Student aid is money provided by the federal government or another entity, such as a school or state government, to help students pay for college or trade school. The U.S. Department of Education’s federal student aid programs deliver billions of dollars to students each year, representing a substantial federal commitment to provide financial assistance for postsecondary students.
The U.S. Department of Education offers three major types of aid.
- Federal Grants: Are gift aid, and most do not have to be repaid unless and overpayment has resulted due to the student withdrawing from school before the planned end of period of enrollment for which the grant was awarded. Examples of grants include Pell, Academic Competitiveness, and National Science and Mathematics Access to Retain Talent.
- Campus-based Programs: Are administered by the financial aid office at the eligible schools that choose to participate. The Department of Education provides funding for the campus-based programs at participating schools based upon the amount the school has to applied to receive, the amount available nationally and the amount the school utilized the previous year. These funds are limited and the earlier a student applies the more likely they are to receive campus-based aid. Examples include Federal Work Study and Perkins loans.
- Federal Student Loans: The William D. Ford Federal Direct Loan Program enables eligible students and parents to borrow from the Department of Education instead of from a bank or other lending institution. There are four types of Direct loans: Subsidized and Unsubsidized Stafford Loans, PLUS loans, Consolidation loans.