Financial Aid Information

Adult students - check out the financial aid information specifically for adults on the Adult Student page

NEW! - Watch the Federal Student Aid Video: Application Processing and Delivery System Update: What's New for 2004-2005 (also available at

If you've even done a preliminary search on the Internet for financial aid, then you know how many sources of aid are available. Read over this material to find out more about the different types, and where to go to get even more information.

REMEMBER: The most important source for financial aid information will be the financial aid department at the college or university to plan to attend. Contact them as soon as possible, since most financial aid - grants, loans, scholarships - all have deadlines. The sooner you contact the school, the better your chances of getting your applications in before time runs out!

Financial Aid

Financial aid is calculated by subtracting the contribution expected by the family from the total cost of attendance. You will need to complete a Free Application for Federal Student Aid (FAFSA) form in order to qualify for most types of financial aid. 

Financial aid such as grants, loans and work-study programs are usually awarded based on need. Scholarships may have different criteria for selection. Scholarships and grants do not have to be paid back, but loans and work-study programs must be repaid. Your best source of information is the financial aid office at the school you plan to attend. In the meantime, check out some of these links:

FAFSA on the Web 
The U. S. Department of Education’s electronic FAFSA web site. You may fill and submit a FAFSA form from this site.
Financial aid info (does not collect personal info like email – like FAST web, FinAid, and many others)

The Student Guide 
Financial Aid Information from the U.S. Department of Education

Federal Student Aid Information Center
1-800-4-FED-AID (1-800-433-3243) This is a toll-free number.

The financial aid information page has information on grants, loans and scholarships, financial aid applications, calculators and guide to admissions testing. 

Huge scholarship database and guide to financial aid, scholarships, grants and loans.

Federal Financial Aid

Most financial aid comes from the federal government, which provides need-based aid in the form of grants, work-study programs, and loans. Up-to-date information about federal financial aid programs can be found at the U.S. Department of Education's Web site, or by calling 1-800-4-FEDAID (toll-free).

Are You Eligible for Federal Financial Aid? 

Your financial need is just one criterion used to determine whether or not you are eligible to receive aid from the federal government. In addition, you must 

• have a high school diploma or GED or pass a test approved by the Department of Education 
• be enrolled in a degree or certificate program 
• be enrolled in an eligible institution (see below) 
• be a U.S. citizen or eligible noncitizen 
• have a Social Security number 
• register with the Selective Service (if required)
• maintain satisfactory academic progress once you are in school

*In Texas, high school students who want to take dual credit classes usually won’t qualify for financial aid, since most aid requires that you be enrolled at least half-time as a college student. However, some community colleges waive tuition for dual credit courses – ask the college of your choice what financial aid options it offers for dual credit students.

Institutional and Program Eligibility

To make sure that the school and program in which you are interested are eligible to participate in federal financial aid programs, contact them and ask. 

However, you can also do some double-checking on your own to confirm what the school tells you. If you plan to enroll in a regionally accredited traditional college or university, you can safely assume that the institution as a whole is eligible to participate in federal aid programs--since distance certificates and degrees are likely to be a very small proportion of its overall offerings. However, because institutions have the discretion to exclude specific programs, check to see if the school disperses federal aid to students enrolled in programs that interest you.

Federal Aid Programs

Once you've established the eligibility of the institution and program in which you are interested, check the federal aid programs in which they participate. Not all schools participate in all the available programs.

 Pell Grants, which do not have to be repaid, are awarded to undergraduate students on the basis of need, even if they are enrolled less than half-time. 
• Federal Supplemental Educational Opportunity Grants (FSOEG) are awards to undergraduates with exceptional financial need, even if they are enrolled less than half-time. These grants do not have to be repaid.
• Federal Work-Study Program provides part-time jobs in public and private nonprofit organizations to both undergraduate and graduate students who demonstrate financial need. The government pays up to 75 percent of your wages, and your employer pays the balance. 
• The Federal Family Education Loan (FFEL) Program and the William D. Ford Direct Loan Program, commonly called Stafford Loans, are two loan programs sponsored by the federal government. You are eligible to borrow under these loan programs if you are enrolled at least half-time and have financial need remaining after your Estimated Family Contribution, Pell Grant eligibility, and aid from other sources are subtracted from your annual cost of attendance. These must be paid back.
• Perkins Loan Program is available to both undergraduate and graduate students who demonstrate exceptional financial need, whether enrolled full-time or part-time. This loan must be paid back.

State Aid Programs for Texans

It's important to remember that the more specific the requirements are for a certain scholarship, the smaller the pool of possible recipients will be, which increases your odds of receiving it. Of course, many of these are for a smaller dollar amount, but you stand a better chance of getting several smaller scholarships than a single enormous scholarship.

You may wonder why you have to list hobbies, interests, clubs that you or your parents belong to, places you or your parents have worked, etc. on some of the financial aid websites - here are a few examples of some scholarships for Texas residents that have very specific requirements:

Texas Resident Scholarships

Minority Student Financial Aid Opportunities

Visit this scholarship search engine on the Texas A&M University MANRRS website. There are also multiple links to scholarships and other financial aid on the College for Texans website. More information is available in the Dual Credit and Distance Education for Hispanic Students Brochure.

Private Sources of Financial Aid

Colleges and Universities 
Many institutions award both need-based and merit-based aid to deserving students. To find out more about the available types of aid at a particular institution, contact the financial aid office.

National and Local Organizations
Foundations, nonprofit organizations, churches, service and fraternal organizations, professional associations, corporations, unions, and many other national and local organizations award grants to students of higher education. 

Alternative Loan Programs
In addition to the federal loan programs, there are many private alternative loan programs designed to help students. Most private loan programs disburse funds based on your creditworthiness rather than your financial need. 

Home Equity Loans

A home equity loan or line of credit can be an attractive financing alternative to private loan programs. Some of these loans are offered at low rates and allow you to defer payment of the principal for years.

Credit Cards 
Whatever you do, DO NOT USE YOUR CREDIT CARDS TO BORROW MONEY FOR SCHOOL ON A LONG-TERM BASIS. The interest rates and finance charges will be high, and the balance will grow astronomically. Credit cards are useful to pay tuition and fees IF:

(1) you can pay the balance in full, 
(2) you expect a student loan to come through shortly, or 
(3) you expect your employer to reimburse your costs.

Otherwise, avoid them.

Internships and Cooperative Education Programs 
Internships with organizations outside the university can provide money as well as practical experience in your field. As an intern, you are usually paid by the outside organization, and you may or may not get credit for the work you do. Employer Reimbursement If you work full-time and attend school part-time, you may be reimbursed for part or all of your tuition by your employer.

Tax Benefits for Students

Whether or not you receive financial aid, there are many recently enacted tax benefits for adults who want to return to school and the parents of college-bound students. In effect, these tax cuts make the first two years of college universally available, and they give many more working adults the financial means to go back to school.

The HOPE Scholarship Tax Credit 
Students whose adjusted gross income falls within certain limits receive a 100 percent tax credit for the first $1,000 of tuition and required fees and a 50 percent credit on the second $1,000.

The Lifetime Learning Tax Credit 
A family may receive a 20 percent tax credit for the first $5,000 of tuition and required fees paid each year through 2002 and for the first $10,000 thereafter.

Individual Retirement Accounts 
Taxpayers can withdraw funds from an IRA, without penalty for their own higher education expenses or those of their spouse, child, or even grandchild.

State Tuition Plans

When a family uses a qualified state-sponsored tuition plan to save for college, no tax is due in connection with the plan until the time of withdrawal. For more information visit: Texas Guaranteed Tuition Plan.

Texas 529 Plan is another new college savings plan. 

For information on state-sponsored tuition plans in other states, visit the National Association of State Treasurers website.

Tax-Deductible Student Loan Interest 
The new student loan interest deduction allows students or their families to take a tax deduction for interest paid in the first sixty months of repayment on student loans.

Tax-Deductible Employer Reimbursements 
If you take undergraduate courses and your employer reimburses you for education-related expenses, you may be able to exclude up to $5,250 of employer-provided education benefits from your income.

Community Service Loan Forgiveness 
This provision excludes from your income any student loan amounts forgiven by nonprofit, tax-exempt charitable, or educational institutions for borrowers who take community-service jobs that address unmet community needs.

Financial Aid Scams

How can you tell the legitimate scholarship and financial aid offers from the scams? One sure sign is that the legitimate ones DO NOT REQUIRE ANY UP FRONT MONEY FROM YOU. If you're asked to come up with money - application fees, fees to attend a seminar, scholarship search fees - it's probably a scam.

Besides, there are so many FREE places to search for financial aid (like the ones found on this page) that even if a fee-based search is legitimate, why should you pay for something you can get free?

For a very informative explanation of financial aid scams, visit FinAid: The SmartStudent Guide to Financial Aid.

Financial Aid Myths

Myth: Millions of scholarship dollars go unclaimed every year.
Reality: The statement that private scholarship dollars go unclaimed is unfounded. This is what professional scholarship search services want you to think so that you'll pay for their services. You can do your own FREE search for scholarships - just check out the links above.

Myth: There's not as much financial aid as there used to be.
Reality: A recent statistic indicates that in 1965 $600 million was available for financial aid. By the academic year 1999-2000, that figure soared to $68.4 billion. Loans and work-study are now a larger percentage of the total financial aid award than they used to be, which could account for this particular myth.

Myth: You can't get any financial aid because your family's income is too high.
Reality: Income is only one of the criteria on which financial aid is based - some scholarships are based on merit, affiliations, hobbies, geographic location, etc. If the school's costs exceed your family's means, you will still qualify for some form of financial aid (grants, work-study, or loans).

Myth: You can't get any financial aid without a Social Security Number / documentation.
Reality: Generally, undocumented students who are Texas residents** and who can demonstrate financial need to the college may be eligible for state funded aid programs, excluding work-study (as these students don't have work permits, they can't participate in work-study). To apply, these students must complete the FAFSA (paper version only as they don't have a Social Security Number) and give that application directly to the financial aid office at the college (that is, don't send it in to the Dept. of Ed. for processing).The college financial aid office will then make all awards based on their determination of the student's needs. 

**Generally, you may be considered a Texas resident if, prior to the time you enroll in a Texas college or university, you (or your parent, if you are a dependent for federal income tax purposes):

Myth: You shouldn't even consider your first-choice school if it costs too much.
Reality: Generally, the higher the total school costs, the easier it is to demonstrate eligibility for financial aid. Also, the stated costs at a school can be deceiving: aid is often available to offset some of the costs. Go ahead and apply to the school and wait to see the financial aid award letter, or contact the financial aid office for more information.