The federal government began offering money to students who demonstrated financial need way back in 1965. That aid comes in three forms - grants, loans, and work-study.

Grants

Federal student aid grants are money given to students to enable them to pursue their post-secondary education or career study programs. Grants do not need to be paid back. This is free money given based on financial need.

So, if you are planning to attend a college or university in the U.S., and you go through the federal application process for student aid, and can demonstrate that you fall into a certain category of need, you will be granted a sum of money to put towards your tuition fees.

There are four categories of grants you might qualify for:

  1. Pell Grants: Directed specifically towards undergraduate students, Pell grants are the most substantial aid the federal government offers.

  2. Federal Supplemental Education Opportunity Grant (FSEOG): It may be a mouthful, but if you demonstrate exceptional need beyond that which qualifies for Pell Grants, you could receive up to $4,000 in additional support a year.

  3. TEACH Grant: The acronym stands for Teacher Education Assistance for College and Higher Education. This grant is aimed at those studying to become teachers. If you receive this grant, you must spend four years within eight years of graduating teaching in a high-need field at the elementary or secondary level, or you have to pay back.

  4. Iraq and Afghanistan Service Grant: It is designed for students who have lost a parent in military service in Iraq or Afghanistan who are ineligible for a Pell Grant.

Loans

If you exceed the maximum income level to qualify you for a grant, you may still qualify to receive a federal student loan. You have to pay it back, however, these loans come at a low and fixed interest rate.

If you qualify, you will receive a Direct Subsidized Loan, which means that the U.S. Department of Education will pay the interest on your loan while you are in school, for six months after you graduate (a grace period), and if you are in a deferment period.

If you don’t qualify for a grant or a subsidized loan based on your income level, you can still access a Federal Direct Unsubsidized Loan, available to any undergraduate or graduate student. The main difference is that you won’t receive the same kind of help from the Department of Education as those who demonstrate financial need will.

You will be responsible for paying the interest on your loan during your schooling and after, and during any deferment you make on the loan, the interest will accrue and be added to the total amount you owe.

Work-study

The final avenue through which the U.S. government might help with your college fees is through the Federal Work-Study program. This program offers part-time jobs while you are enrolled in school, allowing you to earn a wage to cover some of your costs while gaining your education.

This program is available to undergraduate or graduate students, and to full- or part-time students. Your job may be on- or off-campus, for the school, or for a local non-profit, public agency or corporation, and what you earn will depend on your qualifications. You cannot earn more than the amount granted by the Federal work-study program.

FAFSA

FAFSA means the Free Application for Federal Student Aid. To start, you need to create an account with the Federal Student Aid (FSA) site of the Department of Education. Make sure to remember the FSA ID you create or note it down somewhere, as you will need this to continue the application process for aid.

After you start on the FAFSA form, you need access to some basic identification and financial information, and that of your parents if you are a dependent student. Most students are considered dependent, even if their parents are not able to provide financial support to them for their college education. Students who are considered independent are those whose parents are deceased, who have been in foster care since the age of 13, are married, have dependents of their own, or have served in the armed forces. That excludes most undergraduate applicants.

To complete your FAFSA form, you need information like your social security number or alien registration number if you are not a U.S. citizen, as well as financial information for you and your parents, like tax returns, bank statements, and records of non-taxed money.