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Federal Student Aid

Learn how Federal Student Aid and your military = education=20 benefits can work together.

The federal government offers several Financial Student Aid Programs. = These=20 programs offer you extremely low interest loans and grants (free money). = Unlike=20 the GI Bill, these programs are paid through the school; however, like = the GI=20 Bill, Federal Student Aid is designed to assist you in meeting the cost = of=20 tuition, books, fees, and living expenses while you go to = school. That=20 means that once the school has taken its share, the remaining loan or = grant=20 balance goes to you.

Financial Student Aid Eligibility

You are eligible for FSA if you are all of the following:

A high school graduate, or have a General Education Development = (GED)=20 certificate;=20
Working toward a degree or certificate;=20
Enrolled in an eligible school or program;=20
A U.S. citizen or eligible non-citizen (must have a valid Social = Security=20 Number);=20
Registered with the Selective Service if required (you can use the = paper=20 or electronic FAFSA to register)

Military Servicemembers Are Eligible

It doesn't matter whether you are active duty, reserve, veteran, = retiree, on=20 MGIB, or not -- you should be taking advantage of these programs. There = are=20 numerous examples of even senior active duty members receiving federal = loans and=20 large grants. Remember: Grants are gifts that you don't repay!

For Example: In 2002-2003 an active duty E-7 with three = dependents=20 received Direct Loans for the maximum amount, and PELL grants for $1500 = each=20 year.

Note: Recent Legislation has made some significant = changes=20 to the Federal Student Aid program. Check out the Higher=20 Education Reconciliation Act to learn more.

Applying for FSA

Once you have enrolled in college, you need to start the application = process.=20 You can apply for all of the available FSA by filling out the FAFSA form = online.=20 Once you have submitted the Free Application for Federal Student Aid = (FAFSA),=20 your school will notify you which types of loans, grants and the total = amounts=20 you are qualified to receive. When you get this notification from the = school,=20 simply select to loans and grants you want and the school will finish = the loan=20 process.

Tip: Applying for FSA is easy if you use the FAFSA Pre-Application Worksheet to guide you. Without = the=20 worksheet the FAFSA process can be complicated. You will need to gather = your tax=20 forms from previous years, including W-2s, bank statements and = investment=20 statements to complete the form.

Money Saving Tip: FAFSA is a Free Application for = Federal=20 Student Aid; however there are some websites that offer to complete the = FAFSA=20 for you, for around $50. The FAFSA form only takes a relatively short = time to=20 complete. It is worth your time to complete it yourself. Click = here for more=20 information on the FAFSA process.

Every accredited school that is recognized by the Education = Department will=20 be eligible for some form of FSA. But the search for the right school = and=20 program can be time-consuming. Let Military.com help you, you can get free = information on=20 schools that fit your needs by filling out one simple form to find = the=20 "Military Friendly" schools that are eager to send you free information = on how=20 to get the funding you need to cover your education goals.

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Available Loans and Grants

The following Table gives you a quick breakdown on the types of loans = and=20 grants, applications, interest rates and monetary limits:

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Loan/Grant Program	Application Process & Forms	Loan Fees?	Interest	Monetary Limits	Loan Source
Direct Loans Stafford (Unsubsidized*)	FAFSA (Worksheet)	Yes	Variable up to 8.5%	$6,625 1st Yr $7,500 2nd Yr $10,500 3rd Yr	Federal Govt.
Direct Loans Stafford (Subsidized**)	FAFSA (Worksheet)	Yes	Variable up to 8.5%	$6,625 1st Yr $7,500 2nd Yr $10,500 3rd Yr	Federal Govt.
Federal Family Education Loan (FFEL) (Unsubsidized*) =	FAFSA (Worksheet)	Yes	Variable up to 8.5%	$6,625 1st Yr $7,500 2nd Yr $10,500 3rd Yr	Private Banks
Federal Family Education Loan (FFEL) (Subsidized**) =	FAFSA (Worksheet)	Yes	Variable up to 8.5%	$6,625 1st Yr $7,500 2nd Yr $10,500 3rd Yr	Private Banks
Perkins Loan	FAFSA (Worksheet)	No	Fixed 5%	Up to $4000 @ Year	Schools
PELL Grant	FAFSA (Worksheet)	No	N/A	Up to $4,000 @ Year	Federal Govt.
Federal Student Education Opportunity Grant (FSEOG) =	FAFSA (Worksheet)	No	N/A	Up to $4,000 @ Year	Federal Govt.

Loans

FSA Loans are Financial Aid that is either funded or backed by the = federal=20 government, and paid directly through the school. Each type of loan has=20 different fees (a percentage charged up front), interest rates and = payment=20 deferment plans.

Direct (Stafford) Loans

There are two different types of Direct Loans, Unsubsidized and = Subsidized.=20 These loans are identical in most ways, except how and when you begin to = be=20 charged interest.

*Unsubsidized - With the Unsubsidized Stafford loan, = the=20 interest begins compounding as soon as your school receives the money. = When=20 considering which loans to accept, you need to know that the = interest on=20 an unsubsidized loan can really add up over four years. If you = choose=20 to take an unsubsidized Direct Loan, we recommend that you consider = making=20 monthly interest payments as you go.

**Subsidized - With the Subsidized Stafford loan, = you are=20 not charged interest until 6 months after you leave = school.=20 This can mean a huge savings, considering you may be in school for more = than=20 four years.

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FFEL Loans

The only difference between the Stafford Loans and the FFEL is the = source.=20 Private banking institutions fund FFEL loans. FFEL is also available in=20 unsubsidized and subsidized forms

Perkins Loans

Perkins loans are funded by participating schools and have a fixed = interest=20 rate of 5%. All of the billing and payment arrangements are made = directly=20 through the school's business office.

Grants

Grants are free money for school paid by the Federal Government = through the=20 school's business office. After your school bills are paid, the = remaining=20 balance goes to you.

PELL Grants

Depending on your financial need and tuition costs, you can receive = up to=20 $4000 each school year.

FSEOG Grants

These grants are reserved for the most needy candidates, and are paid = in=20 addition to PELL grants. Like the PELL, FSEO Grants are also limited to=20 $4000 per school year.

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