History

• Financial assistance for college education began in 1643 when Harvard University granted the first scholarship using funds donated by Lady Anne Radcliffe Mowlson. The Servicemen's Readjustment Act of 1944, better known as the GI Bill of Rights, opened the door to a college degree for those with military service. In response to the Soviet Union's space program, the National Defense Education Act launched a student loan program in 1958 now known as the Federal Perkins Loan Program. The first federal grant program for students --- Education Opportunity Grants --- became available in 1960, followed by the College Work-Study Program in 1964, Guaranteed Student Loan Program in 1965, Basic or Pell Grants in 1972 and Hope Scholarship and Lifetime Learning tax credits in 1997.
  
  

Special Grants

• The College Cost Reduction and Access Act of 2007 established Teach Grants for students seeking careers in elementary or secondary schools in low-income areas. Teach grants carry a service obligation of four years of classroom instruction in a "high-need" subject such as science, math, reading, English as a Second Language and special education. Academic Competitiveness Grants target needy students whose high school curriculum included a "rigorous secondary school program." The National Science and Mathematics Access to Retain Talent (SMART) Grant supports undergraduates in their junior and senior years majoring in sciences, including computer science and technology; engineering; math; a "critical foreign language or non-major single liberal arts program," according to the U.S. Department of Education (DOE). A new grant established in 2010 --- Iraq and Afghanistan Service Grant --- assists students under age 24 whose parent or guardian died as a result of military service performed in Iraq or Afghanistan after Sept.11, 2001. For those with extreme need, the Federal Supplemental Educational Opportunity Grant (FSEOG) program supplements Pell Grant assistance.
  
  

Pell Grants

• Like special grants, Pell Grants do not have to be repaid, making them a student's first choice in financial support. According to the DOE, Pell Grants represent the foundation of federal student aid. Recipients must be undergraduates pursuing their first bachelor's or professional degree. Congress sets the annual maximum payout; however, the amount dispersed depends on the student's "expected family contribution (EFC)," school cost and status as a full- or part-time student. The DOE uses the Federal Need Analysis method to determine EFC.
  
  

Loans

• The DOE offers the Federal Perkins and Direct Stafford Loan programs for students and Direct PLUS Loans for graduate students and parents of undergraduate students. DOE classifies Perkins Loans as "campus-based aid," meaning it allocates a fixed amount of money to each participating university. The school financial aid office has the flexibility to approve a Perkins Loan to its students based on their need and total aid package. Low-interest Direct Stafford Loans come in two formats: subsidized and unsubsidized. The school determines the amount borrowed for both. Unsubsidized Direct Stafford Loans have no financial-need requirement.
  
  

Work-Study

• Part of a student's financial aid package may include money to be earned through the federal work-study program. Most students work on-campus for their school and receive a paycheck that they can use for expenses and tuition. The award amount determines how many hours per week can be worked. Work-Study is a campus-based aid program financed by the DOE.
  
  

Eligibility

• Eligibility requirements vary with each type of financial aid; however, all federal aid programs require students to complete the Free Application for Federal Student Aid (FAFSA) form. Applicants must submit FAFSAs by the end of June for aid needed in the fall. Deadlines set by individual schools may differ. A processed FAFSA application will indicate the "expected family contribution" that drives award amounts.