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Student Financial Aid Overview

August 22, 2006 on 6:18 pm | In Student Loans |

Most students require financial aid to fund their college education. In recognition of this and to promote education, the federal government created a coordinated effort to provide students with financial assistance through a unified application called Free Application for Federal Student Aid (FAFSA). This application has become the foundation upon which most students are evaluated for federal, state and private financial aid.

Even if you feel you will not be eligible for federal aid, it’s very important to complete this application on a timely basis. Once your college Financial Aid Office receives this, they will be able to produce a financial aid package for you. This aid package clearly states the financial requirements and allows you to plan the sources of funding you will be using for your education.

A financial aid program provides monetary support for aspiring students to help meet the costs of procuring an appropriate college education. The federal and state governments, individual colleges and universities and a variety of other public and private sources provide funding for such programs.

The majority of financial aid programs, particularly public-funded aid, are awarded on the basis of financial need. This is determined on the basis of the FAFSA application data processed through a prescribed federal formula.

There are four fundamental types of financial aid programs available. The first category refers to special grants in which federal financial aid is in a way ‘gifted’ to the student without any obligation for work or repayment. The next type of financial aid is in the form of student loans wherein a loan is provided and there is a fixed time frame for its repayment. The third type of financial aid is scholarships, where financial assistance is gifted to the student for excellence in different fields such as sports, academics and extra curricular activities, with no obligation for repayment. The last involves a work and study structure where students are required to work part time while attending an institution. A combination of the above options may also be used to form a package for providing financial aid.