How to get federal student aid for higher education

The federal government offers a lot of possible aid for students looking for money for college. These include need based grants as well as need based federal loans. This source of college funding is often overlooked by potential college students, but it costs nothing to apply for and with the help of your school, government money is available for your education. The government offers a variety of grants and loans. The grants mostly include need based grants while the loans are a combination of subsidized and unsubsidized loans which generally have lower interest rates then private loans.

The first step to take in order to find out what kind of federal aid you are eligible for is to fill out the Free Application for Federal Student Aid (FAFSA) on the web. This can be found at the following website: http://www.fafsa.ed.gov/ . This free application is used be both your school and the federal government to determine how much financial aid you may need for school. Filling out this application is required yearly but doesn't take more than 30 minutes as long as you have most information on hand such as your income tax form, personal information, and parental information (if you are considered a dependent on their income tax). Once the application is completed, the government along with your school's financial aid office work to put together a financial aid package based on your need. Your income, your parent's income, any assets, expected year in school, and more is considered when putting together this package.

After this is determined you'll receive an offer from your school which may or may not include federal grants and loans. The amount of these may vary based on your eligibility and financial need, but keep in mind that each year or so the government often increases the maximum amount of the grants or loans allowing those who need it most to access more funding. On your financial aid letter (also called award) you'll see any scholarships and grants you are eligible for from the school itself as well as any loans or grants you'll be eligible for from the government.

As far as federal loans go you may see unsubsidized and/or subsidized loans on your letter. The primary difference between the two is that the subsidized loans have their interest paid for your while in school by the government; that is any interest accruing on those loans while in school is paid off for you. Either one is a good option if your grants and other awards still leave you needing money for school as their interest rates are sometimes more than 50% lower than private loan interest rates.

Federal grants generally have more requirements then the loans including requirements on completing a degree within a certain amount of time, age limits, having a degree already, and so forth. These requirements are in place since grants don't need to be repaid. The federal loans generally increase in amount as you move through school, and almost quadruple if you are in graduate school. While they still need to be repaid as loans, again their rates are often far lower than private loans and can be easily consolidated after your schooling if completed.

Accepting some or all of the loan and grant offers usually needs to be done by sending a form back to your school's financial aid office and by electronically signing a promissory note online (saying you'll repay the loans or use the money only for school related expenses) on the site of the company issuing the federal money. The government utilizes loan companies to disburse and manage federal loans and grants, but this information will be given by your school's financial aid office for your financial aid package.

As you can see applying for federal student aid is relatively easy and starts by simply filling out a FAFSA form. Some advantages to federal aid come in the form of lower interest rates, no fees, grants that don't need to be repaid, and loan forgiveness for doing things such as military service or taking a federal job after college. One word of caution though, if you have ever been convicted of a crime, including drug related arrests, can severely limit your eligibility to federal financial aid.

Remember to fill out your FAFSA each year and keep your school's financial aid office updated on your financial status.