What to Know About Grants for College
Grants are one of the most desirable forms of financial aid used to pay for college. Experts say generally the greater a student’s financial need, the more grant aid he or she is likely to receive, but there are some things students can do to maximize the amount of money they are awarded.
Unlike student loans, which must be repaid, or work-study programs, which often require students to work on campus to earn money, grants are a form of financial aid that does not require repayment.
Grants are typically awarded by the federal government, states or colleges, and the amount of aid a student can expect varies widely depending on a number of factors, including the student’s need and the type of institution. Private colleges typically offer more grant funding than public institutions, says James Kaster, director of financial aid at Washington and Lee University in Virginia.
“A lower-income student going to a private school should expect the university to be more expensive, but at the same time, most private schools can also offer more. Lower-income students will sometimes be deterred by the sticker price and they won’t even apply to a college, when a lower-income student really could apply to those colleges and get a $70,000 grant to cover the cost,” Kaster says.
To be eligible for most grants, students must submit the Free Application for Federal Student Aid. The financial need demonstrated through the FAFSA will help determine a student’s eligibility for grant funding.
The FAFSA is available on Oct. 1 each year and the federal deadline is June 30. Experts say the sooner a student submits the FAFSA, the more opportunities for aid he or she will have. States have varying deadlines for FAFSA submission, often earlier than the federal deadline, so students should keep track of these to maximize grant opportunities.
Grants vs. Scholarships
Grants are considered “free money,” similar to scholarships. However, the reason aid is awarded and the source of the aid differ for scholarships. While grant funding is typically need-based, scholarships can be awarded for merit, athletic talent or other student achievements and characteristics.
“Grants are either federal, state or institutional,” says Lori Vedder, director of financial aid at the University of Michigan — Flint. “Scholarships could come from a private source, meaning external from the campus, or the campus very likely has friends or generous donors that have set up scholarships for different criteria — an honors program, for different majors, GPA, need — and the donors are providing those funds.”
Some financial aid officers refer to grants and scholarships interchangeably, because neither have to be repaid, but students should be aware the process of applying for grants and scholarships can vary by school and scholarship.
Scholarships are sometimes considered the more desirable form of financial aid because they may not require the student to reapply annually and are not dependent on his or her continuing financial need. While not all scholarships stay with students for four years, many do.
“I believe merit-based scholarships that renew over a four-year period based on credits taken and GPA requirements are the most desirable forms of aid,” Blaine Blontz, founder and lead consultant of Financial Aid Coach, a consulting company based in Philadelphia, wrote in an email. “Grants tend to refer to need-based awards which are evaluated and can change each and every year a student is in college as they are based on the family’s financial situation. Scholarships, on the other hand, remain the same each year.”
To be considered for both, students should check with the financial aid offices at the individual institutions they are interested in and be aware of the corresponding application deadlines.
Pell Grants
Financial aid officers often begin the process of creating a student’s aid package with the Pell Grant, which can be seen as the foundation of a student’s award.
The Pell Grant is the largest grant program offered by the U.S. Department of Education to undergraduate students. Low-income families can receive these federal grants by filling out the FAFSA, which generates a number signifying the family’s financial strength called the expected family contribution, or EFC.
For the 2019–2020 award year, the maximum Pell Grant award is $6,195 and the minimum is $650. A family with an EFC of zero is likely to receive the maximum Pell Grant award; on the other end of the spectrum, a family with an EFC above 5576 is not eligible for any Pell funding.
The amount of a student’s Pell Grant award depends on the EFC, the institution’s cost of attendance, the student’s status as part time or full time, and his or her planned length of attendance. All eligible students will receive the full amount they qualify for from schools participating in the program.
Federal Supplemental Educational Opportunity Grant
Next, experts say financial aid officers will often consider students for the Federal Supplemental Educational Opportunity Grant. The FSEOG is one of the federal grants aimed at helping undergraduates with significant financial need, and it is often awarded to students who are eligible for the Pell Grant.
The grant is not offered at all institutions, so families should check with specific colleges and universities they are considering.
At participating schools, a student can receive between $100 and $4,000 a year in FSEOG money. The amount can depend on a number of factors: the student’s financial need, when he or she applies, the amount of other aid the student receives and the remaining availability of funds at the specific institution. Once a college runs out of its allotted FSEOG funding from the U.S. Department of Education, no more awards will be given.
For this reason, experts suggest submitting the FAFSA as early as possible.
At a participating institution like the University of Michigan — Flint, Vedder says financial aid officers have flexibility in how they distribute FSEOG funds.
“Once a student has their Pell Grant, if they qualify, an institution will build on that,” Vedder says. “For example, at the University of Michigan — Flint our Pell Grant eligible students will first be considered for Federal Supplemental Educational Opportunity Grants, and those go to the highest need students, but it’s a campus-based fund. We here at the institution can determine which population of students that goes to, but the need component still has to be there.”
State and Institution Grants
Finally, students should explore any state and college grants available to them to maximize their financial aid. These can vary widely across states.
Ohio, for example, offers the Ohio College Opportunity Grant to residents of the state who are pursuing an associate degree, first bachelor’s degree or a nursing diploma program at an eligible Ohio or Pennsylvania institution. Families must have an EFC of 2190 or less and a maximum household income of $96,000.
Ohio State University also offers its own need-based grants like the President’s Affordability Grant. OSU students who are Ohio residents and demonstrate financial need on the FAFSA are eligible for this grant.
Blontz suggests families who may not be eligible for a significant Pell Grant award because of their income seek out grants specific to the institutions they are considering.
“The most common grants are the federal PELL grant, state grants, and then school-specific grants,” Blontz wrote in an email. “While PELL and state grants have relatively low household income and asset thresholds, school-specific grants tend to be provided to a wider range of families.”
Full article by Emma Kerr can be found here.
