 15
_____________________________________________ 11
How will I be paid?
Scholarship scams ____________________________________________________ 15
________________________________________________________ 11
What about scholarship
Can I cancel my student loan if I change my mind,
search services?
even if I have signed the promissory note agreeing
____________________________________________________________ 15
to the terms of the loan? _________________________________________________ 12 How can I tell if these search services
are scams? Are there any signs I should look for?
PLUS Loans
__________________ 15
______________________________________________________________ 12
How do parents and graduate and professional
Identity Theft ___________________________________________________________ 15
degree students apply for a PLUS Loan?______________________________ 12 What is identity theft? ____________________________________________________ 15
What are the eligibility requirements for
How can this happen? ____________________________________________________ 15
PLUS Loans? ________________________________________________________________ 12 What happens if someone steals my identity
Are there any other requirements? ____________________________________ 12 and gets a student loan in my name? __________________________________ 16
Stafford and PLUS Loan Summary ____________________________________ 13 How can I avoid identity theft? _________________________________________ 16
Do we need to find a lender? ____________________________________________ 13
How much can a parent or graduate and
B
professional degree student borrow under
the PLUS Loan program? ________________________________________________ 13 Start Here …
If a parent obtains a PLUS Loan to help pay for
How Do I Apply?
a dependent student’s education, who receives
the loan money—the parent or the student? ________________________ 13 Complete Your FAFSA. Receive Your SAR. _______________ 18
Can a borrower cancel a PLUS Loan even after
Getting Your Federal Student Aid PIN
signing the promissory note and agreeing to the
______________________ 19
terms of the loan? _________________________________________________________ 14 What is a Federal Student Aid PIN and what is it used for? ______ 19
Other than interest, are there any fees or charges
Should I get a PIN if I’m not applying online? ______________________ 19
to get a PLUS Loan? _______________________________________________________ 14
The Guide vii
Re
Wpa
hayt’ing Y
s Insiour S
d
tud
e the G en
ui t L
de oan
How and when should I get a PIN? ____________________________________ 19 C
How do I sign my application? What if I don’t have a PIN? ______ 19
I submitted my FAFSA but did not sign with a PIN.
Repaying
Will I get one automatically? ____________________________________________ 19 Your Student Loan
What if I have questions about the PIN? _____________________________ 20 What You Need to Know as a Borrower _______________________26
Can I get a PIN from the Federal
Student Aid Information Center?
Borrower’s Responsibilities
______________________________________ 20
______________________________________ 27
Completing the FAFSA
Think about how much you’re borrowing ______________________________ 27
_____________________________________________ 20
Signing a promissory note means you
What information do I need to complete
agree to repay the loan
a FAFSA accurately?
___________________________________________________ 27
______________________________________________________ 20
Make payments regardless of receiving
Process for new applicants ______________________________________________ 20 billing notices ______________________________________________________________ 27
Can I apply online? ________________________________________________________ 20 Continue to pay while waiting for deferment
Why should I apply online?
or forbearance approval
_____________________________________________ 21
_________________________________________________ 27
What if I decide I want a paper FAFSA?
Notify your lender or loan servicing agency
______________________________ 21
when you … ________________________________________________________________ 27
Then what should I do?___________________________________________________ 21 Receive entrance and exit counseling _________________________________ 27
Dependency Status ________________________________________________________ 21 Borrower’s Rights
I am considered a dependent student; however,
_____________________________________________________ 28
I have no contact with my parents. What do I do
What you need to know about your loan _____________________________ 28
about reporting my parents’ income? _________________________________ 22 Before you leave school __________________________________________________ 28
If I am a dependent student, whose information do
I report if my parents are divorced or separated?
Grace period ________________________________________________________________ 28
__________________ 22
Do I report stepparents’ information?
Loan repayment schedule _____________________________28
________________________________ 22
Do I need to fill out a FAFSA
Sale of loan __________________________________________________________________ 28
every year I apply for aid? _______________________________________________ 22 Loan Repayment ______________________________________________________ 29
What if I need help filling out my FAFSA? ___________________________ 23 When do I start paying back my student loans? ____________________ 29
How do the schools I’m interested in attending
How much time do I have to repay my
get my FAFSA information?_____________________________________________ 23 student loans? ______________________________________________________________ 29
What if I want to add or change schools later? ______________________ 23 When do parents and graduate and professional degree
The Student Aid Report (SAR)
students begin repaying a PLUS Loan? _______________________________ 29
and Why It’s Important ____________________________________________ 23 How much will I have to repay and how often
do I make payments? _____________________________________________________ 29
After you apply for federal student aid
you’ll receive your FAFSA results in your SAR ______________________ 23 Do I have repayment options? __________________________________________ 29
What do I do with my SAR? _____________________________________________ 23 Examples of Typical Perkins Loan
Repayments Chart _______________________________________________________ 30
If you need to make corrections to your SAR _______________________ 23 How do parents or graduate and professional
Once my SAR is accurate and complete, how
degree students repay their PLUS Loan? _____________________________ 30
do I find out if I’m eligible for federal student
aid and how much I’ll receive?
Are there tax incentives while paying back
_________________________________________ 24
student loans? ______________________________________________________________ 30
Examples of Typical Direct and FFEL
Stafford Loan Repayments ___________________________________________ 31
The Guide viii
What’s Inside The G C
uide
Postponing Loan Repayment
(Deferment and Forbearance) __________________________________ 31
What is deferment? _______________________________________________________ 31
How do I qualify for a deferment? _____________________________________ 31
Can my parents or graduate and professional
degree students defer repayment of their PLUS Loan? ____________ 31
Is there deferment for active military service? ______________________ 31
Loan Deferment Summary Chart ___________________________________ 32
What is forbearance? _____________________________________________________ 32
Applying for deferment or forbearance ______________________________ 32
Are there circumstances when I must be granted
a mandatory forbearance? _______________________________________________ 32
Consolidating Your Loans ________________________________________ 33
What is loan consolidation? _____________________________________________ 33
What kinds of loans can be consolidated? ___________________________ 33
When can I consolidate my loans? _____________________________________ 33
How do I get a consolidation loan
and where can I get more information? ______________________________ 33
What’s the interest rate on a consolidation loan? ___________________ 33
Are there any disadvantages to getting
a consolidation loan? ____________________________________________________ 33
Loan Discharge or Cancellation ________________________________ 34
Is it ever possible to have my federal student
loan discharged or canceled? ___________________________________________ 34
What qualifies my loan for discharge? ________________________________ 34
What qualifies my loan for cancellation? _____________________________ 34
How do I find out if I can get a discharge or cancellation? _______ 34
Perkins Loan Discharge and Cancellation
Summary Chart ___________________________________________________________ 34
Stafford and PLUS Loan Discharge and
Cancellation Summary Chart_________________________________________ 35
Important Terms _____________________________________________________36
State Higher Education Agencies __________________________39
Other Federal Student Aid Publications ______________ 41
The Guide ix
Federal Student Aid
At a Glance
Considering Education
Beyond High School
W hatever type of school beyond high school you
attend—whether it’s university, trade school or
community col ege—you have to be thinking about
how you’re going to pay for it. The cost of education
continues to rise. But if you’re determined to achieve
the success that education beyond high school can
bring, the investment is worth it. But that doesn’t
mean managing these costs isn’t a chal enge.
Federal Student Aid can help. We assist more than
10 mil ion students each year with grants, low-
interest loans and work-study programs. That’s what
this guide is about: steering you step by step through
the process of applying for and receiving aid and
repaying student loans.
Now is the time to take action. You may qualify for
more financial aid than you think. But you won’t
know until you fol ow the steps we describe here.
A
Y
Investing a little time now could pay off in a brighter
REP
future. Start right here.
Y RECEIVE
APPL
E
AR
PREP
The Guide x
Federal Student Aid at a Glance
Do you need help paying for col ege or for a career or vocational school? Th is section is a quick reference to our federal student aid
programs and how to apply for this aid. Th e rest of this publication provides more detail of what you need to know.
Federal Student Aid Summary Chart
Federal Student Aid Program
Type of Aid
Program Details
Annual Award Limits
Federal Pell Grant
Grant: does not have to be repaid
Available almost exclusively to undergraduates; al eligible
$400 to $4,310 for 2007–08
students will receive the Federal Pell Grant amount they
qualify for.
Federal Supplemental
Grant: does not have to be repaid
For undergraduates with exceptional fi nancial need; priority
$100 to $4,000
Educational Opportunity
is given to Federal Pel Grant recipients; funds depend on
Grant (FSEOG)
availability at school.
Academic
Grant: does not have to be repaid
For undergraduates receiving Pell Grants who are U.S.
Competitiveness Grant (ACG)
citizens enrol ed full-time in their fi rst or second
academic year* of study.
For fi rst academic year* students who have completed a
First academic year* students:
rigorous secondary school program of study, graduated
up to $750
from high school after Jan. 1, 2006, and have not been
previously enrol ed in an undergraduate program.
For second academic year* students who have completed a
Second academic year* students:
rigorous secondary school program of study, graduated
up to $1,300
from high school after Jan. 1, 2005, and have at least a
3.0 cumulative GPA at the completion of their fi rst year
of postsecondary study.
National Science and
Grant: does not have to be repaid
For undergraduates receiving Pell Grants, who are U.S.
Up to $4,000 for each of the
Mathematics Access
citizens enrol ed ful -time in their third or fourth academic
third and fourth academic years*
to Retain Talent Grant
year* of an eligible degree program majoring in physical,
(National SMART Grant)
life, or computer sciences, engineering, technology, math-
ematics or a critical-need foreign language and have at
least a 3.0 cumulative GPA.
Federal Work-Study (FWS)
Money is earned while attending
For undergraduate and graduate students; jobs can be on
No annual minimum or
school; does not have to be repaid
campus or off campus; students are paid at least federal
maximum award amounts
minimum wage.
Federal Perkins Loan
Loan: must be repaid
Interest charged on this loan is 5 percent for both
$4,000 maximum for undergraduate students;
undergraduate and graduate students; payment is
$6,000 maximum for graduate and professional
owed to the school that made the loan.
degree students; no minimum award amount
Subsidized Direct or
Loan: must be repaid
Subsidized: U.S. Department of Education pays interest
$3,500 to $8,500,
FFEL Stafford Loan
while borrower is in school and during grace and deferment depending on grade level
periods; you must be at least a half-time* student
and have fi nancial need.
Unsubsidized Direct
Loan: must be repaid
Unsubsidized: Borrower is responsible for interest during
$3,500 to $20,500 (less any subsidized amounts
or FFEL Stafford Loan
life of the loan; you must be at least a half-time* student;
received for the same period), depending on grade
fi nancial need is not a requirement.
level and dependency status
Direct or FFEL PLUS Loan
Loan: must be repaid
Available to parents of dependent undergraduate students
Maximum amount is cost of attendance* minus any
and graduate and professional students enrolled at least
other fi nancial aid the student receives; no minimum
half-time.* Financial need is not a requirement.
award amount
PLUS Loans are unsubsidized: Borrower is responsible for
interest during the life of the loan.
Th e information in this guide was compiled in summer 2007. For any changes to the federal student aid programs since then, visit
www.FederalStudentAid.ed.gov and click on “Students, Parents and Counselors.” Any new information will appear in the “Announcements” section.
A
Y
Most student fi nancial aid comes from the federal government
(FAFSA). If you need help completing the FAFSA, that help is
REP
programs you’ll read about here. Th e U.S. Department of Educa-
free too. You don’t have to pay anyone for help and you should be
tion’s offi ce of Federal Student Aid administers these programs. For
aware of scams and services that will search for fi nancial aid for
other sources of student fi nancial aid, see page 14.
you for a fee. Th e Col ege Scholarship Fraud Protection Act protects
Y RECEIVE
Applying for federal student aid is FREE; that’s why our appli-
you from this type of fraud. We tell you how to protect yourself
APPL
cation is cal ed the Free Application for Federal Student Aid
from scams on page 15.
E
AR
PREP
*See “Important Terms,” page 36.
The Guide xi
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll fi nd a description of them under “Important Terms,” beginning on page 36.
Fe
F der
e al St
l S u
t den
e t A
n i
t A d A
d a t A G
t a Gl la
a nc
ncee
What is federal student aid?
Federal student aid covers school expenses such as tuition and fees,
Federal student aid is financial assistance through the U.S.
room and board, books and supplies and transportation. This aid can
Department of Education available to eligible students enrol ed in also help you pay for a computer and dependent child-care expenses.
an eligible programs* as regular students* at schools participating in (Note that accepting any Title IV student financial aid does not
our federal student aid programs.
commit the student to military or other government service.)
HOW DO I APPLY FOR FEDERAL STUDEnT AID?
STEP
Get free information and help from
STEP
Get a Federal Student Aid PIN, a
your school counselor, the financial aid
personal identification number. A
office at the college or career school
PIN lets you apply, “sign” your
you plan to attend, or the U.S. Depart-
online Free Applicationfor Federal
ment of Education, Federal Student Aid
Student Aid (FAFSA), make
at www.FederalStudentAid.ed.gov
corrections to your application
or 1-800-4-FED-AID (1-800-433-3243).
information, and more—all
Free help is available any time during
online. Apply for a PIN at
the application process. You should
www.pin.ed.gov.
never have to pay for help.
STEP
Collect the documents needed to
STEP
Complete the FAFSA between
apply, including income tax returns
Jan.1, 2008 and June 30, 2009
and W-2 forms (and other records of
(no exceptions to either date!).
income). A full list of what you need
BUT, apply as soon as possible
is at www.fafsa.ed.gov. Tax return
on or after Jan.1 to meet school
not completed at the time you
and state aid deadlines (see note
apply? Estimate the tax information,
at bottom of page). Apply online
apply, and correct information later.
(the faster and easier way) by
going to www.fafsa.ed.gov.
STEP
Federal Student Aid will send you a
STEP
If you are selected for verifica-
Student Aid Report (SAR)—which is a
tion, your school’s financial aid
summary of the information from your
office will ask you to submit tax
FAFSA. Review your SAR, and if
returns and other documents,
necessary, make changes or corrections
as appropriate. Be sure to meet
and submit your SAR for reprocessing.
the school’s deadlines, or you will
Your complete, correct SAR will contain
not receive federal student aid.
your Expected Family Contribution
(EFC)—the number used to determine
your federal student aid eligibility.
All students: Contact the financial aid office if you
STEP
Whether you’re selected for
STEP
have any questions about the aid being offered.
verification or not, make
First-time applicants: Review award letters from
sure the financial aid office
schools and compare the aid being offered. Decide
at the school has all the
which school to attend based on a combination of
information needed to
(a) how well the school suits your needs (programs
determine your eligibility.
of study and academics) and (b) its affordability
after all aid is taken into account.
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Note: You also might be able to get financial aid from your state government, your school or a private scholarship. Research nonfederal
aid early (ideal y, start in the spring of your junior year of high school). Be sure to meet all application deadlines!
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The Guide xii
Federal Student Aid at a Glance
There are three categories of federal student aid: grants, work-
4
Pass an approved ability-to-benefit* (ATB) test (if you
study and loans. (See chart on page xi for an overview of these
don’t have a diploma or GED, a school can administer a
programs.) Check with your school to find out which programs
test to determine whether you can benefit from the
your school participates in.
education offered at that school).
4
Meet other standards that your state establishes
Who gets federal student aid?
and that we have approved.
Eligibility for most federal student aid programs is based
4
Complete a high school education in a homeschool
on financial need and several other factors. Your eligibility is
setting approved under state law.
determined by the information you provide on the FAFSA.
• Register (if you haven’t already) with the Selective
Basic eligibility requirements:
Service, if you’re a male between the ages of 18 and 25.
• Demonstrate financial need (except for certain loans; see
• Maintain satisfactory academic progress* once in
pages 9 and 10).
school. (See the complete list of eligibility requirements
on pages 4 and 5.)
• Be a U.S. citizen or eligible noncitizen* (for most pro-
grams) with a valid Social Security number (SSN).
• Be working toward a degree or certificate in an eligible
FAFSA4caster
program.*
If you’re not attending col ege this fal , but would like to find
• Show, by one of the fol owing means, that you’re
out how much federal student aid you might be eligible for,
qualified to obtain a postsecondary education:
the FAFSA4caster is for you. This new product is for those who
want to get an early start on the financial aid process. You can
4
Have a high school diploma or a General
access FAFSA4caster at www.FederalStudentAid.ed.gov. For
Educational Development (GED) certificate.*
more information on FAFSA4caster, see page 3.
PROCESS SUMMARY CHART
PREPARE APPLY RECEIVE REPAY
This guide gives you infor-
This step is where many de-
We will inform you and
If your aid is in the form
mation about federal student
serving students falter, either
your selected schools about
of a loan or loans, this guide
aid programs, as well as
because they assume they
your Expected Family
will fill you in on the repay-
other means of paying for
won’t qualify, or because the
Contribution (EFC). Then
ment process.
your education after high
FAFSA may seem complex
they (or your student loan
school. Take what we say to
and difficult to complete.
provider) will tell you how
heart … and then take the
In the case of the FAFSA, the
much—and what sorts of—
next step.
improved online version
aid you qualify for.
streamlines the application
process considerably. It’s a
good idea to apply. You may
be surprised by the amount
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of aid for which you qualify.
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The graphic at the lower left and right of each page provides a key to the primary topic
Y RECEIVE
—based on the Prepare-Apply-Receive-Repay cycle—covered in the text on that page.
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*See “Important Terms,” page 36.
The Guide xiii
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
A
What You Should Know
Before You Apply
Education After High School
O ur Federal Student Aid team is committed to making
sure that all eligible students can benefit from financial
assistance for education beyond high school. Congress
authorizes bil ions of taxpayer dol ars for this purpose
every year.
The amount and type of federal aid we provide doesn’t
always depend solely on financial need. Once students
apply for aid, many are surprised by the amount of aid
they receive. So a good rule of thumb is: Don’t assume
you’re not eligible. Take the time to complete and submit
the Free Application for Federal Student Aid—the FAFSA
(more on that later).
The U.S. Department of Education, Federal Student Aid
offers a variety of student financial aid programs, which
are described in this guide along with other sources you can
turn to for financial help in completing your education.
Remember: the more you know about how to make
your ambitions real, the closer you are to fulfil ing them.
It’s up to you to make it happen.
A
Education beyond high school is a big investment of time, money
Remember to careful y evaluate all relevant aspects of the
and eff ort. You’ll need to fi gure out how to pay for your education
schools you’re considering. Just because a school participates
but all the eff ort you put into it will be worth it. Over a working
in our federal student aid programs doesn’t mean we’ve endorsed
life, a person with a bachelor’s degree will earn almost twice as
the quality of education the school off ers. We don’t approve a
much as someone with just a high school diploma. More educa-
school’s curricula, policies or administrative practices, except
tion equates to higher earnings. Th is is most noticeable at higher
as they relate to how the school administers our federal student
education levels (see statistics below). Th e more education you
aid programs.
have, the more you earn. So invest in your education; the payoff
lasts a lifetime.
When we refer to “school” in this guide,
we mean a two-year or four-year public
or private col ege or university, or a career
Earnings in 2005 by Educational Attainment of
or trade school.
the Population 25 Years and Over*
Education Level
2005 Annual Income (U.S. dollars)
High School Diploma
$38,344
What questions should I ask when considering
Associate Degree
$47,159
a college or career school?
Bachelor’s Degree
$67,156
• Does the school off er the courses and type
Master’s Degree
$81,281
of program I want?
Ph.D.
$107,808
• Do I meet the admissions requirements?
Professional Degree
$140,551
• Does the school off er a high quality education?
• Does the school participate in federal student
*Year round full-time workers
aid programs?
Source: U.S. Census Bureau, Current Population Survey,
• Does the school off er services I need and
2006 Annual Social and Economic Supplement
activities I’m interested in?
Th e diff erence between income levels becomes even more
Where can I fi nd this information?
apparent in graph format.
• Read the school’s catalog or introductory materials.
• Talk with students who currently attend or attended
the school you’re considering to get their opinion of
the school.
$140,000
• Check the school’s Web site.
$120,000
• Visit the reference section of your local library.
$100,000
• Talk to high school counselors and your state higher
education agency. (See the section “State Higher
$80,000
Income
Education Agencies” on page 39 for a list of agencies
$60,000
and their phone numbers.)
$40,000
• Check to see if any complaints about the school have
$20,000
been fi led with the local Better Business Bureau or
the consumer protection division of the state attorney
$0
general’s offi ce. Search for Better Business Bureau offi ces
H.S.
A.A.
B.A.
M.A.
Ph.D. Professional
Degree
at www.bbb.org.
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Education Level
You’re paying for a high-quality education. Make sure you get it.
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Source: U.S. Census Bureau, Current Population Survey,
2006 Annual Social and Economic Supplement
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The Guide 1
What You Should Know Before You Apply
Take the next steps.
• The school’s process for determining your
Before enrol ing, make appointments to visit the col eges or career
financial need.
schools you’re considering. Bring a list of questions to ask school
• The school’s process for determining the type
representatives. Your education is a major investment, so find out
and amount of assistance in your financial
as much information as you can before you enrol .
aid package.*
What kind of information should I get from
• The method and timing of financial aid payments
made to you.
a school?
• The school’s basis for determining whether you’re
• Find out if the school participates in federal student
making satisfactory academic progress,* and what
aid programs.
happens if you’re not. (Whether you continue to
• Ask about the school’s accreditation,* licensing and
receive federal student aid depends, in part, on
campus security.
whether you make satisfactory academic progress.*)
• Find out the school’s loan default* rate (the percentage
• If you’re offered a Federal Work-Study job, the nature
of students who attended the school, took out federal
of the job, the hours you must work, your duties, the
student loans and failed to repay their loans on time).
pay and the method and timing of payment to you.
You might not be able to get aid from some of our
programs at a school that has a high default* rate.
Find out the school’s refund policy.
• Find out the school’s job placement rates (the percentage
If you enroll but never begin classes, you should get most
of students who are placed in jobs relevant to their
of your money back. If you begin attending classes but leave
courses of study).
before completing your course work, you might be able to
get some of your money back.
If the school advertises its job placement rates, it must
also publish:
Find out the school’s return-of-aid policy.
• the most recent employment statistics,
If you receive federal student aid from any program mentioned
• graduation statistics, and
in this publication (except for Federal Work-Study), and you
withdraw from school, some of that money might have to be
• any other information necessary to back up
given back to the source by you or by your school. Even if you
its claims.
don’t finish your course work, you’ll have to repay the loan funds
This information must be made available at the time you apply
you received, minus any student loan funds your school has
for admission to the school.
returned to your lender.
Make sure you get the information you need and check out all
of your options as you prepare for education after high school.
Find out the school’s completion and
It’s never too early to get started pursuing a career, so don’t wait
transfer-out rates.
until the last minute to get started! Know what to expect from
If many students withdraw from a school, it might indicate
the schools you’re considering.
a problem with the school. A school is required to disclose to
current and prospective students the percentage of students
Find out about financial aid at the school.
who complete the school’s programs and the percentage of
You have the right to receive the following information
students who transfer out.
from the school:
• The location, hours and counseling procedures
DID YOU KNOW …
for the school’s financial aid office.
You can create a FREE, personalized student
• The financial aid assistance available, including
account folder at our Web site Student Aid on the
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federal, state, local, private and institutional
Web at www.FederalStudentAid.ed.gov. Just click
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financial aid programs.
on the “MyFSA” icon at the “Students, Parents and
Counselors” option and follow the instructions.
• The procedures and deadlines for submitting
Your personal account will allow you to do online
applications for each available financial
college and scholarship searches and populate your
Y RECEIVE
aid program.
FAFSA with information you enter for your account.
APPL
• The school’s criteria for selecting financial
It’s entirely free.
ARE
aid recipients.
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The Guide 2
A
FAFSA4caster
• Your Social Security number;
• To create a password, used to secure data and al ow you to
What is FAFSA4caster?
retrieve your saved or submitted FAFSA4caster;
FAFSA4caster is an online tool to help students and families
• To refer to your and your parents’, if you’re a dependent
prepare financial y for col ege before official y applying for
student, W-2 forms, bank statements and business and
federal student aid. It provides an estimate of federal student aid
mortgage information; and
eligibility by instantly calculating an estimated Expected Fam-
ily Contribution*—the indicator used to estimate a family’s or a
• Your Alien Registration number (if not a U.S. citizen).
student’s ability to contribute toward the cost of an education after
high school. FAFSA4caster determines what type of federal aid
What information does FAFSA4caster provide?
(grants, work-study and loans) the student is eligible to receive
When you submit your FAFSA4caster, you will be able to see what
and provides an estimated award amount for each.
col ege might cost depending on the type of school you plan to attend.
If you plan to attend school full-time at a four-year public school,
Who should use FAFSA4caster?
it shows the types of federal student aid that might help cover that
FAFSA4caster is not just for high school juniors. Parents of
cost, listing your estimated award amount for the Federal Pell Grant
younger students can use it to receive early estimates, create
Program and providing examples of award packages showing in-state
scenarios based on future earnings, and establish col ege savings and out-of-state costs. Final y, FAFSA4caster shows any estimated
strategies. Students considering going back to col ege can also
financial need that remains after the estimated aid amounts and
use FAFSA4caster to get an idea of how much federal aid they may
EFC* are taken into account.
qualify to receive.
The benefit of using FAFSA4caster goes beyond early estimates.
Reducing the Cost of Education
Some of the data entered in FAFSA4caster will populate FAFSA on There are other options you might consider to lower the cost of
the Web when the student official y applies for federal student aid.
your education after high school. The fol owing are a few ideas to
Note: To apply for aid, students must use FAFSA on the Web
think about.
at www.fafsa.ed.gov.
Lower-cost schools
What are other benefits?
If you’ll be working toward a bachelor’s degree, you might con-
FAFSA4caster also:
sider starting at a two-year community col ege and then transfer-
• Reduces the time it wil take to complete the online ap-
ring to a four-year school. Community col eges are usual y less
plication, FAFSA on Web
expensive than four-year schools. (Some four-year schools that
are partial y funded by local or state taxes can be less expensive as
• Helps users become familiar with the student aid lifecycle
wel .) Because attending a community col ege al ows you to live at
• Conducts a data match with the Social Security Adminis-
home, you can save money on room and board.
tration; this gives students the opportunity to resolve issues
If you decide to start at a community col ege, make sure your
prior to applying for federal student aid. If a Social Security
community col ege courses will transfer to your four-year col ege
number match fails, students will be notified to have the
and that they will count toward your bachelor’s degree. Many
issue resolved before official y applying for aid.
community col eges have “articulation agreements” with four-year
• Automatical y generates and e-mails the Federal Student
col eges under which the coursework taken at the community
Aid PIN for the student to use when applying for federal
col ege transfers into the four-year degree program. Be sure to ask
student aid at FAFSA on the Web.
about the types of articulation agreements the community col ege
has, with whom, and for what programs of study. Discuss any con-
How do I get started?
cerns you have about transfer courses and credits with the col ege
You can access FAFSA4caster at www.FederalStudentAid.ed.gov.
registrar at the col ege you’re transferring to.
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Remember that the Free Application for Federal Student Aid
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(FAFSA) or FAFSA on the Web, the online version, is the applica-
State Higher Education Agency
tion used to apply for federal student aid. But if you’re not ready
Contact your state Higher Education Agency (see page 39) about
to file the FAFSA, you can submit a FAFSA4caster to receive an
any aid program or scholarship sponsored by your state.
early estimate of your student aid eligibility. You’ll need:
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*See “Important Terms,” page 36.
The Guide 3
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
What You Should Know Before You Apply
Work or volunteer opportunities
• You must meet satisfactory academic progress* standards set
You can work part-time to pay part of your costs. Be sure your
by the postsecondary school you are or will be attending.
work and school schedules don’t conflict and that you save enough You might be able to receive aid for correspondence or telecom-
time for studying.
munications courses as long as they are part of a recognized
certificate or degree program.
Tax breaks
Certain borrowers can take a tax deduction for the interest actu-
Legal and other requirements
al y paid on student loans. This benefit applies to all loans used to
• You must be a U.S. citizen or eligible noncitizen.*
pay for postsecondary education school expenses. The maximum
• You must have a valid Social Security number (SSN)
deduction is $2,500 a year.
(unless you’re from the Republic of the Marshal Islands, the
Hope or Lifetime Learning tax credit
Federated States of Micronesia or the Republic of Palau). If
you don’t have an SSN, you can find out more about apply-
You or your parents might also qualify for one or both of these tax
ing for one at www.ssa.gov or by cal ing 1-800-772-1213.
credits. See page 15 for additional information about tax credits,
TTY users can call 1-800-325-0778.
deductions and the Internal Revenue Service.
• When you apply for federal student aid you sign a state-
DID YOU KNOW …
ment that certifies that you will use federal student aid for
Nearly half of all undergraduates or their parents
educational purposes only. You also certify that you are
had their taxes reduced by an average of $600
not in default* on a federal student loan and do not owe a
by claiming education tax benefits under the Hope
refund on a federal student grant (which could happen if
and/or Lifetime Learning tax credits.
you withdraw from school, for example).
• You must comply with Selective Service registration.* If
Am I Eligible?
you’re a male aged 18 through 25 and you have not regis-
Basic requirements
tered you can, at the same time you complete your FAFSA,
give the Selective Service System permission to register
To receive aid from the federal student aid programs discussed
you by means of the FAFSA. You can also register online at
in this guide, you must meet certain criteria.
www.sss.gov or call 1-847-688-6888. TTY users can cal
Financial need
1-847-688-2567.
Except for some loan programs, you must show that you have fi-
Drug Conviction?
nancial need, according to our requirements. See “Financial Need
Everyone must answer Question 31 on the FAFSA, “Have
and Expected Family Contribution* (EFC)” on page 5.
you been convicted for the possession or sale of il egal drugs
Education requirements
for an offense that occurred while you were receiving federal
student aid (such as grants, loans, and work-study)?”
• You must demonstrate by one of the fol owing means
that you are qualified to enroll in postsecondary education:
• General y, if you have been convicted for the possession or
4 Have a high school diploma or a General Educational
sale of il egal drugs for an offense that occurred while you
Development (GED) certificate.*
were receiving federal student aid, you will be ineligible
4 Pass an approved ability-to-benefit* (ATB) test. If you
for a period of time based on the type and number of
don’t have a diploma or GED, you can take an approved
convictions. If you answer “Yes” to this question, it is very
ATB test to determine whether you can benefit from the
important that you complete and submit the FAFSA to
education offered at that school.
determine your eligibility. If you are submitting a paper
FAFSA, you will be mailed a worksheet to assist you in de-
4
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Meet other standards your state established and that we
termining whether your conviction affects your eligibility
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have approved.
for federal student aid. If you are applying using FAFSA
4 Complete a high school education in a homeschool setting
on the Web at www.fafsa.ed.gov, you will be provided the
approved under state law.
electronic version of the same worksheet during your on-
Y RECEIVE
line session. If you need assistance or have any questions
• You must be enrol ed or accepted for enrol ment as a regu-
on how to answer Question 31, call 1-800-4-FED-AID
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lar student* working toward a degree or certificate in an
(1-800-433-3243) for help from the Federal Student Aid
ARE
eligible program*.
Information Center.
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The Guide 4
A
Even if you’re ineligible for federal student aid because of
To determine your financial need for federal student aid programs
a drug conviction, you should still complete the FAFSA
(except for an unsubsidized Stafford Loan), your school subtracts the
because most schools and states use FAFSA information to
Expected Family Contribution (EFC) from your cost of attendance.*
award nonfederal aid.
• You have limited eligibility for federal student aid while you’re
Determining Your Financial Need
incarcerated. General y, you’re only eligible for a Pell Grant
We use your Expected Family Contribution*
and then only if you’re NOT incarcerated in a federal or
(EFC) to determine your financial need:
state penal institution.
Cost of Attendance*
“Match” requirements
– Expected Family Contribution (EFC)
When you apply for federal student aid, we verify some of your in-
formation with certain federal agencies, including the Social Secu-
= Financial Need
rity Administration (for verification of Social Security numbers and
U.S. citizenship status) and the Department of Homeland Security
The school uses federal grants and other financial aid to meet
(to verify Alien Registration numbers). If the information doesn’t
your financial need.
match, the discrepancy must be resolved before you can receive fed-
eral student aid. We also check your records against our database,
Because the EFC formula must be applied to each family’s financial
the National Student Loan Data System (NSLDS),* to verify that
information, we cannot tell you here whether you will be eligible for
you haven’t defaulted on your federal student loan, haven’t received
federal student aid or estimate how much aid you might receive. You
an overpayment on a federal grant or a Federal Perkins Loan and
can use FAFSA4caster at www.FederalStudentAid.ed.gov to get an
haven’t borrowed more than the total limit al owed. We also check
estimate of your financial aid award. The information you submit with
your record against Veterans Affairs if you answer that you are a
FAFSA4caster can be used to populate your FAFSA on the Web when
male. Most males between the ages of 18 and 25 must register with
you’re ready to apply for aid (see page 3). But remember, to find out
Selective Service in order to be eligible for federal student aid.
exactly what you will be eligible to receive, you must apply for financial
aid. If you want to see how the EFC formula works, you can get
detailed worksheets from our Web site at www.FederalStudentAid.
DID YOU KNOW …
ed.gov/pubs
Federal Student Aid issued $83 billion in aid in
. Click on the year under “The EFC Formula” or you can
2007 (plus another $32 billion in consolidation
call the Federal Student Aid Information Center at 1-800-4-FED-AID
loans). Ten million students in 6,200 postsecondary
(1-800-433-3243).
institutions received these loans.
After you receive your SAR, you might also receive an award letter*
from the school(s) listed on your FAFSA, especial y the school(s)
Financial need and Expected Family
that offer you admission. Contact the financial aid office at the
Contribution (EFC)
school(s) that sent you an award letter* if you have questions
about your student financial aid award.
Aid for most of our programs is awarded based on financial need
(except for unsubsidized Stafford Loans and PLUS Loans). See
I think I have some special circumstances in
pages 9–10.
my family. Are these considered in determining
The EFC is a measure of your family’s financial strength and indicates my financial needs?
how much of your and your family’s financial resources (for depen-
dent students) should be available to help pay for your education. The The EFC formula is basical y the same for all applicants, but there is
EFC is calculated from the information you report on the FAFSA.
some flexibility. Your financial aid administrator* can adjust the cost
of attendance* or the information used to calculate your EFC to
Your EFC is calculated according to a formula established by law.
take into account your special circumstances. These circumstanc-
Your family’s income (taxable and untaxed), assets and benefits
es could include your family’s unusual medical expenses, tuition
(for example, unemployment or Social Security) are considered in expenses or unemployment.
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determining your EFC. Your family size and the number of family
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members who will be attending a col ege or career school are
The financial aid administrator* must have compel ing reasons to use
also considered. Your EFC will appear on the Student Aid Report*
professional judgment to make adjustments because of special
(SAR) you receive after you file your FAFSA.
circumstances. You will have to provide adequate documenta-
tion to support any adjustments. The financial aid administrator’s* Y RECEIVE
decision as to whether you have special circumstances is final and APPL
can’t be appealed to us.
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*See “Important Terms,” page 36.
The Guide 5
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
What You Should Know Before You Apply
What Type of Federal Student Aid
What is a Federal Supplemental Educational
Might I Get?
Opportunity Grant (FSEOG)?
• FSEOGs are awarded to undergraduate students with ex-
There are three types of federal student aid:
ceptional financial need—those with the lowest Expected
• Grants—financial aid that doesn’t have to be repaid (unless,
Family Contribution* (EFC) numbers.
for example, you withdraw from school and owe a refund).
• Federal Pel Grant recipients receive priority for FSEOG awards.
• Work-Study—al ows you to earn money for your education.
• FSEOG awards range from $100 to $4,000 a year. The amount
• Loans—al ow you to borrow money for your education.
of the award is determined by your school’s financial aid office.
You must repay your loans, with interest.
What’s the difference between Federal Pell Grants
Grants
and FSEOGs?
Federal Pell Grants:
There are four types of federal student aid grants:
• If you’re eligible for a Pel Grant you’l receive the ful amount
• Federal Pel Grant
you qualify for—each school participating in the program
• Federal Supplemental Educational Opportunity Grant (FSEOG)
receives enough funds each year from the U.S. Department of
• Academic Competitiveness Grant (ACG)
Education to pay the Pell amounts for all its eligible students.
• National Science and Mathematics Access to Retain Talent
• The amount of other student aid you might qualify for does
Grant (National SMART Grant)
not affect the amount of your Pell Grant.
Unlike loans, grants are not repaid unless, for example, you are award-
FSEOGs:
ed funds incorrectly or you withdraw from school prior to the planned • Unlike Pel Grants, the amount of FSEOGs you receive
end of term. All federal grants are awarded to students with financial
depends not only on your financial need but also on the
need. The amount of your Federal Pell Grant depends on your cost of
amount of other aid you get and the availability of funds
at endance,* expected family contribution,* enrol ment status (full or
at your school.
part-time) and whether you at end for a full academic year* or less. To • Receiving other aid might reduce the amount of your
receive a FSEOG, ACG, or National SMART Grant, you must first be
FSEOG award.
eligible and receive a Federal Pell Grant. The amount of your FSEOG,
ACG and National SMART Grant depends on your financial need (see • Not al schools participate in the FSEOG Program.
Financial Need and Expected Family Contribution (EFC) on page 5).
• The school’s financial aid office decides how to award
these funds.
The Col ege Cost Reduction and Access Act, enacted on Sept. 27,
• Each school participating in the FSEOG Program receives
2007, makes col ege more affordable for many students. For the
a certain amount of FSEOG funds each year from the U.S.
latest information, and to see how the new law affects federal
Department of Education, Federal Student Aid. When all
student aid grants, visit www.FederalStudentAid.ed.gov, click
of those funds have been disbursed for that award year, no
on “Students, Parents and Counselors.” You’ll find the information
more FSEOG awards can be made for that year.
you need in the “Announcements” section.
Due to limited funds, it’s important to apply early to be considered for
What is a Federal Pell Grant?
these funds. Not everyone who qualifies for an FSEOG might get one.
• Pel Grants are the foundation of federal student financial
What is an Academic Competitiveness Grant (ACG)?
aid, to which aid from other federal and nonfederal sources
This grant program began in the 2006–07 award year for full-
might be added.
time undergraduate students. The maximum award for a first
• Pel Grants are general y awarded only to undergraduate
academic year* eligible undergraduate student is $750; the
A
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students—those who haven’t earned a bachelor’s or gradu-
maximum award for a second academic year* eligible under-
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ate degree.
graduate student is $1,300.
• In some limited cases, however, you might receive a Pel
ACG Requirements
Grant if you’re enrol ed in a postbaccalaureate teacher
Y RECEIVE
To receive an ACG, a student must
certificate program.
APPL
• Amounts can change yearly. The maximum award for the
• receive a Federal Pel Grant during the same award year;
ARE
2007–08 award year was $4,310.
• be a U.S. citizen;
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The Guide 6
A
• be a first- or second-year full-time undergraduate student
be eligible for this grant.
in a degree program at a two-year or four-year degree-
Note: There are additional steps you need to take to ensure you’re
granting institution;
considered for an ACG. Students who fill out FAFSA on the Web
• have completed a rigorous secondary school program of
are asked questions particular to the ACG. If a student is a U.S.
study; and
citizen, eligible for a Federal Pell Grant, and within the age range
• if a first-year student—have completed secondary
to have graduated from high school after Jan. 1, 2005, these ques-
school after Jan. 1, 2006, or
tions appear as additional screens during the application process.
The paper FAFSA does not contain these questions. Applicants
• if a second-year student—have completed secondary school
who file the paper FAFSA, are U.S. citizens, eligible for a Federal
after Jan. 1, 2005, and have at least a 3.0 grade point average as
Pell Grant and within the age range to have graduated from high
of the end of the first academic year of undergraduate study.
school after Jan. 1, 2005 will receive instructions on what to do
For a list of recognized rigorous programs of secondary
in their Student Aid Report* (SAR). The SAR tel s the student to
school study in your state visit
use FAFSA on the Web or call the Federal Student Aid Informa-
www.ed.gov/admins/finaid/about/ac-smart/state-programs.html
tion Center (1-800-433-3243) to provide additional information.
Because of this extra step in the paper process, we urge students
What is a National Science and Mathematics Access to use FAFSA on the Web.
to Retain Talent Grant (National SMART Grant)?
When you receive a SAR, remember to read the comments and
This grant program is for full-time undergraduate students who are en- respond appropriately.
rol ed in the third or fourth academic year* of undergraduate study. The
award is for up to $4,000 for each of the third and fourth academic years. How much financial aid can I get?
National SMART Grant Requirements
Pell Grant
To receive a National SMART Grant, a student must
• Pel Grant award amounts can change yearly, but Pel Grant
• receive a Federal Pel Grant during the same award year;
awards for the 2007–08 award year (July 1, 2007 to June 30,
• be a U.S. citizen;
2008) ranged from $400 to $4,310.
• be a full-time student in his or her third or fourth academic
• How much grant aid you get depends on:
year* of an undergraduate degree program;
4 Your EFC.
• be pursuing a major in physical, life, or computer sciences,
4 Your cost of attendance.*
mathematics, technology, engineering or a critical foreign
4 Whether you’re a full-time or part-time student.
language; and
4 Whether you at end school for a full academic year* or less.
• have at least a 3.0 grade point average as of the end of the
second award year and continue to maintain a 3.0 GPA that
• You may receive only one Pel Grant in an award year.
must be checked prior to the beginning of each payment
• You may not receive Pel Grant funds from more than one
period (e.g., semester).
school at a time.
For a list of National SMART Grant eligible majors, visit
FSEOG
ifap.ed.gov/dpcletters/GEN0706.html
• You can get between $100 and $4,000 an academic year,*
What is the difference between the ACG and the
depending on:
National SMART Grant?
4 When you apply.
• The ACG is for undergraduate students who are enrol ed in
4 Your financial need.
the first or second academic year* of an eligible program* in
4 The funding level of the school you’re attending.
any field, who have completed a rigorous secondary school
4 The policies of your school’s financial aid office.
program of study, and who also have at least a 3.0 cumula-
ACG
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tive GPA for the first academic year.*
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• Up to $750 for first academic year* students.
• The National SMART Grant is for undergraduate students
who are enrol ed in the third or fourth academic year* of
• Up to $1,300 for second academic year* students.
an eligible program* and pursing an eligible major with at
National SMART Grant
Y RECEIVE
least a 3.0 cumulative GPA. The student does not have to
• Up to $4,000 for each of the third and fourth
APPL
complete a rigorous secondary school program of study to
academic years.
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*See “Important Terms,” page 36.
The Guide 7
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
What You Should Know Before You Apply
How will I be paid?
How much can I earn?
Your school will:
You’l earn at least the current federal minimum wage. However, the
• Credit your grant funds to your school account;
amount might be higher depending on the type of work you do
and the skil s required for the position.
• Pay you directly (usual y by check);
• Combine these methods; or
Your total FWS award depends on:
• With your permission, credit your bank account.
• When you apply,
• Your level of financial need, and
How often will I receive funds?
• Your school’s funding level. (We provide a certain amount
• Schools must pay you at least once per term (semester,
of work-study funds; when all funds have been awarded, no
trimester or quarter).
additional work-study awards can be made for that year.)
• Schools that don’t use formal y defined, traditional terms
(e.g., semester, quarter, etc.) must pay you at least twice per
How will I be paid?
academic year.*
• Undergraduate student—by the hour.
• Graduate student—by the hour or by salary, depending on
Can I receive a grant if I’m enrol ed less than half-time?
the work you do.
Yes, but only for the Federal Pell Grant and the FSEOG. However, you • Your school must pay you at least once a month.
will not receive as much as if you were enrol ed full-time. You must
• Your school must pay you directly unless you request that
be enrol ed full-time for the ACG and the National SMART Grant.
the school:
4
Work-Study
send your payments directly to your bank account, or
4 use the money to pay for your education-related institu-
What is the Federal Work-Study (FWS) Program?
tional charges such as tuition, fees and room and board.
Under the FWS Program, you can work part-time to earn money for
Can I work as many hours as I want?
your education. The FWS Program:
No. The amount you earn can’t exceed your total FWS award. When
• Provides part-time employment while you are enrol ed in
assigning work hours, your employer or financial aid administrator
school.
will consider your class schedule and your academic progress.
• Helps pay your educational expenses.
Loans
• Is available to undergraduate and graduate students.
• Is available to full-time or part-time students.
Student loans, unlike grants and work-study, are borrowed money that
must be repaid, with interest, just like car loans and mortgages. You can-
• Is administered by schools participating in the FWS Program.
not have these loans canceled because you didn’t like the education you
• Encourages community service work and work related to
received, didn’t get a job in your field of study or because you’re having
your course of study, whenever possible.
financial difficulty. Loans are legal obligations, so before you take out a
What kinds of jobs are there?
student loan, think about the amount you’ll have to repay over the years.
The FWS Program provides jobs for students demonstrating
Your Federal Student Loans: Learn the Basics and Manage Your Debt
financial need. The program encourages community service work
can help you learn more about federal student loan debt. You can
and work related to the student’s course of study.
access this publication at www.FederalStudentAid.ed.gov.
Are Federal Work-Study jobs on campus
The Col ege Cost Reduction and Access Act, enacted on Sept. 27,
or off campus?
2007, makes col ege more affordable for many students. For the lat-
Both. If you work on campus, you’ll usual y work for your school. If
est information, and to see how the new law affects federal student
you work off campus, your employer will usual y be a private non-
loans visit www.FederalStudentAid.ed.gov, click on “Students,
A
Y
Parents and Counselors.” You’ll find the information you need in
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profit organization or a public agency, and the work performed
must be in the public interest.
the “Announcements” section.
Some schools might have agreements with private for-profit em-
Types of loans:
Y RECEIVE
ployers for FWS jobs. These jobs must be relevant to your course of
study (to the maximum extent possible). If you attend a proprietary
• Federal Perkins Loans are:
APPL
school (e.g., a for-profit institution), there may be further restric-
4 Made through participating schools to undergraduate,
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tions on the types of jobs you can be assigned.
graduate and professional degree students.
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The Guide 8
A
4 Off ered by participating schools to students who
demonstrate fi nancial need.
William D. Ford Federal Direct Loan (Direct Loan) Program.
Loans made through this program are referred to as Direct
4 Made to students enrol ed full-time or part-time.
Loans. Eligible students and parents borrow directly from the
4 Repaid by you to your school.
U.S. Department of Education at participating schools. Direct
Loans include subsidized and unsubsidized Direct Staff ord Loans
• Staff ord Loans are for undergraduate, graduate and
(also known as Direct Subsidized Loans and Direct Unsubsidized
professional degree students. You must be enrol ed as at
Loans), Direct PLUS Loans, and Direct Consolidation Loans. You
least a half-time* student to be eligible for a Staff ord Loan.
repay these loans directly to us.
Th ere are two types of Staff ord Loans: subsidized and unsub-
Federal Family Education Loan (FFEL) Program. Loans made
sidized. You must have fi nancial need to receive a subsidized
through this program are referred to as FFEL Loans. Private lenders
Staff ord Loan. Financial need is not a requirement to obtain an
provide funds that are guaranteed by the federal government. FFEL
unsubsidized Staff ord Loan. Th e U.S. Department of Educa-
Loans include subsidized and unsubsidized FFEL Staff ord Loans,
tion will pay (subsidize) the interest that accrues on subsidized
FFEL PLUS Loans and FFEL Consolidation Loans. You repay these
Staff ord Loans during certain periods. Th ese loans are made
loans to the bank or private lender that made you the loan.
through one of two U.S. Department of Education programs:
Student Loan Comparison Chart
Loan Program
Eligibility
Award Amounts
Interest Rates
Lender/Length of Repayment
Federal Perkins
Undergraduate and
Undergraduate—up to $4,000 a year
5 percent
Lender is your school
Loans
graduate students
(maximum of $20,000 as an undergraduate)
Repay your school or its agent
Graduate—up to $6,000 a year (maximum
Up to 10 years to repay, depending on amount owed
of $40,000, including undergraduate loans)
Amount actual y received depends on fi nancial
need, amount of other aid, availability of
funds at school
FFEL Stafford
Undergraduate and
Depends on grade level in school and
Fixed rate of 6.8 percent for loans fi rst
Lender is a bank, credit union or other participating
Loans (subsidized graduate students; must be dependency status (see chart on page 11)
disbursed on or after July 1, 2006
private lender
and unsubsidized) enrolled at least half-time*
Financial need is required for subsidized
The federal government pays interest
Repay the loan holder or its agent
loans
on subsidized loans during school and
Between 10 and 25 years to repay, depending on
Financial need not necessary for unsubsidized
certain other periods
amount owed and type of repayment plan selected
loans
The borrower pays all interest on
unsubsidized loans
Direct
Same as above
Same as above
Same as above
Lender is the U.S. Department of Education; repay
Stafford Loans
Department
(subsidized and
Between 10 and 25 years to repay, depending on
unsubsidized)
amount owed and type of repayment plan selected
FFEL PLUS Loans
Parents of dependent
Student’s Cost of Attendance*
Fixed rate at 8.5 percent for loans fi rst
Same as for FFEL Stafford Loans above
undergraduate students
– Other aid student receives
disbursed on or after July 1, 2006;
enrol ed at least half-time*
borrower pays all interest
(see dependency status)
= Maximum loan amount
Graduate or professional
degree students enrol ed at
least half-time*
Borrower must not have
negative credit history
Direct PLUS
Same as above
Same as above
Fixed rate at 7.9 percent for loans fi rst
Same as for Direct Stafford Loans above, except
A
Y
Loans
disbursed on or after July 1, 2006;
that the Income Contingent Repayment Plan is
borrower pays all interest
not an option
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Th e information in this guide was compiled in summer 2007. For any changes to the federal student aid programs since then, visit
Y RECEIVE
www.FederalStudentAid.ed.gov and click on “Students, Parents and Counselors.” Any new information will appear in the “Announcements” section.
APPL
ARE
PREP
*See “Important Terms,” page 36.
The Guide 9
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll fi nd a description of them under “Important Terms,” beginning on page 36.
What You Should Know Before You Apply
• PLUS Loans (Direct or FFEL) are loans parents can obtain
How much can I borrow?
to help pay the cost of education for their dependent under-
graduate children. In addition, graduate and professional
Perkins Loans
degree students may obtain PLUS Loans to help pay for their The Student Loan Comparison Chart on page 9 shows the
own education.
maximum Perkins Loan funds you can receive, depending on
whether you’re an undergraduate, graduate or professional
• Consolidation Loans (Direct or FFEL) al ow student or
degree student. However, the amount you can borrow might
parent borrowers to combine multiple federal education
be less than the maximum available.
loans into one loan with one monthly payment. (See page
33 for more information on these loans.)
• Each school participating in the Federal Perkins Loan
program receives a certain amount of Perkins funds
each year from the U.S. Department of Education.
Whether you (or your parents) receive a Stafford
• When al available funds for that award year have been
or PLUS Loan depends on which program the
distributed, no more awards can be made for that year.
school you attend participates in. Most schools
participate in one or the other, although some
• Submit your FAFSA early so you can be considered for
schools participate in both.
these funds.
It’s possible for you to receive both Direct and
Stafford Loans (Direct and FFEL)
FFEL Loans but you can’t receive the same type
The Maximum Annual Loan Limits Chart—Subsidized and
of Direct or FFEL Loan for the same period of
Unsubsidized Direct and FFEL Stafford Loans on page 11,
enrol ment at the same school. Some schools
shows that your loan limits depend on:
use one loan program for Stafford Loans and
• What year you are in school.
another loan program for PLUS Loans. For
• Whether you are a dependent or independent student.
example, a graduate or professional student
could receive a Direct Stafford Loan and a FFEL
Subsidized Stafford Loan
PLUS Loan for the same period of enrol ment
• Available to students who demonstrate financial need.
at the same school.
• Eligible students can borrow a subsidized Stafford Loan to
cover some or all of their need.
What are the differences in these loan programs?
• For a subsidized loan, the U.S. Department of Education
pays the interest:
The chart on page 9 shows basic loan comparisons. More informa-
tion is provided in this section. The Financial Aid Office at your
4 While you’re in school at least half-time.*
school can explain which programs are available to you.
4 For the first six months after you leave school
How do I apply for a Perkins or Stafford Loan?
(referred to as a “grace period”).
As with al federal student financial aid, you apply for a Perkins
4 During a period of deferment (a postponement of
or Stafford Loan by completing the FAFSA. A separate loan ap-
loan payments).
plication is not required. However, you’ll need to sign a promis-
The amount of your subsidized loan cannot exceed your
sory note,* which is a binding legal contract that says you agree
financial need.
to repay your loan according to the terms of the promissory
note.* Read this note careful y before signing it and save a copy
Unsubsidized Stafford Loan
for your records.
• Does not require students to demonstrate
financial need.
• The U.S. Department of Education does not pay interest
DID YOU KNOW …
A
Y
The value of a postsecondary education as a
on unsubsidized loans.
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credential for future employment and earnings is
expected to rise. About 90 percent of the fastest-
growing jobs in the new knowledge-driven market
Y RECEIVE
economy require some postsecondary education.
APPL
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The Guide 10
A
To determine the amount of your unsubsidized loan,
For an unsubsidized loan:
your school will use this equation:
• You’re responsible for paying the interest that accrues on the
loan from the time the loan is disbursed until it’s paid in ful .
Cost of Attendance*
• You can pay the interest while you’re in school or during a
– Federal Pell Grant (if eligible)
period of deferment or forbearance.
– Subsidized Staff ord Loan amount (if eligible)
– Any other fi nancial aid you receive
• Or, you can al ow the interest to accrue (accumulate) and
have the interest added to the principal* amount of your
= Amount of unsubsidized loan you receive
loan. Th is is cal ed capitalization. If you choose not to pay the
(up to the annual maximum loan amount)
interest as it accrues and al ow it to be capitalized,* this wil
increase the total amount that you have to repay because you
Depending on your fi nancial need, you may receive both
will be charged interest on a higher principal* amount.
subsidized and unsubsidized loans for the same enrol ment
period, but the total amount of these loans may not exceed
the annual loan limit.
Maximum Annual Loan Limits Chart (Aggregate Loan Limits)—Subsidized and Unsubsidized
Direct and FFEL Stafford Loans
Dependent
Year
Independent Undergraduate Student
Graduate and Professional Degree Student
Undergraduate Student
First Year
$3,500
$7,500 — No more than $3,500 of this amount
$20,500 — No more than $8,500 of this amount
may be in subsidized loans.
may be in subsidized loans.
Second Year
$4,500
$8,500 — No more than $4,500 of this amount
may be in subsidized loans.
Third and beyond
$5,500
$10,500 — No more than $5,500 of this amount
(each year)
may be in subsidized loans.
Maximum Total
$23,000
$46,000 — No more than $23,000 of this amount
$138,500 — No more than $65,500 of this amount may be in
Debt from Staf-
may be in subsidized loans.
subsidized loans. The graduate debt limit includes
ford Loans When
Stafford Loans received for undergraduate study.
You Graduate
NOTE: Th e amounts shown in the chart above are the maximum amounts
enrol ed in a program of study that is shorter than an academic year.* Your
that you may borrow for an academic year.* You might receive less than the
school can refuse to certify your loan or can certify a loan for an amount less
maximum if you receive other fi nancial aid that’s used to cover a portion of
than you would otherwise be eligible for if the school documents the reason
your cost of attendance.* Th e maximum amount you may borrow will also
for its action and explains the reason to you in writing. Th e school’s decision
be less in certain situations, such as if you are an undergraduate student
is fi nal and cannot be appealed to the U.S. Department of Education.
Other than interest, are there any fees or charges
How will I be paid?
required to get these loans?
Perkins Loans:
• Federal Perkins Loans—No.
• Your school will either pay you directly (usual y by
• Direct Loans—Yes, for all Direct Subsidized Loans and
check) or credit your account.
Direct Unsubsidized Loans fi rst disbursed on or aft er July
• General y, you’ll receive the loan in at least two
1, 2007 and before July 1, 2008, the loan fee (also cal ed
payments during the academic year.*
origination fee) is 2.5 percent.
A
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Staff ord Loans:
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Th e Direct PLUS loan fee is 4 percent for Direct PLUS
• In general, your school will disburse your loan in at least
Loans made to both parent and graduate and professional
two instal ments—there might be certain exceptions.
degree student borrowers.
• No instal ment will be greater than half the amount
Y RECEIVE
• FFEL Loans—Yes, you may be charged fees comparable to
of your loan.
APPL
the fees charged for Direct Loans. Contact your lender for
more information.
ARE
PREP
*See “Important Terms,” page 36.
The Guide 11
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll fi nd a description of them under “Important Terms,” beginning on page 36.
What You Should Know Before You Apply
• If you’re a first-year undergraduate student and a first-
the PLUS program up to their cost of attendance,* minus other
time borrower, your first disbursement can’t be made un-
financial aid received.
til 30 days after the first day of your enrol ment period.
Unlike parent PLUS applicants, graduate and professional degree
• If you’re a first-time borrower you must complete entrance
student PLUS applicants must file a FAFSA. In addition, gradu-
counseling before you receive your first loan disbursement.
ate and professional degree students must have their annual loan
Student loan money must first be used to pay for your tuition, fees
maximum eligibility under the Stafford Loan program determined
and room and board. If loan funds remain, you’ll receive them by
by the school before they apply for a PLUS Loan.
check or in cash, unless you give the school written permission to
hold the funds until later in the enrol ment period.
How do parents and graduate and professional
degree students apply for a PLUS Loan?
DID YOU KNOW …
Direct PLUS Loan:
Our team is responsible for much more than processing
• The school must participate in the Direct Loan Program.
aid applications and issuing loans. Though these are sig-
• Complete a Direct PLUS Loan application and promissory
nificant responsibilities in their own right, we also work
note* contained in a single form from the financial aid of-
closely with 3,000 or more private lenders that partici-
fice at the school.
pate in our programs and more than 6,000 col eges and
vocational schools that administer our funds. Part of this
FFEL PLUS Loan:
function is oversight: we’re charged with making sure
• The school must participate in the FFEL Loan Program.
that they treat borrowers fairly and ethically.
• Complete a FFEL PLUS Loan application and promissory
note,* available from the school, lender or state guaranty
Can I cancel my student loan if I change my mind,
agency.* After the school completes its portion of the ap-
even if I have signed the promissory note agreeing to
plication, it must be sent to a lender for evaluation.
the terms of the loan?
Although not a requirement if the student will not be receiving
Yes. Before your loan money is disbursed, you may cancel all or
any other federal student aid, parents are encouraged to have their
part of your loan at any time by notifying your school. After your
dependent children submit a FAFSA so their children can receive
loan is disbursed, you may cancel all or part of the loan within
the maximum student financial aid they’re eligible for. Graduate
certain timeframes. Your promissory note* and additional informa-
and professional degree students applying for a PLUS Loan are
tion you receive from your school will explain the procedures
required to submit a FAFSA.
and timeframes for canceling your loan.
What are the eligibility requirements for
PLUS Loans?
DID YOU KNOW …
Financial aid provided by the office of Federal Student
PLUS applicants must meet the general eligibility requirements
Aid is the largest source of postsecondary financial aid
for federal student aid. If a parent is borrowing on behalf of a
in the nation, making up about 70 percent (in dollar
dependent undergraduate student, the student must also meet
value) of all aid granted nationwide.
these general eligibility requirements. For example, the PLUS
applicant and the student must:
PLUS Loans
• be a United States citizen or eligible noncitizen,*
Parents of dependent students and students pursuing a graduate
• not be in default* on a federal student loan, and
or professional degree can borrow from the PLUS Loan program.
• not owe a refund on a federal education grant.
The terms and conditions applicable to parent PLUS Loans (made
to parents of dependent students) also apply to PLUS Loans made Are there any other requirements?
A
Y
to graduate and professional degree students. These terms and
A PLUS Loan applicant must not have an adverse credit history.
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conditions include: a requirement that the applicant not have an
(A credit check will be conducted.) A PLUS Loan applicant who
adverse credit history; a repayment period that begins on the date has an adverse credit history still may be able to receive a loan by
of the last disbursement of the loan; and a fixed interest rate of
documenting existing extenuating circumstances or by obtain-
8.5 percent for FFEL PLUS Loans and 7.9 percent for Direct PLUS ing an endorser who does not have an adverse credit history. An
Y RECEIVE
Loans. As with PLUS Loans made to parent borrowers, eligible
endorser or co-signer is someone who agrees to repay the loan if
APPL
graduate and professional degree students may borrow under
the borrower fails to do so.
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The Guide 12
A
Stafford and PLUS Loan Summary
• Undergraduate and graduate or professional degree students may receive Stafford Loans. Graduate and professional degree
students and parents of dependent undergraduate students may receive PLUS Loans.
• You must be enrolled at least half-time* at an eligible school in a program leading to a degree or certificate.
• Student loans are borrowed money that must be repaid, with interest, just like car loans and mortgages.
• Student loans cannot be canceled because you didn’t get—or didn’t like—the education you paid for with the loans, didn’t
get a job in your field of study or because you’re having financial difficulty.
• Loans are legal obligations, so think about the amount you’ll have to repay before you take out a loan.
• The maximum Stafford Loan amount you can borrow each academic year* depends on your academic level in school and
whether you are a dependent or independent student.
• Students who demonstrate financial need are eligible for a subsidized Stafford Loan to cover some or all of that need.
• For students who are eligible for a subsidized Stafford Loan, the U.S. Department of Education pays the interest while you’re
in school at least half-time,* for the first six months after you leave school (your grace period) and during a deferment (a
postponement of loan payments).
• Unsubsidized Stafford Loans do not require a student to have financial need. The borrower is responsible for paying all
interest on unsubsidized Stafford Loans.
• If you need to find a participating lender, your school has a preferred-lender list. This list is only a starting place when looking
for financing. Check the terms and fine print carefully.
Do we need to find a lender?
• For the address and telephone number of your state guaranty
Direct PLUS Loan—No. The U.S. Department of Education is
agency,* contact the Federal Student Aid Information Center
the lender. Your school assists in administering the Direct Loan
at 1-800-4-FED-AID (1-800-433-3243).
Program by:
How much can a parent or graduate and
• distributing the loan application,
professional degree student borrow under
• processing the loan, and
the PLUS Loan program?
• disbursing the loan funds.
The maximum PLUS Loan amount that a parent or graduate and
FFEL Program—Yes. You will need to find a participating lender. professional degree student can borrow is the student’s cost of
Your school will give you the option of choosing a lender from its
attendance* minus any other financial aid the student receives.
preferred lender list. The preferred lender list is only a starting
place when shopping for financing.
If a parent obtains a PLUS Loan to help pay for a
dependent student’s education, who receives the
• Check the terms and fine print careful y. Not al students can
loan money—the parent or the student?
take advantage of all the benefits lenders advertise. Choose
the loan that offers the best upfront discounts, such as waiv-
• The school wil first apply the PLUS Loan funds to the
ing both origination and default fees, or other immediate
student’s school account to pay for tuition, fees, room and
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discounts. Benefits that are promised several years down the
board and other school charges.
road usual y won’t help you if you consolidate your loans or
• If any loan funds remain, they wil be sent to the parent
get into financial trouble.
borrower, unless the parent authorizes the school to hold
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• Your school or the guaranty agency* that serves your state can
the funds or release them to the student.
help you locate a participating lender.
• Any remaining loan funds must be used for your
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education expenses.
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*See “Important Terms,” page 36.
The Guide 13
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
What You Should Know Before You Apply
Can a borrower cancel a PLUS Loan even after
Corporation for National Service
signing the promissory note and agreeing to the
1201 New York Avenue, NW
terms of the loan?
Washington, DC 20525
Yes. A borrower can cancel a PLUS Loan the same way that a
1-800-942-2677 (TTY Number: 1-800-833-3722)
borrower would cancel a Perkins or Stafford Loan.
www.americorps.org
Other than interest, are there any fees or
Robert C. Byrd Honors Scholarship Program
charges to get a PLUS Loan?
(Byrd Program)
Yes. There is a fee of up to 4 percent of the loan amount.
To receive this scholarship, you must demonstrate out-
standing academic achievement and show promise of contin-
More Federal Student Aid Information
ued academic excellence. For more information, call toll-free
1-800-4-FED-AID (1-800-433-3243) or visit
Most student financial aid comes from the U.S. Department of
www.ed.gov/programs/iduesbyrd/index.html.
Education grant, work-study and loan programs you read about
here. We award almost all aid based on need; your high school
Public libraries and the Internet
grades and class ranking are not considered in this process.
These are excel ent sources of information on state and private
sources of financial aid. When using either source, search using
If you still have questions about federal student aid programs
keywords like “financial aid,” “student aid,” “scholarships,” etc.
after reviewing this publication, you can:
Beware of scams and services that will search for financial aid money
• Go online to our Web site at
for you for a fee. You should not have to pay for this information.
www.FederalStudentAid.ed.gov
This site provides comprehensive, FREE information on the
Businesses and labor organizations
student aid process, and it links to other student aid-related sites.
Many companies, businesses and labor organizations have pro-
• Cal our Federal Student Aid Information Center at:
grams to help employees or members and their families pay the
1-800-4-FED-AID (1-800-433-3243)
cost of postsecondary education. Ask if they have a scholarship
program and about the application process.
Other Financial Aid Sources
Organizations, foundations, etc.
Financial aid office
Foundations, religious organizations, fraternities or sororities
and town or city clubs usual y offer financial aid. Include in your
Talk to the financial aid staff at each school you’re interested in
search community organizations and civic groups such as the
to find out about the school’s financial aid programs and the total
American Legion, YMCA, 4-H Club, Elks, Kiwanis, Jaycees and
cost of attending that school.
the Girl or Boy Scouts. Organizations connected with your field of
State Higher Education Agency
interest can also be helpful. For example, the American Medical
Association and the American Bar Association are good sources
Your state agency can give you important information about state
for students seeking to specialize in medicine and law.
aid—including aid from the Leveraging Educational Assistance
Partnership (LEAP) Program, funded jointly by states and the U.S. U.S. Armed Forces
Department of Education. See the “State Higher Education Agen-
The Armed Forces offer financial aid for service members and
cies” section in this guide for your state contact information.
their families. For more information on recruitment incentives,
AmeriCorps
contact your local military recruiter or visit the U.S. Department
of Defense at www.todaysmilitary.com, click on “What You Get”
This program provides full-time educational awards in return
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and then go to “Col ege Help.”
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for community service work. You can work before, during or
after your postsecondary education, and you can use the funds
U.S. Department of Veterans Affairs
either to pay current educational expenses or to repay federal
If you (or your spouse) are a veteran or you’re the dependent
student loans. For more information, contact:
of a veteran, veterans’ educational benefits may be available.
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Information is available at www.gibill.va.gov or cal
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1-888-GI-BILL-1 (1-888-442-4551).
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The Guide 14
A
Internal Revenue Service (IRS)
How can I tell if these search services are scams?
The IRS offers financial aid to certain taxpayers to help pay
Are there any signs I should look for?
higher education expenses. The IRS offers two federal income
Be careful when searching for information on student financial
tax credits (tax credits offer dol ar-for-dol ar reductions in your
aid. Estimates show that families lose mil ions of dol ars every
final tax liability) for higher education expenses.
year to scholarship fraud. The Col ege Scholarship Fraud Preven-
• The Hope Tax Credit, worth up to $1,650 per student, is
tion Act protects against fraud in student financial assistance.
available for first- and second-year students enrol ed at
The Federal Trade Commission (FTC) cautions students to look
least half-time.*
for these tel tale lines:
• The Lifetime Learning Tax Credit is a tax benefit equal to
• “The scholarship is guaranteed or your money back.”
20 percent of a family’s tuition expenses, up to $10,000, for
• “You can’t get this information anywhere else.”
virtual y any postsecondary education and training. This
applies to undergraduate, graduate and professional degree
• “I just need your credit card or bank account number to
schools and even for less than half-time* study.
hold this scholarship.”
For more information on the Hope and Lifetime Learning tax
• “You’ve been selected by a ‘national foundation’ to receive
credits, and other tax benefits for postsecondary students, go
a scholarship.”
to www.irs.gov. IRS Publication 970, Tax Benefits for Higher
• “You’re a finalist” in a contest you never entered.
Education, which explains these credits and other tax ben-
Make sure the information you receive and offers for assistance
efits, is available online, or call 1-800-829-1040. TTY cal ers
are legitimate. Don’t fall prey to fraud. To file a complaint
should call 1-800-829-4059.
with the FTC, or for free information, call 1-877-FTC-HELP
www.students.gov
(1-877-382-4357). The TTY number is 1-866-653-4261. Or
visit www.ftc.gov/scholarshipscams.
This site provides access to government resources to help
you plan and pay for your education. Besides finding finan-
Identity theft
cial aid information, you can use this Web site to file your
taxes, search for a job and take advantage of other govern-
Besides scholarship scams, you need to be aware of identity theft.
ment services.
What is identity theft?
Identity theft is a widespread and growing national problem for
Remember, you can get FREE help in
everyone. This crime involves the theft of your personal informa-
finding financial aid from the sources
tion such as your name, address, telephone number and Social
we’ve mentioned in this section. You can
Security number. Identity thieves steal your personal information
also check with the col eges or career
and ruin your credit. These thieves often run up thousands of
schools you’ll be applying to. You don’t
dol ars in credit card debt, just to name one problem, and the bil s
have to pay for someone to help you.
are sent to you for payment. Your credit rating can be ruined. Even
though it’s not your fault, you’re the one who has to clean up the
damage, which can take months or even years to correct.
It’s a Jungle Out There … Be Careful
How can this happen?
Scholarship scams
Identity theft occurs when someone inappropriately obtains
personal identifying information about you, such as your Social
What about scholarship search services?
Security number or driver’s license number and uses that infor-
Many private scholarship search services provide sources of
mation to obtain credit cards, loans (including student loans) or
financial assistance. We do not evaluate those services. If you
merchandise and services in your name. Identity thieves usual y
decide to use a search service, check its reputation by contacting
get this information from a personal computer that you used for
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the Better Business Bureau or a state attorney general’s office.
online banking or purchasing transactions. Sometimes just using a
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You can search for scholarships for free on our Web site at
cell phone or using your Social Security number for identification
www.FederalStudentAid.ed.gov.
can leave you at risk. Why? Each of these transactions requires that
you share personal information, such as your name, address and
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phone number and your bank and credit card numbers. Occasion-
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al y, this information fal s into the wrong hands.
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*See “Important Terms,” page 36.
The Guide 15
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
What You Should Know Before You Apply
What happens if someone steals my identity and
• Aft er completing any online application, remember to log
gets a student loan in my name?
off the computer system.
For Staff ord Loans and PLUS Loans, this is considered false
• Review your fi nancial aid award documents and keep track
certifi cation of loan eligibility and the loan might be discharged.
of the amount of student aid applied for and awarded.
How can I avoid identity theft ?
• Keep your Federal Student Aid PIN, your online student
identifi er, in a secure place and never give it to anyone.
• Don’t throw credit card applications you don’t want
into the trash. Cut them into several pieces, or shred
Th ese are just a few steps you can take to protect yourself
them, so no one can retrieve them and apply for credit
from identity theft . For more information, contact the Federal
in your name.
Trade Commission (FTC) at www.consumer.gov/idtheft , or
call 1-877-IDTHEFT (1-877-438-4338).
• Safeguard your Social Security number at all times. You
general y have to provide it to your employer or your bank,
To report identity theft that aff ects your federal student aid,
but if a business wants it, ask why it’s needed and how it wil
call the U.S. Department of Education’s Offi ce of Inspector
be used before you give it out. Th ere probably is no legitimate
General Hotline at 1-800-MISUSED (1-800-647-8733) or
reason for any business to need your Social Security number.
go to www.ed.gov/misused.
Never give it or your driver’s license number to anyone who
cal s you on the phone or contacts you online saying they
DID YOU KNOW …
need this information to verify your identity.
Identity theft is a growing problem. Typical ways a
• Never give personal or fi nancial information over the
student becomes a victim include leaving personal
phone or the Internet unless you initiated the contact.
information lying around the dorm room or failing to
shred credit card offers before throwing them away.
• If you decide to apply for our federal student aid
programs over the Internet, do so at the Department
of Education’s www.fafsa.ed.gov, or through
We at the U.S. Department of Education work hard to ensure
www.FederalStudentAid.ed.gov which are offi cial
that information sent over our Web sites is secure. However,
U.S. government Web sites that are protected from
students should do their part as wel . Make sure you keep your
unauthorized disclosure.
information safe.
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The Guide 16
Notes:
To Do:
Questions:
B
Start Here …
How Do I Apply?
Complete Your FAFSA.
Receive Your SAR.
F or all the acronyms, it’s a pretty straightforward process
if you take the time to see it through. After all, mil ions of
students just like you apply successful y each year. So, go
ahead. Apply. The results may surprise and delight you.
We’ve set everything up so you can apply and check the
progress of your application online. (Although you can
still do it the conventional way if you choose.)
In the case of student loans, there are a few points we
should make up front. One, interest rates are far lower
than those for commercial loans because the federal
government subsidizes them. Repayment terms are
comfortable and in most instances you don’t begin to
repay until you leave school. And if you’re worried
about your credit history disqualifying you—don’t.
The amount of your aid does not depend on your past
history with creditors.
So … you can go for it, or you can hang back. The how-
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to is right here, but you have to supply the drive.
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The Guide 18
B
DID YOU KNOW …
Should I get a PIN if I’m not applying online?
Applying for federal student aid grants, loans
We encourage you to apply online because that process is much faster
and work-study programs is FREE! Why pay a
and easier. The electronic application process has edits built into it that
third party for help with the FAFSA? Help in
completing the FAFSA is available from our
dramatical y reduces the chance for errors. That saves you time and
office for free and there are no fees of any
trouble. But, even if you don’t apply online, you can use a PIN later to:
kind assessed by the government when you
• Look up your processed FAFSA data online.
submit a FAFSA.
• Make online corrections to your
application information.
Getting Your Federal Student Aid PIN
• Complete your subsequent FAFSAs online.
What is a Federal Student Aid PIN
How and when should I get a PIN?
and what is it used for?
You, and your parents if you’re a dependent student, can apply for
a PIN anytime at www.pin.ed.gov.
Your PIN is an electronic access code that serves as your
personal identifier and can be used every year to electroni-
How do I sign my application?
cal y apply for federal student aid and to access
What if I don’t have a PIN?
your U.S. Department of Education records online.
If you’re in FAFSA on the Web, a separate screen wil appear when
Your PIN al ows you to:
you select the option to apply for a PIN. You will be given the option
• “Sign” your application electronical y and
of instantly receiving your PIN online, having it e-mailed to you, or
complete the student aid process completely
having it sent to you via postal mail (7-10 days). If you choose to
online—no paper is involved.
have it displayed on the screen, you can sign your FAFSA right then
and there. If you choose to have your PIN sent by postal mail, you’l
• If you’re a dependent student and one of
need to save your FAFSA on the Web and sign with your PIN when
your parents has a Federal Student Aid PIN,
you receive it. Or, you can print a “signature page” and mail it to the
he or she can sign the application electroni-
address indicated on FAFSA on the Web.
cal y online as wel .
You can also select the option to process the application without a
• Make online corrections to your FAFSA.
signature. If you select this option, you will be mailed a paper SAR*
• Access your Student Aid Report* (SAR).
that you must sign and mail back to us for processing. The process
• “Sign” a master promissory note* for a
can take two or more weeks. This option is not recommended
federal student loan.
because it is the most time-consuming one.
• Access your federal student aid records
Note: Initial y, your PIN can be used only to sign your FAFSA. Your per-
online, including your student loan history
sonal data (Social Security Number, name, and date of birth) must suc-
information on NSLDS.*
cessful y match with the data the Social Security Administration has for
you before your PIN can be used for other federal student aid purposes,
such as signing a promissory note.* After your data successful y matches
DID YOU KNOW …
with the Social Security Administration’s data you can use your PIN at
The Federal Student Aid PIN gives you access
other federal student aid Web sites. Your SAR* will contain a comment
to personal information and therefore should
that lets you know whether your data successful y matched with the
be kept PRIVATE. You should not share your
Social Security Administration’s data or not. If your data does not match
PIN with anyone, even if that person is helping
you fill out the FAFSA. Counselors should not
you will receive a notice with information to help you resolve the issue.
offer to hold onto students’ PINs. If you are
I submitted my FAFSA but did not sign with a PIN.
concerned about forgetting your PIN you should
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go to www.pin.ed.gov and change your PIN
Will I get one automatical y?
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to a number you will remember.
Yes. If you did not apply for a PIN before submitting your FAFSA,
your personal data, such as your Social Security number, name,
and date of birth, will be matched with the Social Security Admin-
Note: If you opted to receive your PIN by e-mail, you should add
istration’s data. If the match is successful, we’ll automatical y send
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FederalStudentAidPIN@cpsemail.ed.gov to your e-mail address
you a PIN.
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book or “safe list” to help avoid delivery problems.
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*See “Important Terms,” page 36.
The Guide 19
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
Start Here ... How Do I Apply?
What if I have questions about the PIN?
you apply before your tax return has been completed, you’l have
Go to www.pin.ed.gov or www.FederalStudentAid.ed.gov
a two-step application process.
Or, call the Federal Student Aid Information Center at
• Step 1—Apply and estimate your tax information on
1-800-4-FED-AID (1-800-433-3243).
your application.
• Step 2—Make corrections later if your estimated income
Can I get a PIN from the Federal Student Aid
or tax information was not accurate.
Information Center?
You cannot receive federal student aid unless all your information
No. You can only apply for a PIN online.
is complete and accurate.
Safeguard Your PIN and Remember It!
Read the FAFSA instructions very careful y. Pay
www.pin.ed.gov
close attention to questions on income because
• Your PIN is used to sign legal y binding
most errors occur in that area.
documents electronical y. It has the same
legal status as a written signature.
Process for new applicants
• Don’t give your PIN to anyone—not even to
someone helping you fill out the FAFSA.
Apply between Jan. 1, 2008, and June 30, 2009. To determine your
eligibility for federal student financial assistance, you need to com-
• Remember your PIN! You’l use this same
plete the FAFSA. Although you might have to complete an addition-
PIN for future online FAFSAs and the
al application in order to be considered for financial aid from your
many different actions regarding your
state or the school you’re interested in attending, most states and
student aid records.
schools use FAFSA information to award nonfederal student aid.
Completing the FAFSA
Can I apply online?
Yes. You can complete the FAFSA online at www.fafsa.ed.gov.
What information do I need to complete
Applying online is faster and easier than the paper FAFSA,
a FAFSA accurately?
although you may still complete and submit the FAFSA in paper
form. A FAFSA on the Web Worksheet is available online at
• Your Social Security number and your parents’ numbers,
www.fafsa.ed.gov or www.FederalStudentAid.ed.gov/pubs for you
if you’re a dependent student.
to print and write down your information prior to completing the
• 2007 W-2 forms and other records of money earned (by
online submission of the FAFSA. You can also obtain printed copies
you and by your parents, if you’re a dependent student).
of the worksheet by cal ing 1-800-4-FED-AID (1-800-433-3243) or
• Your 2007 Federal Income Tax Return (and that of your
through your financial aid office.
spouse, if you’re married).
• Your parents’ 2007 Federal Income Tax Return (if you’re
Applying Online
a dependent student).
• Go online to www.fafsa.ed.gov.
• Any foreign tax return or tax return from Puerto Rico.
• As an alternative, go online to
• Your 2007 untaxed income records—examples include
www.FederalStudentAid.ed.gov and click on the FAFSA
Social Security benefits, welfare benefits such as Tempo-
logo in the left column.
rary Assistance to Needy Families (TANF) and veteran
• If you have created a “MyFSA” account at
benefits.
www.FederalStudentAid.ed.gov, many sections of the
• Your current bank statements, business and investment
FAFSA will automatically be completed for you, saving
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mortgage information; business and farm records; and
time and eliminating mistakes.
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stock, bond and other investment records.
• If you previously completed FAFSA4caster, you may choose
• Your alien registration number (if you are not a U.S.
to have your FAFSA populated with the information you
citizen).
already provided. If you complete FAFSA4caster and need
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to apply for aid right away, just follow the instructions in
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If possible, have the necessary 2007 income tax returns finished
FAFSA4caster and finish the process of applying for aid.
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so you can complete the FAFSA more easily and accurately. If
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The Guide 20
B
Why should I apply online?
Dependency Status
• As you go through the online application process, FAFSA
You’ll need to determine whose information to report on the FAFSA—
on the Web uses skip-logic so only questions that apply to
if you’re an independent student; yours (and, if married, your
your situation appear on your screen. This makes the ap-
spouse’s), if you’re a dependent student; yours and your parents’.
plication process shorter.
When you apply for federal student aid, your answers to questions
• FAFSA on the Web identifies potential errors right away
on the FAFSA determine whether you are considered a dependent or
and prompts you to make on-the-spot corrections.
independent student.
• You get online instructions for each question, and you can
Dependent students must report their parents’ income and
access live online help with a customer service representa-
assets on the FAFSA as well as their own. Federal student aid pro-
tive for free if you have additional questions.
grams are based on the concept that a dependent student’s parents
have the primary responsibility for paying for their child’s education.
• If you are a U.S. citizen, eligible for a Federal Pel Grant,
and within the age range to have graduated from high
school after Jan. 1, 2005, additional screens will appear to
Dependency Status
help determine your eligibility for the ACG.
For the 2008–09 academic year,* you’re an inde-
• By applying online, you can send your application infor-
pendent student IF at least one of the fol owing
mation to up to ten schools (the paper form is limited to
applies to you:
four schools).
• You were born before Jan. 1, 1985.
• Once you submit your application, your information is
• You are or will be enrolled in a master’s
immediately sent to the U.S. Department of Education.
or doctoral degree program (beyond a
You’ll get a confirmation notice right away when you click
bachelor’s degree) at the beginning of the
on “Submit My FAFSA Now.”
2008–09 academic year*.
• Your online application wil be processed quickly, if you
• You’re married on the day you apply (even if
(and your parents, if applicable) provided electronic
you are separated but not divorced).
signatures using the PIN.
• You have children who receive more than half
What if I decide I want a paper FAFSA?
their support from you.
You can get a paper FAFSA—in English or Spanish—
• You have dependents (other than your
from our Federal Student Aid Information Center by cal ing
children or spouse) who live with you and
1-800-4-FED-AID (1-800-433-3243). A PDF of the application is
who receive more than half their support
also available at www.fafsa.ed.gov.
from you at the time you apply and through
June 30, 2009.
Then what should I do?
• Both your parents are deceased, or you are (or
• Complete, sign and mail the FAFSA in the pre-addressed
were until age 18) a ward or dependent of the
envelope or send it to the address indicated in the PDF, if
court.
you printed one. Your FAFSA will be processed in two to
• You are currently serving on active duty in
three weeks. But, before mailing it, you should check to see
the U.S. Armed Forces for purposes other
if your school, or a school that you’re interested in, would
than training.
submit your FAFSA for you electronical y.
• You’re a veteran of the U.S. Armed Forces.
• If you don’t hear anything within three weeks of the date
(A “veteran” includes students who attended a
you submitted your application, check your status through
U.S. service academy and were released under
FAFSA on the Web (www.fafsa.ed.gov). You can also check
a condition other than dishonorable. For more
your status by contacting the Federal Student Aid Infor-
details on who is considered a veteran, see the
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mation Center at 1-800-4-FED-AID (1-800-433-3243).
explanatory notes on the FAFSA.)
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If none of these criteria apply to you, you’re a
No paper or electronic FAFSA will be accepted
dependent student.
prior to Jan. 1, 2008. Any FAFSA received before
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Jan. 1, 2008, will not be processed.
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*See “Important Terms,” page 36.
The Guide 21
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
Start Here ... How Do I Apply?
I am considered a dependent student; however,
Do I report stepparents’ information?
I have no contact with my parents. What do I do
Your stepparent’s financial information is required on the FAFSA:
about reporting my parents’ income?
• If the parent you received financial support from was a
In unusual cases:
single parent who is now married, or
• A financial aid administrator* can determine that a stu-
• If the parent you received financial support from was
dent who doesn’t meet the above criteria should be treated
divorced or widowed but has remarried.
as an independent student.
This does not mean your stepparent is obligated to give financial
• The financial aid administrator* can change your depen-
assistance to you, but his or her income and assets represent
dency status from dependent to independent based on
significant information about the family’s financial resources.
adequate documentation of your special circumstances.
Including this information on the FAFSA helps us form an
• You must provide this documentation to the financial
accurate picture of your family’s total financial strength.
aid office at your school.
Do I need to fill out a FAFSA every year I apply for aid?
• The financial aid administrator* cannot automatical y
Yes. You must reapply for federal student aid every year. If you
change your status simply because you request it.
change schools, your aid doesn’t automatical y transfer with you.
• The decision is based on the financial aid administrator’s*
Remember to check with your new school to find out what you
judgment of the facts of your situation and is final.
need to do to continue receiving financial aid.
• You cannot appeal that decision to us.
For those who applied in 2007–08, there will be fewer questions
Independent students report their own income and assets
to answer for 2008–09 because your FAFSA for the new year
(and those of a spouse, if married).
contains much of the information given in the 2007–08 applica-
tion. Only the information that has changed in the 2007–08 FAFSA
wil have to be updated and a few new questions answered. You
Not living with parents or not being claimed
can complete your FAFSA online at www.fafsa.ed.gov between
by them on tax forms does not determine
Jan. 1, 2008, and June 30, 2009. Remember that states and schools
dependency status for federal student aid.
may have earlier deadlines for nonfederal aid, so it’s important to
check your state or school deadlines. State contact information is
provided at the end of this guide.
If I am a dependent student, whose informa-
tion do I report if my parents are divorced or
To complete your FAFSA for subsequent years:
separated?
• In January 2008, you’l receive notice (by e-mail or regular
mail) reminding you to apply for the 2008–09 award year.
• You report information about the parent you lived with
The 2008–09 award year is July 1, 2008 to June 30, 2009.
for the greater amount of time during the 12 months
preceding the date you file your FAFSA application.
• You wil need your PIN to access your 2008–09 FAFSA on
the Web populated with your data. If you prefer to complete
• If you didn’t live with either parent, or if you lived
a paper application, you will have to provide all your infor-
with each parent an equal amount of time, then use
mation all over again.
information about the parent who provided the greater
amount of financial support during the 12 months
• Review the information on your FAFSA and change or add
prior to the date you file your FAFSA application.
information as needed, sign and submit it.
• If you didn’t receive any parental financial support
• You’l then receive your Student Aid Report* (SAR) contain-
during that time, you must report information about
ing your application results.
the parent who most recently provided the greater
• Review your SAR to make sure al your information is correct.
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amount of parental support.
• Check with your financial aid office, or contact the Federal
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Student Aid Information Center at 1-800-4-FED-AID
(1-800-433-3243) if you have questions about the FAFSA
process for subsequent years.
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The Guide 22
B
What if I need help fil ing out my FAFSA?
The Student Aid Report (SAR) and
• Help text is available and accessible for every question on
Why It’s Important
the FAFSA if you apply online using FAFSA on the Web at
www.fafsa.ed.gov. You can also get free live help online at
Your Student Aid Report* (SAR) summarizes all the informa-
this Web site.
tion you provided on your FAFSA. Your SAR will usual y contain
your Expected Family Contribution* (EFC), the number used in
• Free help is also available online at
determining your eligibility for federal student aid. Your EFC will
www.FederalStudentAid.ed.gov/completefafsa.
appear in the upper right-hand portion of a paper SAR or an
• Contact the Federal Student Aid Information Center
electronic SAR. You might not get an EFC if we need more
1-800-4-FED-AID (1-800-433-3243) for assistance with any information from you to process your data. If you applied for a
questions you have on either the paper or electronic FAFSA.
PIN during the FAFSA on the Web signature process, you’ll
receive information about the status of your PIN.
• Contact your high school guidance counselor or your col-
lege financial aid office.
After you apply for federal student aid you’ll
receive your FAFSA results in your SAR:
Remember, you can get all the help you need
• You wil receive your SAR by e-mail 3-5 days after your
for FREE from one of these sources. NEVER
FAFSA has been processed, if you provided an e-mail
pay anyone for assistance in completing the
address when you applied. This e-mail will contain a secure
online or paper FAFSA.
link so you can access your SAR online. If you have a “junk”
folder or “spam” folder in your e-mail files, check it. The
e-mail from us might be delivered there instead of your
How do the schools I’m interested in attending
inbox. We encourage you to add our e-mail address,
get my FAFSA information?
FederalStudentAidFAFSA@cpsemail.ed.gov, to your
You can list up to four schools on a paper FAFSA and up to ten
e-mail address book to help avoid delivery problems.
schools on FAFSA on the Web. Those schools wil automatical y
• You wil receive a paper SAR by mail in 7-10 days after your
receive your FAFSA results electronical y.
FAFSA has been processed, if you do not provide an e-mail
address when you apply. Whether you apply online or by
What if I want to add or change schools later?
paper, we wil automatical y send your data electronical y to the
Using your PIN, you can go to www.fafsa.ed.gov and select
schools you listed on your FAFSA.
“Add or Delete a School Code” to make changes online or
If you applied using a paper FAFSA, there are additional steps you
you can call the Federal Student Aid Information Center
need to take to ensure you’re considered for the ACG (see page 6). If
1-800-4-FED-AID (1-800-433-3243). If you cal , you’ll
you’re a U.S. citizen, eligible for a Federal Pell Grant, and within the
need your Data Release Number (DRN), which is located
age range to have graduated from high school after Jan. 1, 2005,
on your SAR.
additional questions will be asked during the online application
process. The paper FAFSA does not contain these questions. Ap-
Save al records and materials used to
plicants who file the paper FAFSA, are U.S. citizens, eligible for a
complete your FAFSA. Make a copy of your
Federal Pell Grant and within the age range to have graduated from
paper FAFSA or print a copy of your FAFSA
high school after Jan. 1, 2005 will receive information on their SAR
on the Web. You might need them later to
explaining what to do. Please read the instructions careful y.
prove the information you reported was
accurate.
What do I do with my SAR?
Review it carefully to make sure it’s correct and complete. The
The process of documenting the information you
school(s) you’ve selected to receive your SAR will use this infor-
provided on the FAFSA is cal ed verification. If
mation to determine if you’re eligible for federal—and possibly
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your application is selected for verification and
nonfederal—financial aid funds.
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you do not provide the documents requested by
your school, you will not receive federal student
If you need to make corrections to your SAR:
aid and you might not receive aid from other
• You can make them online using your PIN, by going to
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nonfederal sources.
www.fafsa.ed.gov and selecting “Make Corrections to a
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Processed FAFSA.”
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*See “Important Terms,” page 36.
The Guide 23
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
Start Here ... How Do I Apply?
• Your school might be able to make them for you
Once my SAR is accurate and complete, how do I
electronical y (check with your school).
fi nd out if I’m eligible for federal student aid and
• Or, if you received a paper SAR, make any necessary
how much I’ll receive?
corrections on that SAR and mail it to the address on
If you’re eligible for federal student fi nancial aid, the school(s)
the form for processing.
listed on your FAFSA (who have also off ered you admission) will
You can make a few changes to your SAR by cal ing the
send you an award letter.* Th e award letter* tel s you the type of
Federal Student Aid Information Center at 1-800-4-FED-AID
fi nancial aid you are eligible to receive and how much you may
(1-800-433-3243). You must have the Data Release Number
receive. Th is combination of aid is your fi nancial aid package.*
(DRN) located on the SAR available.
Review each award letter* very careful y and compare how much aid
you can receive at each school. Once you accept a school’s award letter,*
sign it and return it to the school for processing.
Here’s what you can change over the phone:
• your mailing or e-mail address,
SAR Submission Deadline
• the names of schools that you want to receive your
If the school you want to attend is not listed on
FAFSA information; and
your SAR, you must add that school to your SAR
• your answer to Question 31 (concerning a drug conviction).
and submit your data to that school for processing
For all other changes, you must correct your SAR using
by the last day of enrol ment in 2008–09 OR by
one of the other options above.
mid-September 2008, whichever comes fi rst. Be
sure you know what the last day of enrol ment
is at the school(s) you want to attend—that date
could be earlier than mid-September.
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The Guide 24
Notes:
To Do:
Questions:
Repaying Your Student Loan
C
Repaying
Your Student Loan
What You Need to Know
as a Borrower
I f you’re a federal student loan recipient, there are two
key points to remember. First, the interest you pay
is lower than commercial rates because the federal
government subsidizes the rate. Second, if you are a
student borrower, you don’t have to begin to repay
your Perkins or Stafford Loans until you leave school
or drop below half-time.*
As generous as these terms are, you shouldn’t
forget that you do have to repay your loan. Failure
to do so could result in your loan(s) being declared
delinquent or in default.* This could have a
negative impact on your financial status and
creditworthiness in the future. This section outlines
repayment requirements and describes the rare
circumstances under which your obligation to repay
can be reduced or forgiven.
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The Guide 26
C
Borrower’s Responsibilities
Continue to pay while waiting for deferment
When you obtain a federal student loan you have certain
or forbearance approval
responsibilities. Here are some important ones:
• If you apply for a deferment or forbearance, you must
continue to make payments until you have been notified
Think about how much you’re borrowing
that your request has been approved.
• Think about what your repayment obligation means before
• If you don’t, you might end up in default.*
you take out a student loan.
• Keep a copy of any request form you submit, and document
• If you don’t repay your student loan on time or according
all contact you have with the holder of your loan.
to the terms in your promissory note,* you could default*
on this legal obligation, which has serious consequences
Notify your lender or loan servicing agency
and will adversely affect your credit rating.
when you …
Signing a promissory note means you
• graduate;
agree to repay the loan
• withdraw from school;
• When you sign a promissory note,* you’re agreeing to
• drop below half-time* status;
repay the loan according to the terms of the note.
• change your name, address or Social Security number†; or
• The note states that except in cases of loan discharge
• transfer to another school.
(cancel ation), you must repay the loan, even if you don’t
complete your education (in some cases, you may not have
† Note: New Social Security numbers are issued only in very rare
to repay a loan if you were unable to complete your educa-
circumstances. See www.ssa.gov/ssnumber/ for rules on changing them.
tion because the school closed).
• Also, you must repay your loan even if you can’t get a job
Remember to keep in touch with your
after you complete the program or you didn’t like the edu-
lender or loan servicing agency.
cation you received.
The U.S. Department of Education does not guarantee the
quality of education you receive or that you will find a job
Receive entrance and exit counseling
in your field of study.
• For Direct or FFEL Stafford Loans, you must complete an
entrance counseling session before you’re given your first
Make payments regardless of receiving
loan disbursement, unless you’ve previously borrowed a
billing notices
Stafford Loan. This session provides you with useful tips
• You must make payments on your loan even if you don’t
and tools to help you develop a budget for managing your
receive a bill or repayment notice.
educational expenses and helps you to understand your
loan responsibilities.
• Bil ing statements (or coupon books) are sent to you as a
convenience. You’re obligated to make payments even if
• For most federal student loans, you must receive exit
you don’t receive any reminders.
counseling before you leave school to make sure you un-
derstand your rights and responsibilities as a borrower. You
• You must also make monthly payments in the ful amount
will receive information about repayment and your loan
required by your repayment plan. Partial payments do not
provider will notify you of the date loan repayment begins
fulfill your obligation to repay your student loan on time.
(usual y six months after you graduate, leave school or drop
below half-time* enrol ment).
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*See “Important Terms,” page 36.
The Guide 27
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
Repaying Your Student Loan
Borrower’s Rights
• Repayment options and advice about debt management
that will help you in making your payments.
What you need to know about your loan
• Notification that you must provide your expected perma-
You have a right to know the details about your loan (depending
nent address and the name and address of your expected
on your loan, some of the fol owing might be included as part
employer.
of your entrance counseling). Below is what you need to know
and must receive from your school, lender or the Direct Loan
• Notification that you must also provide any corrections to
Servicing Center:
your school’s records concerning your name, Social Secu-
rity number, references and driver’s license number (if you
• The ful amount of the loan and the current interest rate.
have one).
• The date you must start repayment.
Grace period
• A complete list of any charges you must pay (loan fees)
and information on how those charges are col ected.
If you are attending school at least half-time,* you have a set
period of time after you graduate, leave school or drop below
• Information about the yearly and total amounts you
half-time* status before you must begin repayment on a Stafford
can borrow.
or Perkins Loan. This period of time is cal ed a grace period.
• Information about the maximum repayment periods and
• You wil receive a grace period before your repayment
the minimum repayment amount.
period begins on a Stafford or Perkins Loan.
• An explanation of default* and its consequences.
• Parents and graduate and professional degree students do
• An explanation of available options for consolidating your
not have a grace period on a PLUS Loan.
loans and a statement that you can prepay your student
• Your grace period wil be six or nine months depending on
loan(s) at any time without a penalty.
the type of loan.
Before you leave school
• If you are in active military duty for more than 30 days,
the grace period will be delayed (for no more than 3 years)
Before you leave school, you will receive the fol owing information
during that time.
about your loan (as part of exit counseling) from your school, lender
or the Direct Loan Servicing Center:
Loan repayment schedule
• A current description of your loans, including average
Your school, lender or the Direct Loan Servicing Center,
anticipated monthly payments.
as appropriate, must give you a loan repayment schedule
that states:
• The amount of your total debt (principal and estimated
interest), your current interest rate and the total interest
• when your first payment is due,
charges on your loan.
• the number and frequency of payments, and
• If you have FFEL Stafford Loans, the name of the lender or
• the amount of each payment.
agency that holds your loans, where to send your payments
and where to write or call if you have questions.
Sale of loan
• If you have Direct Stafford Loans, the address and tele-
If you, or your parents borrow under the FFEL Program, you
phone number of the U.S. Department of Education’s
(or your parents, or graduate and professional degree students
Direct Loan Servicing Center.
for PLUS Loans) must be notified when the loan is sold if the
• An explanation of the fees you might be charged during the
sale results in making payments to a new lender or agency. Both
repayment period, such as late charges and col ection or
the old and new lender must provide this notification. You must
litigation costs if you’re delinquent or in default.*
be given:
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• A reminder of available options for loan consolidation and
• the identity of the new lender or agency holding
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a reminder that you can prepay your loan without penalty
the loan and
at any time.
• the address where you or your parents must send pay-
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• A description of applicable deferment, forbearance and
ments, and the telephone numbers of both the old and new
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discharge (cancel ation) provisions.
lender or agency.
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The Guide 28
C
Loan Repayment
How much wil I have to repay and how often
This section gives you basic information on loan repayment. For more do I make payments?
information, go online to www.FederalStudentAid.ed.gov.
Direct or FFEL Stafford Loan—Usual y, you’ll make monthly
payments. Your repayment amount will depend on:
When do I start paying back my student loans?
• the size of your debt,
• Federal Perkins Loans—The grace period is nine months.
However, if you’re attending less than half-time,* check
• the length of your repayment period, and
with your financial aid office to determine your grace
• the repayment plan you choose.
period. During the grace period, you don’t have to pay any
Direct Stafford Loan:
principal, and you won’t be charged interest.
• You’l make payments to us through our Direct Loan
• Direct or FFEL Stafford Loans—The grace period is six
Servicing Center. Direct Loan borrowers can view and pay
months.
their bil s online using their PIN at: www.dl.ed.gov
4 Subsidized loan—During the grace period, you don’t have
FFEL Stafford Loan:
to pay any principal,* and you won’t be charged interest.
• You’l repay the private lender that made you the loan.
4 Unsubsidized loan—You don’t have to pay any principal,*
but you will be charged interest. Remember, you can either
Federal Perkins Loans:
pay the interest as you go along or it wil be capitalized*
• You’l make monthly payments to the school that loaned
(i.e., added to the principal loan balance) later.
you the money.
Your lender will send you information about repayment, and
• You’l have up to 10 years to repay your loan.
you’ll be notified of the date repayment begins. However, you’re
• Federal Perkins Loans do not have different repayment plans.
responsible for beginning repayment on time, even if you
The chart on page 30 shows typical monthly payments and total
don’t receive this information. Failing to make payments on
interest charges for three different 5 percent Perkins Loan
your loan can lead to default.* Default* occurs when you fail to
amounts over a 10-year period.
meet the terms and conditions of the promissory note,* such
as not making timely payments on the loan.
Do I have repayment options?
How much time do I have to repay my
Yes. Repayment plans offered for Direct Stafford Loans are gener-
al y the same as those offered for FFEL Stafford Loans. However, the
student loans?
Direct Loan program offers an income contingent repayment plan
• Federal Perkins Loans—Up to 10 years.
and the FFEL program offers an income-sensitive repayment plan.
• Direct and FFEL Stafford Loans—Your repayment period
The repayment periods for Stafford Loans vary from 10 to 25 years.
varies from 10 to 25 years, depending on which repayment
When it comes time to repay, you can pick a repayment plan that’s
plan you choose. See more on repayment options later in
best-suited to your financial situation. The fol owing repayment
this section.
plans will be available to Direct and FFEL Stafford Loan borrowers
You’l get more information about repayment choices before you
who started repaying their loans on or after July 1, 2006:
leave school (exit counseling), and later, during your grace period,
• A standard plan with a fixed annual repayment amount
from your loan holder.
paid over a fixed period of time not to exceed 10 years.
When do parents and graduate and professional
• A graduated plan paid over a fixed period of time not to
degree students begin repaying a PLUS Loan?
exceed 10 years. With this plan, your payments start with
a relatively low amount and then increase, general y every
General y, within 60 days after the loan is ful y disbursed (paid out).
two years. For FFEL, the borrower must have more than
There is no grace period for these loans. This means interest starts
$30,000 in outstanding FFEL loans.
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to accrue as soon as the first disbursement is made. Your parents
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and graduate and professional degree students must begin repaying
• An extended plan (for new borrowers on or after October 7,
both principal* and interest while in school. However, a graduate and
1998, with more than $30,000 in outstanding Direct Loan
professional degree student PLUS Loan borrower is eligible for an in-
debt accumulated on or after that date) with a fixed annual
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school deferment while he or she is enrol ed at least half-time.*
or graduated repayment amount to be paid over a period
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not to exceed 25 years. For FFEL Loans, the borrower must
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have more than $30,000 in outstanding loans.
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*See “Important Terms,” page 36.
The Guide 29
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
Repaying Your Student Loan
• A plan that bases the monthly payment amount on how much
money you make, how much you owe and family size. For
Key Facts About Repaying
Direct Staff ord Loans, this plan is cal ed the Income Contin-
Direct and FFEL Staff ord Loans
gent Repayment Plan (Direct PLUS Loans may not be repaid
• If you don’t choose a repayment plan when you
under the Income-Contingent Repayment Plan). For FFEL
fi rst begin repayment, you’ll be placed under the
Staff ord Loans and FFEL PLUS Loans, this plan is cal ed the
Standard Repayment Plan.
Income-Sensitive Repayment Plan. Th e terms under Income
• You can change plans to suit your fi nancial
Contingent and Income-Sensitive Repayments Plans vary.
circumstances.
Visit www.dl.ed.gov for more information for Direct Loan
Income Contingent Repayment Plans or your lender for more
information on FFEL Income-Sensitive Repayment Plans.
For a Perkins Loan, your school is the lender. Your school or its agent
will provide you with the exact repayment amounts. Th e chart below
• For Direct Loans, the U.S. Department of Education may off er
is just an example of what a Perkins Loan repayment plan might be.
alternative repayment plans to a borrower who demonstrates
that other available repayment plans are not adequate and can-
not accommodate the borrower’s exceptional circumstances.
Examples of Typical Perkins Loan Repayments
Total Loan Amount Number of Payments Approximate Monthly Payment Total Interest Charges Total Repaid
$4,000
120
$42.43
$1,091.01
$5,091.01
$5,000
120
$53.03
$1,364.03
$6,364.03
$15,000
120
$159.10
$4,091.73
$19,091.73
You’ll get more information about repayment choices before
Revenue Service (IRS) Publication 970, Tax Benefi ts for Higher
you leave school and, later, from the holder of your loan. You
Education, explains these credits and other tax benefi ts. You can
can also get more detail about repayment plans from our Web site,
get more information online at www.irs.gov or by cal ing the IRS
www.FederalStudentAid.ed.gov. Th e fol owing chart shows repay-
at 1-800-829-1040. TTY cal ers can call 1-800-829-4059.
ment plans for both programs. Th is chart also shows estimated
monthly payments for various loan amounts under each plan.
Th e results in the chart on the next page assume that the student
How do parents or graduate and professional
is making regular monthly payments on any unsubsidized loans
degree students repay their PLUS Loan?
and is not capitalizing the interest while in school. If the interest
is capitalized,* (added to the outstanding principal balance) the
Your parents and graduate and professional degree students
cumulative payments and total interest charges will be higher
have nearly all the repayment options that Direct and FFEL
than shown in the chart.
Staff ord Loan borrowers have. Th e exception is that the Direct
Loan Income Contingent Repayment Plan is not an option for
Direct PLUS Loan borrowers.
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student loans?
Yes. Tax benefi ts are available for certain higher education ex-
penses, including a deduction for student loan interest for certain
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borrowers. Th is benefi t applies to all loans used to pay for post-
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The Guide 30
C
Examples of Typical Direct and FFEL Stafford Loan Repayments
Estimated Monthly Payments and Total Amounts Repaid Under Different Repayment Plans
For Direct Loans Only: Income
Contingentc Income = $25,000
Initial Debt When You
Standard
Extendeda
Graduatedb
Single
Married/HOHd
Enter Repayment
Not to exceed 10 years
Not to exceed 10 years
Per Month
Total Repaid
Per Month
Total Repaid
Per Month
Total Repaid
Per Month
Total Repaid
Per Month
Total Repaid
$3,500
$50
$4,471
$25
$5,157
$27
$6,092
$25
$6,405
$5,000
$58
$6,905
$40
$7,278
$38
$8,703
$36
$9,150
$7,500
$83
$10,357
Not Available
$59
$10,919
$57
$13,055
$54
$13,725
$10,500
$121
$14,500
$83
$15,283
$80
$18,277
$76
$19,215
$15,000
$173
$20,714
$119
$21,834
$114
$26,110
$108
$27,451
$40,000
$460
$55,239
$227
$83,289
$316
$58,229
$253
$72,717
$197
$84,352
Payments are calculated using the fi xed interest rate of 6.8 percent for
Th e amounts were rounded to the nearest dol ar and were calculated based on a
student borrowers for loans made on or aft er July 1, 2006.
25-year repayment plan.
a For a FFEL borrower, the requirement is that the borrower (1) must have had
b Th is is an estimated monthly repayment amount for the fi rst two years of
no outstanding balance on a FFEL Program loan as of October 7, 1998, or on
the term and total loan payment. Th e monthly repayment amount will
the date the borrower obtained a FFEL Program loan on or aft er that date, and
general y increase every two years, based on this plan.
(2) must have more than $30,000 in outstanding FFEL Program loans. For a
c Assumes a 5 percent annual growth (Census Bureau) and amounts were
Direct Loan borrower, the requirement is that the borrower (1) must have had no
calculated using the formula requirements in eff ect during 2006.
outstanding balance on a Direct Loan Program loan as of October 7, 1998, or on
the date the borrower obtained a Direct Loan Program loan on or aft er that date,
d HOH is Head of Household. Assumes a family size of two.
and (2) must have more than $30,000 in outstanding Direct Loan Program loans.
You can also fi nd a repayment calculator at www.FederalStudentAid.ed.gov.
Postponing Loan Repayment
Can parents or graduate and professional
(Deferment and Forbearance)
degree students defer repayment of their PLUS Loan?
Yes, as long as the loan isn’t in default.* General y, the same
Under certain circumstances, you can receive periods of deferment
deferment provisions that apply to Staff ord Loans apply to PLUS
or forbearance that al ow you to postpone loan repayment. Th ese
Loans. Because PLUS Loans are unsubsidized, parents and
periods don’t count toward the length of time you have to repay
graduate and professional degree students will be charged
your loan. You can’t get a deferment or forbearance for a loan that
interest during periods of deferment. If they don’t pay the
is already in default.*
interest as it accrues, it will be capitalized* (added to their
outstanding principal* balance). A parent PLUS loan borrower
What is deferment?
may not receive a deferment based on the dependent student’s
half-time* enrol ment, but graduate and professional PLUS bor-
A deferment is a period of time during which no payments are
rowers may defer repayment while enrol ed at least half-time.*
required and interest does not accrue (accumulate), unless you
have an unsubsidized Staff ord Loan. In that case, you must pay
Is there deferment for active military service?
the interest. To qualify for a deferment, you must meet specifi c
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An active duty military deferment is available for loans fi rst
eligibility requirements.
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disbursed on or aft er July 1, 2001. Th e deferment may not
How do I qualify for a deferment?
exceed three years and is available only for periods when
the borrower is serving on active duty during a war or other
Th e most common loan deferment conditions are enrol ment
military operation, or national emergency or is performing
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in school at least half-time,* inability to fi nd full-time employ-
qualifying National Guard duty under the same circum-
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ment (for up to three years) and economic hardship (for up to
stances. Th erefore, not al active duty military personnel are
E
three years).
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eligible for this deferment.
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*See “Important Terms,” page 36.
The Guide 31
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll fi nd a description of them under “Important Terms,” beginning on page 36.
Repaying Your Student Loan
Documentation for this deferment may include a copy of military or-
ders or a writ en statement from the commanding offi cer or personnel
You MUST continue making payments on your student
offi cer verifying that you are on active duty under these circumstances.
loan until you have been notifi ed that your request
for deferment has been granted. If you don’t, and your
deferment is not approved, you wil become delinquent
Th e Col ege Cost Reduction and Access Act, enacted on Sept. 27,
and may default* on your loan.
2007, makes col ege more aff ordable for many students. For the
latest information, and to see how the new law aff ects deferment
options, visit www.FederalStudentAid.ed.gov, click on
What is forbearance?
“Students, Parents and Counselors.” You’ll fi nd the information
If you temporarily can’t meet your repayment schedule but you’re
you need in the “Announcements” section.
not eligible for a deferment, your lender might grant you forbear-
ance for a limited and specifi c period of time. Forbearance occurs
Th e Loan Deferment Summary Chart below shows Staff ord and
when your lender or loan-servicing agency agrees to either tem-
Perkins Loan deferments for loans disbursed on or aft er July 1,
porarily reduce or postpone your student loan payments. Interest
1993. For information on deferments for loans received before that
continues to accrue (accumulate), however, and you are respon-
date, Direct Staff ord and PLUS Loan borrowers should contact the
sible for paying it, no matter what kind of loan you have.
Direct Loan Servicing Center at 1-800-848-0979. TTY users should General y, your lender can grant forbearance for periods up to
call 1-800-848-0983. Or, go online at www.dl.ed.gov. FFEL Staff ord 12 months at a time, for a maximum of three years. You’ll have
and PLUS Loan borrowers should contact their lender.
to provide documentation to the lender to show why you should be
For more information on deferments, contact your lender or
granted forbearance. Th e lender must send you a notice confi r-
the fi nancial aid offi ce at your school.
ming the terms that were agreed to and record them in your fi le.
Applying for deferment or forbearance
Receiving deferment or forbearance is not automatic.
Loan Deferment Summary Chart
You or your parents must apply for it.
Stafford Loans
Perkins
Direct
FFEL
Loans
• Federal Perkins Loans—Contact the school that made
Deferment Condition
Loansa,b
Loansa,c
your loan or the school’s servicing agent.
At least half-time* study at a postsecondary school
YES
YES
YES
• Direct Loans (includes Direct PLUS Loans)—Contact
Study in an approved graduate fellowship program
or in an approved rehabilitation training program for
YES
YES
YESd
the Direct Loan Servicing Center at: 1-800-848-0979. TTY
the disabled
users should call 1-800-848-0983 or go to: www.dl.ed.gov.
Unable to fi nd full-time employment
Up to
Up to
Up to
3 Years
3 Years
3 Years
• FFEL Loans (includes FFEL PLUS Loans)—Contact the
Economic hardship (includes Peace Corps Service)
Up to
Up to
Up to
lender or agency holding your loan.
3 Years
3 Years
3 Years
Engages in service listed under discharge/cancella-
Regardless of which type of federal student loan you have,
tion conditions
NO
NO
YESd
you must pay the interest that accrues (accumulates) during
Active Military Duty (for loans fi rst disbursed on/after
Up to 3
Up to 3
Up to 3
any period of forbearance.
July 1, 2001; while borrower is on active duty during a
war or other military operation, or national emergency)
Years
Years
Years
Are there circumstances when I must be granted
a For PLUS Loans and unsubsidized Staff ord Loans, only principal* is
a mandatory forbearance?
deferred. Interest continues to accrue.
Yes. Th ere are certain mandatory forbearances. Examples include
b A Direct Loan borrower who had an outstanding balance on a FFEL
borrowers who:
Loan fi rst disbursed before July 1, 1993, when the borrower received his
• are in a medical or dental internship or residency;
or her fi rst Direct Loan, is eligible for additional deferments.
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c Applies to loans fi rst disbursed on or aft er July 1, 1993, to a borrower who has
• have student loan payments that are 20 percent or more of
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no outstanding FFEL or Federal Supplemental Loans for Students (Federal
their monthly income;
SLS) loan on the date he or she signed the promissory note.* (Note that the
Federal SLS Program was repealed beginning with the 1994-95 award year.)
• have payments being made for them by the Department of
Diff erent deferments are available for borrowers with pre-July 1, 1993 loans.
Defense.
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d More information on teaching and other types of service deferments
Contact your lender or loan-servicing agent for more information
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and cancel ations can be found online at www.FederalStudentAid.ed.gov.
on the mandatory forbearance benefi t.
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At the site, click on “Students, Parents and Counselors.”
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The Guide 32
C
Consolidating Your Loans
When can I consolidate my loans?
For both FFEL and Direct Loans you can consolidate:
What is loan consolidation?
Student and parent borrowers can consolidate (combine) multiple
• During your grace period.
federal student loans with various repayment schedules into one
• Once you’ve entered repayment (the day after the end of the
loan: either a FFEL Consolidation Loan or a Direct Consolidation
six-month grace period).
Loan, making a single monthly payment.
• During periods of deferment or forbearance.
With a consolidation loan:
How do I get a consolidation loan and
• Your monthly payment might be lower.
where can I get more information?
• You can take a longer time to repay (up to 30 years) if
• FFEL Consolidation Loan—Contact the consolidation
you’re repaying your consolidation loan under the Stan-
department of a participating lender for an application
dard or Graduated Repayment Plans and your total student
and more information. You may consolidate your loans
loan debt is $60,000 or more. However, the maximum
with any eligible consolidation lender in the FFEL program.
repayment period for a consolidation loan is based on the
total amount of the Consolidation Loan and your other
• Direct Consolidation Loan—Contact the Direct Loan
student loan debt.
Origination Center’s Consolidation Department at
1-800-557-7392, or go to www.loanconsolidation.ed.gov.
• You wil receive a fixed interest rate on your Direct or
TTY users may call 1-800-557-7395.
FFEL Consolidation Loan.
Compare the cost of repaying your unconsolidated loans with
What’s the interest rate on a consolidation loan?
the cost of repaying a consolidation loan. Things to consider are: The interest rate for both Direct and FFEL Consolidation Loans
• Whether you’l lose any borrower benefits if you consoli-
is a fixed rate for the life of the loan. The fixed rate is based on
date, such as interest rate discounts or principal* rebates, as
the weighted average of the interest rates on al of the loans you
these benefits can significantly reduce the cost of repaying
consolidate, rounded up to the nearest one-eighth of 1 percent.
your loans.
The interest rate will never exceed 8.25 percent.
• Whether you might lose some discharge and cancel ation
Are there any disadvantages to getting
benefits if you include a Perkins Loan in your consolida-
a consolidation loan?
tion loan.
Yes, there could be. For example, consolidation may significantly
Careful y review your consolidation options before you apply.
increase the total cost of repaying your loans. Because you may
Talk to the holder of your loan(s) for more information before
have a longer period of time to repay, you’ll pay more interest. You
you consolidate.
might also lose some borrower benefits such as interest discounts
and rebates.
If you’re in default* on a federal student loan, you still might be able
to consolidate if you make satisfactory repayment arrangements on
the defaulted loan or agree to repay the consolidation loan under the
Once made, consolidation loans cannot be
Income-Contingent or Income-Sensitive Repayment Plans, provided
revoked for any reason because the underlying
the defaulted loan is not subject to a judgment or wage garnishment.
loans that were consolidated have been paid off
and no longer exist.
What kinds of loans can be consolidated?
All federal student loans discussed in this guide are eligible for
consolidation, and others can be included. To get a complete list of
your loans that are eligible for consolidation, contact your lender
or the agent servicing your loan(s).
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*See “Important Terms,” page 36.
The Guide 33
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll find a description of them under “Important Terms,” beginning on page 36.
Repaying Your Student Loan
Loan Discharge or Cancellation
Perkins Loan Discharge and
Is it ever possible to have my federal student
Cancellation Summary Chart
loan discharged or canceled?
Cancellation Conditionsa
Amount Forgiven
Yes, but only under rare circumstances. A discharge or
Bankruptcy (in rare cases—cancellation is possible only if
cancel ation releases you from all obligation to repay the loan.
the bankruptcy court rules that repayment would cause
100 percent
undue hardship)
Closed school (before student could complete program of study)—
100 percent
Your loan (Staff ord and PLUS) cannot be
applies to loans received on or after Jan. 1, 1986
discharged or canceled because you didn’t:
Borrower’s total and permanent disability or deathb
100 percent
Ful -time teacher in a designated elementary or secondary
• Complete the program of study at the school
school serving students from low-income familiesc
Up to 100 percent
(unless you could not complete the program
Full-time special education teacher (includes teaching
because the school closed),
children with disabilities in a public or other nonprofi t
Up to 100 percent
elementary or secondary school)c
• like the school or program of study, or
Full-time qualifi ed professional provider of early intervention
Up to 100 percent
• obtain employment aft er completing the
services for the disabled
program of study.
Full-time teacher of math, science, foreign languages, bilingual
Up to 100 percent
education, or other fi elds designated as teacher shortage areas
Full-time employee of a public or nonprofi t child- or family-
What qualifi es my loan for discharge?
services agency providing services to high-risk children and their Up to 100 percent
families from low-income communities
Discharge refers to the cancel ation of a loan, even one in
Full-time nurse or medical technician
Up to 100 percent
default,* due to school closure, false certifi cation, your death
Full-time law enforcement or corrections offi cer
Up to 100 percent
or total and permanent disability.
Ful -time staff member in the education component of a Head
Up to 100 percent
Start Program
What qualifi es my loan for cancellation?
Vista or Peace Corps volunteer
Up to 70 percent
Cancel ation or sometimes “forgiveness” of a loan is based on the
Up to 50 percent in areas of
Service in the U.S. Armed Forces
hostilities or imminent danger
borrower performing certain types of service such as teaching in
a low-income school. A defaulted* loan cannot be canceled based
a As of Oct. 7, 1998, all Perkins Loan borrowers are eligible for all cancel ation
on qualifying service (e.g. teaching).
benefi ts regardless of when the loan was made or the terms of the borrower’s
promissory note.* However, this benefi t is not retroactive to services performed
For a complete list of discharge and cancel ation provisions for Perkins
before Oct. 7, 1998.
Loans and Staff ord Loans, check the fol owing two charts: Perkins
b Total and permanent disability is defi ned as the inability to work and earn
Loan Discharge and Cancel ation Summary (this page) and Staff ord
money because of an il ness or injury that is expected to continue indefi nitely
and PLUS Loan Discharge and Cancel ation Summary (page 35).
or to result in death. If you are determined to be total y and permanently
disabled based on a physician’s certifi cation, your loan wil be conditional y
How do I fi nd out if I can get a discharge
discharged for up to three years. Th is conditional discharge period begins on
or cancellation?
the date you became total y and permanently disabled, as certifi ed by your
physician. During this conditional discharge period, you do not have to make
Aft er reviewing the conditions, if you think you qualify, you must
payments on your loan(s). To qualify for a fi nal discharge due to total and
apply to the holder of your loan.
permanent disability, you must meet the fol owing requirements during the
conditional discharge period: (1) your earnings from employment must not
• Federal Perkins Loans—Check with the school that made
exceed the poverty line amount for a family of two; and (2) you must not
you the loan or with the school’s loan servicing agent.
receive any additional loans under the FFEL, Direct Loan or Perkins Loan
• Direct Staff ord Loans—Contact the Direct Loan Servicing
programs. If you do not continue to meet these requirements at any time dur-
Center at 1-800-848-0979. TTY users can call
ing or at the end of the conditional discharge period, your loan(s) wil be taken
out of conditional discharge status and you must resume making payments
1-800-848-0983. Or, go to www.dl.ed.gov.
on your loans. You cannot qualify for loan discharge based on a condition that
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existed before the loan was made, unless a doctor certifi es that your condition
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• FFEL Staff ord Loans—Contact your lender or its loan
servicing agent.
substantial y deteriorated aft er you obtained the loan. For more information
on qualifying for this discharge, review your promissory note* and Borrower’s
Rights and Responsibilities Statement or contact your loan holder.
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c Detailed information on teaching service cancel ation/deferment options
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can be found at www.FederalStudentAid.ed.gov. At the site, click on
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“Students, Parents and Counselors.”
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The Guide 34
C
Stafford and PLUS Loan Discharge
and Cancellation Summary Chart
Discharge/
Amount
Notes
Forgiveness
Discharged/
Condition
Forgiven
Borrower’s total
100 percent
For a PLUS Loan, includes the death,
and permanent
but not disability, of the student for
disability or death.†
whom the parents borrowed.
Ful -time
Up to $5,000 (up to $17,500 For Direct and FFEL Stafford Loan bor-
teacher for fi ve
for teachers in certain
rowers with no outstanding balance
consecutive years
specialties) of the total loan
on a Direct or FFEL Loan on the date
in a designated
amount outstanding after
they received a loan. PLUS Loans are
elementary or
completion of the fi fth year
not eligible. At least one of the fi ve
secondary school
of teaching.
consecutive years of teaching must oc-
serving students
Under the Direct and FFEL
cur after the 1997-98 academic year.*
from low-income
Consolidation Loan pro-
To fi nd out whether your school is
families. Must meet
grams, only the portion of
considered a low-income school, go to
additional eligibility
the consolidation loan used
www.FederalStudentAid.ed.gov.
requirements.
to repay eligible Direct Loans Click on “Students, Parents and Coun-
or FFEL Loans qualifi es for
selors,” or call
loan forgiveness.
1-800-4-FED-AID (1-800-433-3243).
Bankruptcy
100 percent
Cancel ation is possible only if the
(in rare cases).
bankruptcy court rules that repayment
would cause undue hardship.
Closed school (be-
100 percent
For loans received on or after
fore student could
January 1, 1986.
complete program
of study) or false
loan certifi cation.
False loan certifi ca-
100 percent
Effective July 1, 2006.
tion now includes
identity theft.
School does not
Up to the amount that
For loans received on or after
make required
the school was required
January 1, 1986.
return of loan funds to return.
to the lender.
† Total and permanent disability is defi ned as the inability to work and earn
money because of an il ness or injury that is expected to continue indefi nitely
or to result in death. If you are determined to be total y and permanently
disabled based on a physician’s certifi cation, your loan wil be conditional y
discharged for up to three years. Th is conditional discharge period begins on
the date you became total y and permanently disabled, as certifi ed by your
physician. During this conditional discharge period, you do not have to make
payments on your loan(s). To qualify for a fi nal discharge due to total and
permanent disability, you must meet the fol owing requirements during the
conditional discharge period: (1) your earnings from employment must not
exceed the poverty line amount for a family of two; and (2) you must not
receive any additional loans under the FFEL, Direct Loan or Perkins Loan
programs. If you do not continue to meet these requirements at any time dur-
ing or at the end of the conditional discharge period, your loan(s) wil be taken
out of conditional discharge status and you must resume making payments
on your loans. You cannot qualify for loan discharge based on a condition that
existed before the loan was made, unless a doctor certifi es that your condition
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substantial y deteriorated aft er you obtained the loan. For more information
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on qualifying for this discharge, review your promissory note* and Borrower’s
Rights and Responsibilities Statement or contact your loan holder.
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*See “Important Terms,” page 36.
The Guide 35
Financial aid terms frequently used in this publication will appear with an asterisk.
You’ll fi nd a description of them under “Important Terms,” beginning on page 36.
Repaying Your Student Loan
Important Terms
Ability-to-Benefit
One of the criteria used to establish student eligibility in order to receive Title IV
program assistance is that a student must have earned a high school diploma or its
equivalent. Students who are not high school graduates (or who have not earned a
General Educational Development [GED] Certificate*) can demonstrate that they have
the “ability to benefit” from the education or training being offered by passing an
approved ability-to-benefit (ATB) test.
Academic Year
A period of time schools use to measure a quantity of study. For example, a school’s
academic year may consist of a fall and spring semester during which a full-time
undergraduate student must complete 24 semester hours. Academic years vary from
school to school and even from educational program to educational program at the
same school.
Accreditation
The school must have accreditation from an accrediting body recognized by the U.S.
Department of Education to be eligible to participate in the administration of federal
student aid programs. Accreditation means that the school meets certain minimum
academic standards, as defined by the accrediting body.
Award Letter
An award letter from a school states the type and amount of financial aid the school is
wil ing to provide if you accept admission and register to take classes at that school.
Capitalized
With certain loans, such as subsidized Direct and FFEL Loans, the U.S. Department of
Education pays the interest that accrues on these loans while the student is enrol ed at
least half-time* and during periods of deferment. However, with subsidized loans in
forbearance, unsubsidized loans or PLUS Loans, the student or the student’s parents
are responsible for paying interest as it accrues on these loans. When the interest is not
paid, it is capitalized or added to the principal* balance, which increases the outstand-
ing principal* amount due on this loan. Interest that is capitalized and, therefore, has
been added to the original amount of the loan subsequently accrues interest, adding an
additional expense to the loan.
Cost of Attendance (COA)
The total amount it will cost you to go to school—usual y expressed as a yearly figure.
It’s determined using rules established by law. The COA includes tuition and fees; on-
campus room and board (or a housing and food al owance for off-campus students);
and al owances for books, supplies, transportation, loan fees, and, if applicable, depen-
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dent care. It also includes miscel aneous and personal expenses, including an al owance
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for the rental or purchase of a personal computer. Costs related to a disability are also
covered. The COA includes reasonable costs for eligible study-abroad programs as wel .
For students attending less than half-time,* the COA includes tuition and fees and an
al owance for books, supplies, transportation and dependent care expenses; and can
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also include room and board for up to three semesters or the equivalent at the institu-
tion. But no more than two of those semesters, or the equivalent, may be consecutive.
APPL
Talk to the financial aid administrator at the school you’re planning to attend if you
E
have any unusual expenses that might affect your cost of attendance.
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The Guide 36
Default
• If you’re enrol ed at least half-time* in a program to obtain a professional
Failure to repay a loan according to the terms agreed to when you signed a promis-
credential or certification required by a state for employment as an elemen-
sory note.* For the FFEL and Direct Loan programs, default is more specific—it
tary or secondary school teacher, you can get a Federal Perkins Loan, Federal
occurs if you fail to make a payment for 270 days if you repay monthly (or 330 days
Work-Study, a Stafford Loan, or your parents can get a PLUS Loan, while
if your payments are due less frequently). The consequences of default are severe.
you’re enrol ed in that program.
Your school, the lender or agency that holds your loan, the state and the federal
government may al take action to recover the money, including notifying national
Expected Family Contribution
credit bureaus of your default. This may affect your credit rating for as long as seven
Your Expected Family Contribution (EFC) is the number that’s used to determine
years. For example, you might find it difficult to borrow money from a bank to buy
your eligibility for federal student financial aid. This number results from the financial
a car or a house. In addition, the Internal Revenue Service can withhold your U.S.
information you provided in your FAFSA application. Your EFC is reported to you on
individual income tax refund and apply it to the amount you owe, or the agency
your Student Aid Report* (SAR).
holding your loan might ask your employer to deduct payments from your paycheck.
Also, you may be liable for loan col ection expenses. If you return to school, you’re
Financial Aid Administrator (FAA)
not entitled to receive additional federal student financial aid. Legal action also
An individual who works at a col ege or career school and is responsible for preparing
might be taken against you. In many cases, default can be avoided by submitting a
and communicating information on student loans, grants or scholarships and employ-
request for a deferment, forbearance, discharge or cancel ation and by providing the
ment programs. The FAA and staff help students apply for and receive student aid. The
required documentation.
FAA is also capable of analyzing student needs and making professional judgment
changes when necessary.
Eligible Noncitizen
You must be one of the fol owing to receive federal student aid:
Financial Aid Package
• U.S. citizen
The total amount of financial aid (federal and nonfederal) a student is offered by
• U.S. national (includes natives of American Samoa or Swain’s Island)
the school. The financial aid administrator* at a postsecondary institution combines
various forms of aid into a “package” to help meet a student’s education costs. Using
• U.S. permanent resident who has an I-151, I-551, or I-551C (Permanent
available resources to give each student the best possible package of aid is one of the
Resident Card)
aid administrator’s major responsibilities. Because funds are often limited, an aid
If you’re not in one of these categories, you must have an Arrival-Departure Record
package might fall short of the amount a student needs to cover the full cost of
(I-94) from U.S. Citizenship and Immigration Services (USCIS) showing one of the
attendance.* Also, the amount of federal student aid in a package is affected by other
fol owing designations:
sources of aid received (scholarships, state aid, etc.).
• “Refugee”
• “Asylum Granted”
General Educational Development (GED) Certificate
This is a certificate students receive if they’ve passed a specific, approved high school
• “Cuban-Haitian Entrant, Status Pending”
equivalency test. Students who have a GED may still qualify for federal student aid. A
• “Conditional Entrant” (valid only if issued before April 1, 1980)
school that admits students without a high school diploma must make available a GED
• Victims of human trafficking, T-visa (T-2, T-3, or T-4, etc.) holder
program in the vicinity of the school and must inform students about the program.
• “Parolee” (You must be paroled into the United States for at least one year
and you must be able to provide evidence from the USCIS that you are in
Guaranty Agency
the United States for other than a temporary purpose and that you intend to
The guaranty agency is an organization that administers the Federal Family Education Loan
become a U.S. citizen or permanent resident.)
(FFEL) Program in your state. This agency can give you information on FFEL Loans. For the
name, address and telephone number of the agency serving your state, you can contact the
If you have only a Notice of Approval to Apply for Permanent Residence (I-171 or I-464),
Federal Student Aid Information Center at 1-800-4-FED-AID (1-800-433-3243).
you’re not eligible for federal student financial aid.
If you’re in the United States on certain visas, including an F1 or F2 student visa, or a J1
Half-time
or J2 exchange visitor visa, you’re not eligible for federal student financial aid.
At schools measuring progress in credit hours and semesters, trimesters, or quarters,
Also, people with G series visas (pertaining to international organizations) are not eligible
“half-time” is at least six semester hours or quarter hours per term for an undergradu-
for federal student financial aid. For more information about other types of visas that
ate program. At schools measuring progress by credit hours but not using semesters,
are not acceptable, check with your school’s financial aid office. Citizens and eligible
trimesters or quarters, “half-time” is at least 12 semester hours or 18 quarter hours per
noncitizens may receive loans from the FFEL Program at participating foreign schools.
year. At schools measuring progress by clock hours, “half-time” is at least 12 hours per
Citizens of the Federated States of Micronesia, the Republic of the Marshal Islands, and
week. Note that schools may choose to set higher minimums than these. You must
the Republic of Palau are eligible only for certain types of federal student aid. These
be attending school at least half-time to be eligible for a Stafford Loan. Half-time
applicants should check with their schools’ financial aid office for more information.
enrol ment is not a requirement to receive aid from the Federal Pell Grant, Federal
Supplemental Educational Opportunity Grant, Federal Work-Study and Federal
Perkins Loan programs.
Eligible Program
A program of organized instruction or study that leads to an academic, professional
or vocational degree or certificate, or other recognized educational credential. To
National Student Loan Data System (NSLDS)
receive federal student financial aid, you must be enrol ed in an eligible program,
NSLDS is our database for federal student financial aid where you can find out about
with two exceptions:
the aid you’ve received. If you’ve only just applied for aid, you won’t find any informa-
tion on NSLDS yet. NSLDS receives data from schools, guaranty agencies* and U.S. De-
• If a school has told you that you must take certain course work to qualify for
partment of Education programs. The NSLDS Web site is general y available 24 hours a
admission into one of its eligible programs, you can get a Stafford Loan for
day, seven days a week. By using your PIN, you can get information on federal loan and
up to 12 consecutive months while you’re completing that preparatory course
Pell Grant amounts, outstanding balances, the status of your loans and disbursements
work. You must be enrol ed at least half-time*, and you must meet the usual
made. You can access NSLDS at www.nslds.ed.gov.
federal student financial aid eligibility requirements.
The Guide 37
Important Terms
Principal
The amount of money borrowed by the student. Interest is charged on this amount.
Promissory Note
A promissory note is a binding legal document you sign when you get a student loan.
It lists the conditions under which you’re borrowing and the terms under which you
agree to pay back the loan. It will include information on how interest is calculated
and what deferment and cancel ation provisions are available to the borrower. It’s very
important to read and save this document because you’ll need to refer to it later when
you begin repaying your loan or at other times when you need information about
provisions of the loan, such as deferments or forbearances.
Regular Student
A regular student is one who is enrol ed or accepted for enrol ment at an institution for
the purpose of obtaining a degree, certificate or other recognized education credential
offered by that institution. General y, to receive federal student financial aid from the
programs discussed in this guide, you must be a regular student. There are exceptions
to this requirement for some programs.
Satisfactory Academic Progress
To be eligible to receive federal student financial aid, you must meet and maintain your
school’s standards of satisfactory academic progress toward a degree or certificate offered
by that institution. Check with your school to find out its standards.
Selective Service Registration
If you are a male born on or after Jan. 1, 1960, are at least 18 years old, and are not
currently on active duty in the U.S. Armed Forces, you must register, or arrange to
register, with the Selective Service System to receive federal student aid. (Citizens of the
Federated States of Micronesia, the Republic of the Marshall Islands or the Republic of
Palau are exempt from registering.)
Student Aid Report (SAR)
After you apply for federal student financial aid, you’l get your FAFSA results in an e-mail
report within a few days after your FAFSA has been processed or by mail in a few weeks.
This report is cal ed a Student Aid Report or SAR. Your SAR details al the information
you provided on your FAFSA. If there are no corrections or additional information you
must provide, the SAR wil contain your Expected Family Contribution* (EFC), which
is the number that’s used to determine your eligibility for federal student aid. Whether
you applied online or by paper, we wil automatical y send your data electronical y to the
schools you listed on your FAFSA.
The Guide 38
State Higher Education Agencies
District of Columbia
Maryland
State Education Office (District of Columbia)
Maryland Higher Education Commission
State Higher Education Agencies
Phone: 202-727-6436
Toll-free: 1-800-974-1024
Web site: www.seo.dc.gov
Web site: www.mhec.state.md.us
These agencies provide information on state
education programs, col eges and universities,
Florida
Massachusetts
student aid assistance programs, grants, scholar-
Office of Student Financial Assistance,
Massachusetts Board
ships, continuing education programs and career
Florida Department of Education
of Higher Education
opportunities. For updated information, you can
Toll-free: 1-888-827-2004
Phone: 617-727-9420
search the U.S. Department of Education’s database
Web site: www.floridastudentfinancialaid.org Web site: www.osfa.mass.edu
at: www.ed.gov/Programs/bastmp/SHEA.htm
(The URL is case-sensitive.)
Georgia
Michigan
Georgia Student Finance Commission
Michigan Higher Education
You can contact agencies by cal ing the telephone
Toll-free: 1-800-505-4732
Assistance Authority
numbers or by visiting the Web site listed below.
Web site: www.gsfc.org
Toll-free: 1-800-642-5626, ext. 37054
Web site: www.michigan.gov/mistudentaid
Hawaii
University of Hawaii System
Minnesota
Alabama
Phone: 808-956-8111
Minnesota Office
Alabama Commission
Web site: www.hawaii.edu/academics/
of Higher Education
on Higher Education
admissions/aid.html
Toll-free: 1-800-657-3866
Toll-free: 1-800-960-7773
Web site: www.ohe.state.mn.us
Idaho
Web site: www.ache.state.al.us
Idaho State Board of Education
Mississippi
Alaska
Phone: 208-332-1574
Mississippi Office of
Alaska Commission on
Web site: www.boardofed.idaho.gov/
Student Financial Aid
Postsecondary Education
scholarships
Toll-free: 1-800-327-2980
Toll-free: 1-800-441-2962
Web site: www.ihl.state.ms.us
Illinois
Web site: www.alaskaadvantage.state.ak.us
Il inois Student Assistance Commission
Missouri
Arizona
Toll-free: 1-800-899-4722
Missouri Department
Arizona Commission for
Web site: www.collegezone.com
of Higher Education
Postsecondary Education
Toll-free: 1-800-473-6757
Indiana
Phone: 602-258-2435
Web site: www.dhe.mo.gov
Web site: www.azhighered.org
State Student Assistance Commission
of Indiana
Montana
Arkansas
Toll-free: 1-888-528-4719
Office of the Commissioner
Arkansas Department
Web site: www.in.gov/ssaci
of Higher Education
of Higher Education
Phone: 406-444-6570
Iowa
Toll-free: 1-800-54-STUDY
Web site: www.oche.montana.edu
Web site: www.arkansashighered.com
Iowa Col ege Student Aid Commission
Toll-free: 1-800-383-4222
Nebraska
California
Web site: www.iowacollegeaid.org
Nebraska Coordinating Commission
California Student Aid Commission
for Postsecondary Education
Kansas
Toll-free: 1-888-224-7268
Phone: 402-471-2847
Web site: www.csac.ca.gov
Kansas Board of Regents
Web site: www.ccpe.state.ne.us
Phone: 785-296-3421
Colorado
Web site: www.kansasregents.org
Nevada
Colorado Commission
Nevada Department of Education
Kentucky
on Higher Education
Phone: 775-687-9200
Phone: 303-866-2723
Kentucky Higher Education Assistance Authority
Web site: www.doe.nv.gov
Web site: www.state.co.us/cche
Toll-free: 1-800-928-8926
Web site: www.kheaa.com
New Hampshire
Connecticut
New Hampshire Postsecondary
Louisiana
Connecticut Department
Education Commission
of Higher Education
Louisiana Office of Student
Phone: 603-271-2555
Phone: 860-947-1855
Financial Assistance
Web site: www.state.nh.us/postsecondary
Web site: www.ctdhe.org
Toll-free: 1-800-259-5626
Web site: www.osfa.state.la.us
New Jersey
Delaware
New Jersey Higher Education Student
Maine
Delaware Higher Education Commission
Assistance Authority
Toll-free: 1-800-292-7935
Finance Authority of Maine
Toll-free: 1-800-792-8670
Web site: www.doe.state.de.us/high-ed
Toll-free: 1-800-228-3734
Web site: www.hesaa.org
Web site: www.famemaine.com
The Guide 39
State Higher Education Agencies
New Mexico
South Dakota
U.S. Territories
New Mexico Higher
South Dakota Board of Regents
Education Department
Phone: 605-773-3455
American Samoa
Toll-free: 1-800-279-9777
Web site: www.sdbor.edu
American Samoa Community Col ege
Web site: www.hed.state.nm.us
Phone: 684-699-9155
New York
Tennessee
Web site: www.ascc.as
Tennessee Student
New York State Higher Education
Assistance Corporation
Commonwealth of the
Services Corporation
Toll-free: 1-800-342-1663
Toll-free: 1-888-697-4372
Northern Mariana Islands
Web site: www.state.tn.us/tsac
Web site: www.hesc.org
Northern Marianas Col ege
Financial Aid Office
North Carolina
Texas
Phone: 670-234-5498, ext. 1525
Texas Higher Education
Col ege Foundation
Web site: www.nmcnet.edu
Coordinating Board
of North Carolina
Toll-free: 1-888-311-8881
Toll-free: 1-866-866-2362
Federated States
Web site: www.collegefortexans.com
Web site: www.cfnc.org
of Micronesia
Federated States of Micronesia
North Dakota
Utah
Utah State Board of Regents
Department of Education
North Dakota University System
Toll-free: 1-800-418-8757
Phone: 691-320-2872
Phone: 701-328-4114
Web site: www.utahsbr.edu
Web site: www.literacynet.org/
Web site: www.ndus.edu
micronesia/doe.html
Ohio
Vermont
Guam
Vermont Student
Ohio Board of Regents
University of Guam
Assistance Corporation
Toll-free: 1-888-833-1133
Phone: 671-735-2288
Toll-free: 1-800-642-3177
(for information specifical y
Web site: www.uog.edu
Web site: www.vsac.org
about Ohio programs)
Toll-free: 1-877-428-8246
Virginia
Puerto Rico
(for information about other
Puerto Rico Council on
State Council of Higher
sources of financial aid)
Higher Education
Education for Virginia
Web site: www.regents.state.oh.us/sgs
Phone: 787-724-7100
Toll Free: 1-877-516-0138
Web site: www.ces.gobierno.pr
Oklahoma
Web site: www.schev.edu
Oklahoma State Regents
Washington
Republic of Palau
for Higher Education
Republic of Palau Ministry
Washington State Higher
Toll-free: 1-800-858-1840
of Education
Education Coordinating Board
Web site: www.okhighered.org
Phone: 680-488-2471
Toll-free: 1-888-535-0747
Oregon
Web site: www.hecb.wa.gov
Republic of the
Oregon Student Assistance Commission
West Virginia
Marshall Islands
Phone: 541-687-7400
West Virginia Higher Education
Marshall Islands Scholarship
Toll-free: 1-800-452-8807
Policy Commission
Grant and Loan Board
Web site: www.osac.state.or.us
Toll-free: 1-888-825-5707
Phone: 692-625-3108
Web site: www.rmischolarship.net
Pennsylvania
Web site: www.hepc.wvnet.edu
Pennsylvania Higher Education
Wisconsin
Virgin Islands
Assistance Agency
Wisconsin Higher Educational Aids Board
Virgin Islands Department of Education
Toll-free: 1-800-692-7392
Phone: 608-267-2206
Phone: 340-774-4546
Web site: www.pheaa.org
Web site: www.heab.wisconsin.gov
Web site: www.doe.vi
Rhode Island
Wyoming
Rhode Island Higher
Wyoming Department of Education
Education Assistance Authority
Phone: 307-777-7690
Toll-free: 1-800-922-9855
Web site: www.k12.wy.us
Web site: www.riheaa.org
South Carolina
South Carolina Commission
on Higher Education
Toll-free: 1-877-349-7183
Web site: www.che.sc.gov
The Guide 40
Other Federal Student Aid Publications
You can fi nd these and other publications at www.FederalStudentAid.ed.gov/pubs.
College Preparation Checklist
A year-by-year list of what high school students should do to prepare for college.
Funding Education Beyond High School: Audio Highlights
This resource for the visually impaired describes our federal student aid programs and
is available in CD and online.
Completing the FAFSA
This online resource contains detailed instructions for completing the Free Application
for Federal Student Aid (FAFSA).
Save Your Money, Save Your Identity
Information on how fi nancial aid applicants can avoid fraud and identity theft.
Your Federal Student Loans: Learn the Basics and Manage Your Debt
This publication covers what you should consider when planning on taking out a federal
student loan to help pay for your education beyond high school. Why get a federal
student loan? What types of federal student loans are there? What are nonfederal
(private) loans? When does repayment begin? What happens if I don’t repay?
FAFSA4caster Hall Pass
Information on FAFSA4caster to help you get an early start on the fi nancial aid process.
Stafford Loan Forgiveness Program for Teachers
Describes the eligibility criteria for having a Stafford Loan forgiven for service as a teacher.
Funding Education
Beyond High School
The Guide to Federal Student Aid
2008–09
Document Outline
- What is a Federal Pell Grant?
