Paying for College
Financial aid for a college education generally falls into two categories: free money (grants and scholarships), and student loans. Under the grant and scholarship aid process, the money that you receive does not have to be paid back, whereas the student loan process requires that the loan amount be paid back with interest to the lending institution.
Grants
Obtaining a college grant to pay your education is different from a student loan by the simple fact
that you are not required to pay the grant money back. In a sense it's free money. College grants can
come from many different sources, such as the federal and state governments, private institutions,
private individuals, and public and private industry. Grants are awarded based upon a student choosing a
specific career path, achieving a certain academic ranking, having special needs, selecting a particular
college or university, gender, or being a member of a particular minority group.
Federal Government College Grants
Pell Grant
Within the federal grant programs, the Pell Grant, available since 1972, is one of the oldest and leading mechanisms for providing college money to millions of low-income students. The amount of an individual Pell Grant can vary year to year depending upon how the federal government funds the program, but typically ranges from $1,000 to over $5,000, depending upon the financial need and if the student plans on attending a college or university on a full- or part-time basis.
The Academic Competitive Grant (AC) is a federal grant program directed toward first- and second-year college students who have high achievements in academics and leadership. The amount of money available ranges from $750 for first-year students to $1,300 for second-year students. A student receiving a Pell Grant is also eligible for an AC Grant.
The National Science and Mathematics Access to Retain Talent Grant (SMART) provides federal grant
money to third- and fourth-year college students in the areas of science, engineering, mathematics, and
the sciences. An amount of $4,000 is available for both third- and fourth-year students. A student
receiving a Pell Grant can also apply for a SMART Grant.
State Government College Grants
A number of the 50 states and many of the United States territories such as the Virgin Islands, Guam,
Puerto Rico, and American Samoa offer grants for students in many categories, including minority groups
such as Asian-American, African-American, Native American, Hispanic, and for women. Low- income and
disadvantaged students also form a specific category where state government grant money is available.
Students interested in pursuing a specific field of study, such as teaching or medicine, may also
eligible for grant funding.
Minority Group Grants
Minority groups that include students of African-American, Native American and Hispanic decent are
offered college grants from many organizations and in various amounts. The United Negro College Fund
(UNCF) first began providing grants in 1944 and continues to do so today, funding both individual black
college students and the individual black colleges. Hispanic students are eligible for college grants
under such organizations as the Congressional Hispanic Caucus Institute, Hispanic College Fund, and the
Hispanic Nurses Association. Native American students are eligible for grants administered by the U.S.
Bureau of Indian Affairs, Indian Health Services, and the American Indian College Fund. Fortune 500
corporations, such as AT&T, Exxon-Mobile, Coca-Cola, and Wal-Mart, also sponsor minority student
college grants.
Grants for Careers
If you have chosen a specific career, especially one that is in demand such as teaching, engineering, or medicine, there are many career-type grants from the federal government, state governments, colleges and universities, private industry, and organizations. Fortune 500 companies provide millions of dollars in grant money for student careers that cover all aspects of private industry, ranging from engineering, the sciences, the arts, and sports-related studies.
Morris K. Udall and Stewart L. Udall Foundation
In addition to the SMART grant from the federal government, the Morris K. Udall and Stewart L. Udall
Foundation, established in 1992, focuses college grants on environmental careers and Native American
issues with programs that are directly tailored for undergraduate students, and service within the
National Parks systems.
Scholarships
College scholarships are an excellent method to pay your tuition since you are not required to pay
the scholarship money back, in very much the same way as college grants. College scholarships can come from multiple sources,
including the federal government and the individual state governments, private organizations, private
individuals, and public and private industry. The recipients of scholarships are generally based upon a
specific career path, a minority group or gender, and a particular student's special needs.
Federal Government College Scholarships
Management degree college scholarship programs are
numerous and are typically set up within the various branches and departments of the government, such as
the Department of Health and Human Services, the Department of Energy, the Department of Agriculture,
the Department of Education, and the armed forces.
U.S. Department of Health and Human Services
The U.S. Department of Health and Human Services (HRSA) provides federal scholarship programs
directed toward college students who have chosen a career path in the fields of healthcare, medicine,
and social services. The HRSA targets their programs as an encouragement for future physicians, nurses,
and social workers to provide their skills in underprivileged locations such as inner cities, rural
countrysides, and Native American reservations.
U.S. Department of Energy
The U.S. Department of Energy promotes scholarships that place an emphasis on college programs
featuring engineering, energy resources, and the sciences. Students who receive scholarships from the
Department of Energy have the opportunity to intern at a number of the federal research lab sites, such
as the Sandia National Laboratories, the Los Alamos National Laboratories, Brookhaven National
Laboratory, or the Oak Ridge National Laboratory, to name a few.
U.S. Department of Agriculture
In order to assist minority students, the U.S. Department of Agriculture has initiated the Hispanic-
Serving Institutions National Program to promote Hispanic enrollment in higher education in college
study courses related to issues of agriculture and leadership in the field.
The Harry S Truman Foundation
The Harry S Truman Scholarship Foundation awards money annually to third-year college students who intend to pursue careers in public service. Since 1977, the foundation has promoted the ideals of higher education and public service duties based upon the legacy of President Harry Truman.
State Government College Scholarships
Many state governments offer undergraduate and graduate college scholarships for students of minority groups, women, and low-income and economically disadvantaged students.
Minority Group Scholarships
Minority groups that include students of African-American, Native American and Hispanic descent are
offered
college scholarships from many organizations. The United Negro College Fund (UNCF) provides both
student and black college–supported scholarships. Hispanic students are eligible for college
scholarships through such organizations as the Congressional Hispanic Caucus Institute, Hispanic College
Fund, and the Hispanic Nurses Association. Native American students are eligible for scholarships
administered by the U.S. Bureau of Indian Affairs, Indian Health Services, and the American Indian
College Fund. Fortune 500 corporations such as AT&T, Exxon-Mobile, Coca-Cola, and Wal-Mart also
sponsor minority student college scholarships.
Student Loans
Student loans are the most widely used form of paying for college, but unlike grants and
scholarships, the obligation is there to pay back the loan.
College loans can come from multiple
sources, including the federal government, private organizations, and private institutions. The ability
to obtain a loan is dependent upon several factors, including your income, or your parent's income
(depending on who is taking out the loan), your age, and the means by which the loan will be paid back.
The federal government also provides loan repayment programs, which in effect can cancel the loan debt
or some portion of the debt in exchange for providing your services for a period of time upon
graduation. The student loan mechanism also means that there's no waiting to get that college education;
since you are now in control of the financing, you are not dependent upon another person's decision
whether you should get a grant or a scholarship.
Federal Government College Loans
The federal government is one of the major lenders of college loans, second to the private banking
system. In addition to several major student loan programs underwritten by the federal government such
as the Perkin Loan, the Stafford Loan, and the PLUS loan, individual departments of the government also
provide access to loan repayment programs in exchange for your service of employment. The Department of
Health and Human Services and the Department of Education each offer specialized federal loan repayment
programs. The major advantages of the federal college loan programs are the low interest rates and the
deferment of loan interest payments until graduation, or until the deferment period ends.
Perkins Loan Program
The purpose of the federally funded Perkins Loan Program is to provide low-interest financing to
undergraduate and graduate college or university students. The amount of money that is nominally
received through the Perkins Loan is evaluated from the financial information that you have entered on
the federal application known as the Free Application for Federal Student Aid (FAFSA). Completing this
application also allows you access to many other federally subsidized student loan programs. The Perkins
program offers a repayment option where the federal government will cancel a portion of the loan, or the
full amount of the loan, in exchange for your employment for specific services, such as teaching, health
care, and national defense. Perkins loans are available through both the federal government and private
banking institutions.
Stafford Loan Program
The Stafford Loan Program is another financing program underwritten by the federal government that
provides financing for both undergraduate and graduate students attending college at a minimum of half-
time. The low interest rate program offered by a Stafford Loan also requires the submission of a
completed FAFSA application to determine a student's needs. Stafford Loans are also available through
the federal government and private banking institutions.
PLUS Loan Program
The PLUS Loan Program is part of the Direct Loan programs offered by the federal government and
administered and financed directly by the U.S. Department of Education for both undergraduate and
graduate students. The Direct Loan program is available only from the federal government.
U.S. Department of Health and Human Services
The U.S. Department of Health and Human Services (HRSA) provides a federal loan repayment program
directed toward college students who have chosen a career path in the fields of healthcare, medicine,
and social services. The HRSA specifically targets nursing education by providing 60 percent of a loan
payback program in exchange for registered nurses who work for 2 years at nonprofit health centers and
hospitals.
Private Banking Student Loans
The vast majority of the private banking institutions offer low-interest student loans that are
subsidized by the federal government, such the Perkins Loan and Stafford Loan, or the funding source for
the student loan is the college or university.