How to pay for college with grants

Grants are an excellent way to help pay the rising cost of college education. Simply put, grants are like 'free money' from the school itself or the federal government. Unlike federal or private loans, these grants never need to be repaid making them ideal for any student struggling to finance their higher education. Grants are given based on financial need; meaning that as long as you are accepted into a college; you can get grant money based on your family's income. The lower the family income (called the Expected Family Contribution or EFC by the government) the more likely the student will receive more grants.

The biggest two questions that people ask regarding grants are if grants are the same as scholarships and am I eligible for any grants? Scholarships are considered merit based awards given for academic excellence, sports skill, musical talent, or another area that a student is skilled in. These awards pay for all or part of the student's tuition; historically speaking most full scholarships are given to talented athletes that commit to play at a big sports school or academic scholars who have impeccable academic records. Of course partial scholarships are often given, every college reviews each student's application and may personally interview them to see what makes them good candidates for potential scholarships. Grants on the other hand are given based purely on financial need; not on the student's achievements or merits.

Determining if a student is eligible for any grants begins with filling out the FAFSA which is a government form that helps the government and the schools that a student is applying for determine eligibility and need for various grants. The form asks for information such as family income, family assets, the schools that the student is applying for (or attending), criminal history, expected graduation date, and so forth. Based on this data the government's system calculates the EFC or Expected Family Contribution and based on that number recommends how much the family should be able to pay. With that data, the school and the government can determine the number of grants given and the amount of each grant.

The most well known grant is the Federal Pell Grant given to any student working on a first undergraduate degree that shows financial need. Schools give a variety of grants ranging from a few hundred a year to thousands of dollars a year; they may have specific names given to them or may just be a dollar amount. In 2007, a few top schools including Harvard and Stanford announced that full paid tuition grants would be given to qualified students whose families made 40k or less a year. This move prompted a huge increase in applications to these schools giving new hope to many bright students who otherwise might not be able to afford these schools or qualify for loans.

For most students, grants will only be a portion of their payment plan for their tuition. Undergraduate students get smaller amounts per year from the government while many Graduate students are eligible for over 23K in federal loans (as of 2008) a year for their further education but generally not eligible for federal grants. Schools typically offer grants for any eligible student who shows financial need but again this amount can vary widely depending on the school, tuition cost, student's financial need, and a look at other sources of tuition money.

Grants are a great way to pay for college without worrying about high interest loans or where money will come from. Keep in mind that they generally only pay a portion of tuition each year, but every bit does count. It all starts by filling out the FAFSA form which can be done (and needs to be done each year) at http://www.fafsa.edu.gov .