Money for School: Federal Student Aid

The federal government offers several Student Financial Aid Programs. These programs offer you low interest loans and grants (free money) for school.

Unlike the GI Bill, these programs are paid by the Dept. of Education through the school. Federal Student Aid is designed to assist you in meeting the cost of tuition, books, fees, and living expenses while you go to school.

That means that once the school has taken its share, the remaining loan or grant balance goes to you.

Financial Student Aid Eligibility

It doesn’t matter whether you are active duty, reserve, veteran, retiree, on GI Bill, or not — you should be taking advantage of these programs. There are numerous examples of even senior active duty members receiving federal loans and large grants.

Remember: Grants are gifts that you don’t repay!

Eligibility for most federal student aid is based on financial need and on several other factors. The most basic eligibility requirements to receive federal student aid are as follows:

  • You must be a U.S. citizen or an eligible non-citizen,
  • You must maintain satisfactory academic progress (defined as having at least a 2.0 GPA and being on track to graduate within 150% of the normal timeframe) in college or career school, and

Applying for FSA

You can complete the Free Application for Federal Student Aid (FAFSA) on the FAFSA website.

Money Saving Tip: FAFSA is a Free Application for Federal Student Aid; however there are some websites that offer to complete the FAFSA for you, for upwards of $50. The FAFSA form only takes a relatively short time to complete. It is worth your time to complete it yourself.

Every accredited school that is recognized by the Education Department will be eligible for some form of FSA. The schools you select will send you information on how to get the funding you need to reach your education goals.

Interest Rate Cap for Military Members

If you qualify under the Servicemembers Civil Relief Act, the interest rate on loans you had before entering military service may be capped at 6% during your military service. You must contact your loan servicer to request this benefit.

Grants

Grants are free money for school paid to you through the school’s business office. After your school bills are paid, the remaining balance goes to you. There are several types of grants.

Pell Grants

You must be an undergraduate student who doesn’t have a bachelor or professional degree. If you are enrolled in a postbaccalaureate teaching certificate program, you also may receive a Pell Grant. Depending on your financial need and tuition costs, you can receive up to $6,195 each school year.

FSEOG

FSEOG is short for Federal Supplemental Educational Opportunity Grants. These grants are reserved for the most needy candidates, and can be paid in addition to Pell grants. FSEO Grants are limited from $100 to $4,000 each year.

TEACH Grants

The Teacher Education Assistance for College and Higher Education (TEACH) Grant Program provides grants of up to $4,000 a year to students who are completing or plan to complete course work needed to begin a career in teaching.

As a condition for receiving a TEACH Grant, you must sign a TEACH Grant Agreement to Serve in which you agree to (among other requirements) teach

  • in a high-need field
  • at an elementary school, secondary school, or educational service agency that serves students from low-income families
  • for at least four complete academic years within eight years after completing (or ceasing enrollment in) the course of study for which you received the grant.

IMPORTANT: If you do not complete your service obligation, all TEACH Grant funds you received will be converted to a Direct Unsubsidized Loan. You must then repay this loan to the U.S. Department of Education, with interest charged from the date the TEACH Grant was disbursed.

Iraq and Afghanistan Service Grants

You may be eligible to receive the Iraq and Afghanistan Service Grant if

  • you are not eligible for a Federal Pell Grant on the basis of your Expected Family Contribution but meet all other requirements, and
  • your parent or guardian was a military member who died as a result of military service performed in Iraq or Afghanistan after the events of 9/11, and
  • you were under 24 years old or enrolled in college at least part-time at the time of your parent’s or guardian’s death.

Loans

FSA Loans are Financial Aid that is either funded or backed by the federal government, and paid directly through the school. Each type of loan has different fees (a percentage charged up front), interest rates and payment deferment plans.

Direct Loans

There are two different types of Direct Loans, Subsidized and Unsubsidized. These loans are identical in most ways, except how and when you begin to be charged interest.

Subsidized – Direct Subsidized Loans are for students with financial need. Your school will review the results of your Free Application for Federal Student Aid (FAFSA) and determine the amount you can borrow. You aren’t charged interest while you’re in school at least half-time and during grace periods and deferment periods.

Unsubsidized – You aren’t required to demonstrate financial need to receive a Direct Unsubsidized Loan. Like subsidized loans, your school will determine the amount you can borrow. Interest accumulates from the date of issue with no exceptions. You can pay the interest while you are in school and during grace periods and deferment or forbearance periods, or you can allow it to accrue and be capitalized (that is, added to the principal amount of your loan). If you choose not to pay the interest as it accrues, this will increase the total amount you have to repay because you will be charged interest on a higher principal amount.

Help for Military Spouses Going Back to School

A college degree may lead to better job opportunities and better pay. In fact, earning a bachelor’s or graduate degree increases one’s average hourly wage compared to those with only a high school diploma, according to a Rand Corp. survey.

However, going back to school for military spouses is a sizable time commitment and an expensive financial obligation. What’s more, constant relocation may cause a spouse to lose credits if he or she transfers to another college. But there are financial and credit-transfer programs available to spouses to help spouses get an education.

Here are a few programs that offer financial assistance:

  • The Coast Guard Mutual Assistance program (CGMA) offers a supplemental education grant of $150 per year. This grant is applicable to any family member’s educational expenses. However, CGMA does not cover tuition expenses.
  • The General George S. Brown Spouse Tuition Assistance Program (STAP) offers partial tuition assistance (50 percent of course tuition with a maximum of $1,500 per academic year) to spouses of active-duty Air Force members stationed overseas.
  • The General Henry H. Arnold Education Grant Program provides $1,500 in grants to selected children of active duty Air Force members and spouses stationed overseas through the Air Force Aid Society. To qualify, the spouse must be a full- or part-time student studying for a vocational certificate, undergraduate degree or graduate degree. The funds granted range from $1,500 a year for an undergraduate degree to $1,750 a year for a graduate degree.

These programs assist with transferring class credits:

  • The Servicemembers Opportunity Colleges for the navy (SOCNAV) is similar to the SOCAD, but offers associate and bachelor’s degree programs on or accessible to Navy installations.
  • The Servicemembers Opportunity Colleges (SOCAD) program is a consortium of more than 1,500 colleges and universities that offer associate and bachelor’s degree in the United States. This program transfers credits between the colleges allowing the student to continue with his or her education and not retake any classes. SOCAD is ideal for military spouses who might have to relocate several times.

Each program varies from service to service but all provide the proper resources to help military family members obtain a high level of education.