According to Education Data Initiative statistics, the average cost of college education has more than doubled in recent years. This means that if you’re thinking about continuing your education, you need to think about how you will pay for your college expenses. Fortunately, there are education grants, but there are some important things that you need to know if you’re graduating this year.
Covering the Costs of a College Education
Unless your parents have been putting money aside for your college education since you were a very small child, or you’ve created an extremely lucrative side hustle, you’re going to need some form of financial aid to cover your educational costs.
Student loans are the most common type of finance and they are available as federal funding or loans from private companies. In either case, you borrow the money you need for your college fees and expenses and you will be expected to repay it with interest. Usually, you can defer starting the repayments until after you graduate and start working, but after this point, you will need to plan the repayments into your monthly expenses.
Another option for educational costs is a scholarship. There are scholarships available based on talent, area of study, academic merit or financial need from both nonprofits and private organizations.
There is also Federal Work Study, which allows you to earn money to cover your school costs with part time work. This is often combined with scholarships, as many recipients only receive partial financial coverage. Federal Work Study programs ensure that students can earn at least the federal minimum wage, but it does mean that you need to juggle your classes, studying and work.
This is where grants are truly appealing. Generally, grants provide financial aid you do not need to repay. Every grant has its own rules and eligibility criteria, so there are some instances where you need to repay the money you received if your educational or financial situation changes.
There are a variety of grants that are currently available for prospective and current college students, but you need to understand the eligibility requirements for specific programs. If you are not eligible for a specific grant, you may waste a significant amount of time and money working through the application process with no avail.
You can find a full list of the current grant programs on the Department of Education website. You’ll find grants for individuals, small businesses and organizations including educational organizations, for profit and nonprofits. For the purposes of this article, we’ll look at individual grants for college students.
Education Grants vs Other Financial Services
| Feature | Education Grants | Scholarships | Student Loans | Work-Study Programs | Personal Savings |
|---|---|---|---|---|---|
| Repayment Required? | No | No | Yes, with interest | No, but work is required | No |
| Based On | Financial need, demographics, or specific criteria | Merit, talent, financial need | Borrower’s creditworthiness and need | Financial need, job availability | Individual savings habits |
| Funding Source | Government, non-profits, institutions | Universities, private donors, corporations | Banks, federal government, private lenders | Government, schools, employers | Personal or family funds |
| Application Process | Requires FAFSA or specific application | Application, essays, recommendation letters | FAFSA for federal loans; credit check for private loans | FAFSA required; may need a job search | No application required |
| Availability | Limited, competitive | Competitive, merit-based | Widely available but with debt implications | Available at participating schools | Depends on personal finances |
| Financial Burden | None, free aid | None, free aid | Debt and interest accrue over time | Requires work hours, but no debt | No debt, but limited funds |
| Best For | Low-income students, those meeting eligibility criteria | High-achieving students, athletes, or those with special talents | Students needing funds but willing to repay later | Students wanting to work while studying | Those with enough savings for tuition |
| Restrictions | Often restricted to tuition, fees, or school-related expenses | May have academic or major requirements | Funds can be used for any educational expenses | Limited work hours, jobs on campus or related to studies | No restrictions |
Popular Federal Education Grants
There are a number of grants that are available for students attending four year colleges, career schools, community colleges and universities.
The Federal Pell Grant
Federal Pell Grants are usually solely awarded to undergrad students who display an exceptional financial need and have not previously earned a bachelor’s graduate or professional degree, but there are some exceptions.
Unlike student loans, recipients of a Federal Pell Grant do not need to repay the funds unless specific circumstances apply. You do need to maintain your eligibility with enrollment in a study course at a non-foreign school and complete your paperwork each year that you remain in school. You can receive up to 12 terms of eligibility until you’ve earned your degree. After the 12 terms, you will no longer receive the grant, even if you have not finished your college education.
The amount of the grant does change each year, but a maximum award cap applies. The amount you would receive if eligible is calculated according to whether you are a full or part time student, if you’re attending the full academic year, the cost of attendance and your Student Aid Index. This is a number calculated according to the information that you provide when you complete and submit your application form.
There are some circumstances where you can receive up to 150 percent of the scheduled award during an award year. For example, if you are eligible for a $2,000 Pell Grant for the current award year and enroll for both spring and fall terms, full time, you would receive $1,000 in spring and $1,000 in fall. But, under certain circumstances, you could receive an additional $1,000 for an additional term during the award year.
You may also receive additional grant funds if you have an active serving US armed forces or public safety officer parent who is killed on duty.
You can only receive this grant for 12 full time terms, as a maximum and as you approach the grant limit, you will start to receive notifications.
The Federal Supplemental Educational Opportunity Grant
The FSEOG is a grant program that is administered directly by financial aid offices from participating schools. Not all schools participate, but if you have exceptional financial need, it is worth checking if your school does.
The amount you receive depends on not only your financial need, but whether you receive other aid, the available funds at your school and even when you apply. Recipients can get a grant of $100 to $4,000 per school year. The reason this can vary greatly is that participating schools each receive funds from the Department of Education Federal Student Aid Office. These funds are allocated and once all of the funds are awarded, there are no more grants available during that year. So, if you are interested in an FSEOG award, you need to apply as early as possible. Each school sets its own deadlines, so you’ll need to find out the application dates from your financial aid office or school administration.
Eligibility for this grant is determined each year and to maintain eligibility, you simply need to continue enrollment as a college student.
The Teacher Education Assistance for College and Higher Education Grant
TEACH grants work a little differently compared to many other federal student grants, as you are required to make an agreement for a teaching service obligation as a condition of the grant funds. If you don’t complete your teaching obligation, the grant converts into a loan, which you must repay with interest.
TEACH grant eligibility includes enrollment in a course at a school that is participating in the program, meeting certain academic achievement requirements and meeting the basic federal student aid eligibility criteria. You also need to undergo TEACH grant counseling, so that you fully understand the service obligation before signing the TEACH agreement to serve or repay.
The TEACH service agreement requires grant recipients to serve as a full time teacher at an educational service agency or school serving low income students, or teach in a high need field for four secondary or elementary school years within eight years of graduating.
The current high need fields include certain subjects.
- Science
- Math
- English language acquisition
- Bilingual education
- Foreign languages
- Reading specialization
- Special education
If you fail to meet these requirements, all of the TEACH grant funds you’ve received will be converted into Direct Unsubsidized Loans. The loans must be repaid in full and interest is charged from the date for each grant disbursement.
You can request a suspension for a temporary period to complete your service obligation, but this will only be approved in specific scenarios. As an example, if you’re called to active duty within the Armed Forces or National Guard, you have a qualifying medical condition or you work or live in a federally declared disaster area. All exceptional circumstances requests are assessed on a case-by-case basis.
Applying for Education Grants
If you are considering educational grants or any type of federal student aid, you can begin the process by completing and submitting the FAFSA or Free Application for Federal Student Aid form. This is available on the Student Aid website or you can seek assistance from the financial aid office at your school who can help you access the form.
FAFSA forms are used by career schools and colleges to not only determine eligibility, but to calculate how much federal funding you could receive. If you want to be considered for federal, state or school financial aid programs including scholarships and grants, you will need to complete this form.
The form is quite detailed and will take approximately one hour to complete. You will need to create a FSA username and password for the Federal Student Aid platform and then provide details of your Social Security Number, contact information, date of birth and income information. You will also need to provide details for your parent or contributor, which may include copies of tax returns, current balances of bank accounts, and records of child support payments.
If you want to continue receiving awards each year, you will need to submit a form each year, and it is sensible to apply as soon as possible. After you complete your form, you will need to acknowledge reading the terms and conditions, and then you can electronically sign the document. After you submit your form, it won’t start to be processed until all of your contributors have provided their required details and consent. This includes approval for the FSA to transfer federal tax information into the form.
After you, your parents and any other contributors have signed and submitted their sections of the form, it will be processed. You will then see a confirmation page that displays a completion date and a data release number. This will also be emailed to you automatically.
You will then be able to log into the FSA website to check the status of your application. After the form is submitted, it will show the status of “in process” before it moves into “in review.” You can watch the status changes, but watch out for “action required.” This status means that you will need to add more details or make a correction. When the application shows “processed,” you need to take no further action.
Ongoing Grant Action
As we’ve just discussed, you will need to submit a new FAFSA form each year that you want to receive a grant award. You also need to remain eligible for your specific grant program. The eligibility requirements vary between programs, so you will need to familiarize yourself with your specific eligibility requirements. This will help you to meet the requirements to maintain eligibility.
For most grant programs, maintaining eligibility is as simple as remaining in your college course and submitting your FAFSA form each year. But, some programs do have more complicated requirements.
When You May Need to Repay Your Grant
If you don’t meet the eligibility requirements or fail to adhere to the grant program terms, you may be required to repay the funds you’ve received. Examples of circumstances when you may need to repay all or part of the grant funds include certain situations.
- Early Withdrawal: If you withdraw early from the program that is related to the grant you’ve received.
- Changes in Enrollment Status: If your enrollment status has changed in such a way that it reduces your eligibility. For example, if you switch from being a full time to part time student, the amount of your grant award may be reduced.
- Outside Financial Aid: If you receive other grants or scholarships that reduce your federal aid need, you may need to repay some or all of the grant funds.
- Multiple Grants: This follows on from the previous point, but if you receive multiple grants from different schools, you may invalidate your grant eligibility. For example, you may only receive one Federal Pell Grant from one school at a time.
- Failure to Meet the TEACH Service Requirements:If you receive a TEACH grant but don’t meet the service obligation, you will be required to repay the grant in full.
If you are obliged to repay all or part of your grant award, you will receive a notification from your financial aid office or school administration. From this notification, you will have 45 days to repay the amount in full or arrange a repayment schedule. In most cases, there is a substantial degree of flexibility. You can negotiate an arrangement that will fit with your current budget and financial circumstances.
If you arrange a satisfactory repayment schedule, your school may retain the debt to allow direct repayments to the school or could assign the debt to the Department of Education to manage collection.
If you don’t adhere to one of these options, you will lose your eligibility for further federal student aid.
Other Important Things to Note
Negotiating the application, eligibility and maintenance for education grants can seem daunting, but it is crucial that you fully understand federal student grants are not just free money. To continue receiving student financial aid you will need to apply and reapply on time, meeting any of the program deadlines. You are obliged to provide accurate, correct information and supply the proper documentation to support the application including financial documents and tax returns. If there are any changes in your enrollment status, you need to share them with the appropriate authorities and you must comply with any agreements you’ve signed as part of the grant program.
Remember that when you apply for a federal student grant, it is a serious thing, and there are consequences for deliberately misrepresenting your personal details or financial information. Providing false information is considered fraud and not only can you invalidate your eligibility, but the school and/or federal government could seek redress.
As the costs of getting a college education continue to increase, the prospect of paying for your college education can feel overwhelming. But there are numerous options to help reduce the costs of tuition and your other college expenses. Many grants are designed to supplement your education finance plans, so you may need to combine various funding options, such as combining your grant with a scholarship and a student loan.
This can make it complicated, but your school’s student aid advisor is usually available to help you and discuss your specific situation. You can also obtain further guidance from the Department of Education website.
Getting a grant can seem like a complicated and long winded process, but once you secure an award, provided that you maintain your eligibility, you won’t need to think about it for the rest of the school year. So, it is a good idea to take your time and start the process as quickly as possible. This will help you to coordinate your accurate information and all your supporting documents to avoid issues when processing your application. Remember that once you submit your application, you can log into the FSA website to check the status of your application and take note of any action you need to take quickly.
By submitting further information or correcting any errors quickly, you can ensure that your application is complete before the deadlines, so you can qualify for funds for the next school year. So, if you’re considering education grants to continue your studies, be sure to explore your options as early as possible.
