What is Financial Aid?

What is Financial Aid?

From 11th grade on you will hear the term Financial Aid more and more. With College looming on the horizon and parents struggling with their own economy problems, financial aid will start to sound more interesting. Financial Aid is best described as a way for students to get some assistance in paying school tuition, book and even room and board. There are many different types of financial aid, one of them is called No Loan Financial Aid and the other is called Loan Cap. These types of financial aid have standards set by each College or Universities all across the United States.

Colleges and Universities are removing the loan aspect from their financial aid packages. Back in 2001, the elite Princeton University was the first University to do just that. Rather than focus on how high of an income the parents have, these packages were focusing on what income the family did not have. For example Dartmouth University has a requirement that says in order for a student to receive the no loan financial aid their parents have to make less than $ 75,000 a year. Colleges like Lehigh University, Lafayette University and Emory University all require a family make less than $ 50,000 a year. This financial aid package allows for students who want to go to College and they make it possible.

The Loan Cap is a loan that has a maximum cap on how much the loan can be. This loan system can be given either by year to year or as a 4 year package. Each University has created their own Loan Cap System. Schools like Duke University offers this system to families who have undergraduate students and the family has to have an income between 40,000 And 100,00. These loans have a limit on them and based on a graduation perspective they will get from 1,000 to 4,000 a year in loans.

For students who cannot get full scholarships the United States offers what is called Federal Student Financial Aid. This system offers so many different grants Such as SMART Grants, Federal Stafford Loans, SEOG Grants and Pell Grants. Grants are a great thing to have because they don’t have to be paid back. These grants can take a huge financial burden off of the parents and students won’t leave school in the red.

If your child is starting to look at Colleges it is important that they make a list of all of the Universities they wish to attend and then do some tuition research. You should then request financial aid package information and then you can start to weigh which Colleges are possible and which are not. Every student has a right to attend a College or University and with the rising costs of just about everything, some students go right into the work force. Take some time and do the research to find any financial aid possible to get your child into the best College you can. You as a parent owe it to them.