Maintained for Historical Purposes

This resource is being maintained for historical purposes only and is not currently applicable.

Sources of aid

AwardYear: 1995-1996
Edition: High School
Part: 1 - - General Information about Postsecondary Opportunities
SectionTitle: Sources of aid

PageNumbers: 5-13

Many high school students are not aware that they may be eligible for financial aid to attend a college or a career school. Unfortunately, many of the neediest students assume that they cannot afford to go to college to continue their education. Financial aid is available, though, often through Federal student aid programs.

To help students find out more about the student aid programs administered by the U.S. Department of Education (ED or the Department), be sure to give them copies of The Student Guide, as well as any information offered by your state's higher education agency. The Department updates THE STUDENT GUIDE once a year and sends order forms to every high school in the United States in the fall. The 1995-96 STUDENT GUIDE may be ordered by writing to the following address:

Federal Student Aid Information Center
P.O. Box 84
Washington, DC 20044

This handbook focuses on the student financial aid (SFA) programs administered by the U.S. Department of Education. These programs are authorized by the Higher Education Act of 1965 (referred to in this text as "the law"), as amended. For 1995-96, the SFA programs will deliver more than $28 BILLION in aid to more than 6 MILLION students. This amount represents a substantial commitment by the Department to provide financial assistance for students at the postsecondary level. However, there are other important sources of aid that also may be available to your students. To encourage them to find out more about other sources of aid, tell your students to check the reference section of the school library or public library. You may want to suggest titles of books that you feel are particularly pertinent. APPENDIX A has some references you and your students might find helpful.


ED administers the following major financial aid programs to help students meet the costs of postsecondary education:

Federal Pell Grants

Campus-Based Federal Supplemental Educational Opportunity Grants
Programs Federal Work-Study
Federal Perkins Loans

William D. Ford Federal Direct Subsidized Loans
Federal Direct Federal Direct Unsubsidized Loans
Loans Federal Direct PLUS Loans

Federal Family Federal Stafford Loans
Education Loans Federal PLUS Loans

It is customary to group these programs by type of aid: GRANTS (Federal Pell and Federal SEOG) that do not have to be repaid, LOANS (Federal Perkins, Federal Direct Subsidized and Unsubsidized, Federal Direct PLUS, Federal Stafford, and Federal PLUS) that enable students--and parents, in the case of Direct and Federal PLUS Loans--to borrow money to help meet education costs, and WORK-STUDY (FWS) that provides part-time jobs.

But it is also useful to think about the programs in terms of how aid is awarded and delivered to a student. Federal Pell Grants are awarded through strict rules set by ED. If a student is eligible on the basis of these rules, an eligible school will almost always be able to pay the student his or her FEDERAL PELL GRANTS and will be reimbursed by the Department. In contrast, ED allocates a specified amount of funds each year to each of the postsecondary schools that participate in the CAMPUS-BASED programs. The school then awards these funds to students following Federal guidelines. Campus-based funds are limited, and many schools award them early. Therefore, the earlier an eligible student applies, the more likely he or she is to receive campus-based aid. An eligible student who applies after all campus-based aid has been expended will be unable to receive campus-based aid.

ED introduced the WILLIAM D. FEDERAL DIRECT LOAN (DIRECT LOAN) PROGRAM during the 1994-95 school year. Direct lending is a new way of delivering Federal education loans to eligible borrowers. This program enables eligible students and parents to borrow from, and repay loans to, the Department instead of a bank or guaranty agency. Thus, the student and parent borrowers work with a single entity, the U.S. Department of Education, through its Servicing Center.

In addition, the Direct Loan Program offers a range of flexible repayment options to meet borrowers' varied financial circumstances. For 1995-96, ED expects that nearly 1,500 schools will be participating in the Direct Loan Program. Funds lent under the Direct Loan Program are supplied by the Federal government to schools that participate in this program. Federal Direct Subsidized Loans are made to students who qualify on the basis of financial need and other factors. The Federal government does not charge interest during some significant periods, such as when the student is in school, thereby subsidizing these loans for borrowers. Federal Direct Unsubsidized Loans are not made on the basis of financial need, and the government charges the borrower interest throughout the life of the loan. Federal Direct PLUS Loans are made to parents to pay the undergraduate education costs for their dependent students. Direct PLUS Loans are also funded by the Federal government; they are not need based and are not subsidized (interest is charged throughout the life of the loan).

The funds lent under the FEDERAL FAMILY EDUCATION (FFEL) PROGRAM are provided by banks and other lenders. The loans are reinsured by the Federal government in the event the borrower defaults, dies, becomes totally and permanently disabled, or has the loan discharged in bankruptcy. Federal Stafford Loans can be subsidized or unsubsidized. Like Direct Loans, subsidized Stafford Loans are made to all students who qualify on the basis of financial need and other factors. The Federal government pays the interest on the loan when the student is in school and during other periods. Unsubsidized Stafford Loans are not based on need, and the student is responsible for paying all the interest on the loan. Federal PLUS Loans are available to parents of dependent undergraduate students. These loans are also not need based, and the borrower is responsible for paying all the interest on the loan.

Students and parents cannot borrow from both the FFEL Program and the Direct Loan Program at the same time. The college or career school the eligible student plans to attend will advise students of which program they can borrow from at that school.

See THE STUDENT GUIDE for more information on ED's major Federal student aid programs.

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The STATE STUDENT INCENTIVE GRANT (SSIG) PROGRAM assists states in providing grants to eligible students who attend postsecondary schools. Many of the eligibility criteria are established by the state agency, although SSIG recipients must also meet the same basic eligibility criteria that apply to other SFA program recipients. Each state has its own name for this grant program, as well as its own award amounts and application procedures. States may use a percentage of their SSIG funding to provide work-study assistance through community service job programs. Because of the variations in state programs, student and school inquiries about SSIG and other state grant, scholarship, and work-study assistance should be directed to the appropriate state agencies. These are listed in APPENDIX B.

ED provides other types of student aid for disabled persons through programs that are administered by state vocational rehabilitation agencies. Students must meet state eligibility criteria for these programs, and this aid must be coordinated with student aid from other sources to prevent duplicating benefits. Students are most likely to receive the maximum assistance by contacting, as early as possible, the state agencies that administer the state programs for their home states and the financial aid offices at the schools they plan to attend.

The U.S. Department of Education also provides funding to state agencies for several student aid programs that select recipients on the basis of academic merit:

THE PAUL DOUGLAS TEACHER SCHOLARSHIP PROGRAM (DOUGLAS PROGRAM) is a Federal program that provides college scholarships to outstanding high school graduates who want to pursue teaching careers at the preschool, elementary, or secondary level after they finish college. Students who graduate in the top ten percent of their high school class may apply for the scholarships, which provide up to $5,000 per year for up to four years of postsecondary education. Specific information on the Douglas Program, including the state-set criteria to award the scholarships, scholarship application forms, and submission instructions, is available from the student's state grant agency. (See Appendix B for a list of state agencies.)

Under the ROBERT C. BYRD HONORS SCHOLARSHIP PROGRAM (BYRD PROGRAM), to recognize and promote student excellence and achievement, the U.S. Secretary of Education makes grants to the states, providing scholarships to exceptionally able students for postsecondary study. Student recipients under this program are known as "Byrd Scholars." To apply for a Byrd Program scholarship, a student follows the application procedures established by the state educational agency (SEA) in the state in which the student resides. The SEA establishes procedures for selecting the scholars after consulting with school administrators, school boards, teachers, counselors, and parents. Byrd Scholars are awarded $1,500 each year (not to exceed the scholar's cost of attendance) for each of their first four years of study at any institution of higher education.

THE NATIONAL SCIENCE SCHOLARS PROGRAM (NSSP) is a Federal program that awards scholarships to students for undergraduate study of the physical, life, and computer sciences, mathematics, or engineering at postsecondary institutions. Scholars who have demonstrated excellence and achievement in one of these areas are nominated by state committees and selected by the President of the United States in consultation with the Director of the National Science Foundation and the U.S. Secretary of Education. Scholarships of up to $5,000 are awarded to outstanding graduating high school students and GED recipients for the first year of undergraduate study. The amount a student actually receives depends on the program's funding level. For example, the maximum scholarship for 1994-95 was approximately $1,400. A scholar who maintains eligibility may receive three or four additional awards in subsequent years, depending on the length of his or her undergraduate program. Information on the NSSP, including the scholarship application process, is available from the chief state school officer in the state in which the student resides or from each participating state's department of education.


A new program of NATIONAL AND COMMUNITY SERVICE provides full-time education awards of $4,725 a year. Individuals may work before, during, or after their postsecondary education and can use the funds either to pay current education expenses or to repay Federal student loans. Students must be high school graduates or have GEDs to participate in this program. For more information, call 1-800-942-2677 or write to: The Corporation for National and Community Service, 1100 Vermont Avenue, NW, Washington, DC 20525.

The U.S. Department of Labor administers the JOB TRAINING AND PARTNERSHIP ACT (JTPA) through the states. Training funds vary from state to state. In most cases, the states provide tuition and fee assistance for job training and sometimes also provide a transportation allowance for students. For information on JTPA, students should contact their state employment agency.

THE MONTGOMERY GI BILL-ACTIVE DUTY is a program of education benefits for students who enter active duty for the first time after June 30, 1985. The student must, with certain exceptions, serve continuously on active duty for three years of a three-year enlistment or, for a lesser benefit, two years of an initial active duty obligation of less than three years. A student also may qualify for education benefits by initially serving two continuous years on active duty, followed by four years of service in the Selected Reserve.

THE MONTGOMERY GI BILL-SELECTED RESERVE is a program of education benefits for reservists of the armed forces as well as the Army National Guard and the Air National Guard. To be eligible for this program, a reservist must have a six-year obligation to serve in the Selected Reserve, complete Initial Active Duty for Training, have a high school diploma or its equivalent, and remain in good standing in a drilling unit of the Selected Reserve.

If a student has a parent who is a military veteran, the student may qualify for help from the U.S. Department of Veterans Affairs. Education assistance benefits are available to spouses and children of:

* veterans who died or are permanently and totally disabled as the result of a disability arising from active service in the Armed Forces;

* veterans who died from any cause while rated permanently and totally disabled from service-connected disability;

* service persons presently missing in action or captured in the line of duty by a hostile force; or

* service persons presently detained or interned in the line of duty by a foreign government or power.

Benefits may be awarded to pursue associate, bachelor, or graduate degrees at colleges and universities. Courses leading to a certificate or diploma from a business, technical, or vocational school may also be taken. For further information on the Montgomery GI bill and other veterans benefits, students should call the toll-free number for the U.S. Department of Veterans Affairs, 1-800-827-1000.

The Department of Veterans Affairs also administers the VA HEALTH PROFESSIONALS EDUCATIONAL ASSISTANCE PROGRAMS. The SCHOLARSHIP AWARDS PROGRAM provides awards on a competitive basis for undergraduate and graduate students in health-care shortage categories such as nursing, physical therapy, occupational therapy, and nurse anesthesia. The RESERVE MEMBER STIPEND AWARDS PROGRAM provides aid for students who are (1) in the last year of an associate degree program in nursing or (2) in either the third or fourth year of a master's program in nursing, physical therapy, or occupational therapy. The reservist must also be a member of the Selected Ready Reserves, eligible for the Reserve GI Bill, and have a score above the 50th percentile on the Armed Forces Qualification Test. In return for awards from these programs, a participant is required to provide professional service for a designated period at a VA medical center. For further information, contact: The Health Professionals Educational Assistance Programs (143B), U.S. Department of Veterans Affairs, Office of Academic Affairs, 810 Vermont Avenue, N.W., Washington, DC 20420, or call 1-202-535-7528.

ARMY RESERVE OFFICERS' TRAINING CORPS (ROTC) is a program that provides college-trained officers for the U.S. Army, the Army National Guard, and the U.S. Army Reserve. The program is offered at hundreds of colleges and universities across the nation. Four-year scholarships are awarded on a competitive basis to students who will be entering college as freshmen. The scholarships may be worth up to $48,000, paying for most college tuition and on-campus education fees, as well as an additional allowance for textbooks, supplies, equipment, and personal expenses. Application packets, information on eligibility, and the telephone number of an ROTC advisor in a student's area may be obtained from: Army ROTC, Gold Quest Center, P.O. Box 3279, Warminster, PA 18974-0128 or by calling 1-800-USA-ROTC.

The AIR FORCE ROTC college scholarship program is intended for high school seniors or graduates who haven't enrolled as full-time college students. The scholarship program is especially targeted to those pursuing technical degrees. Four-year scholarships may be lengthened to five years in certain academic majors and programs. Air Force ROTC scholarships are awarded on individual merit, not on financial need. The Air Force also offers scholarships to individuals who are already in college. These scholarships cover one to three years of a bachelor's degree program in certain engineering and science majors as well as in other job categories. There are also scholarships for premed majors. Applications for Air Force ROTC scholarships may be obtained by writing to: HQ AFROTC551 East Maxwell Blvd., Maxwell AFB, AL 36112-6106.

THE NAVAL RESERVE OFFICERS TRAINING CORPS (NROTC) program offers young men and women an opportunity to qualify for commissions in the Navy and Marine Corps while attending college. This four-year scholarship is available to students who have graduated from high school before August 1 of the year they intend to start college. Scholarships are awarded annually on the basis of a competitive selection process in which consideration is given to such factors as high school class standings, college entrance test scores, extracurricular activities, and leadership qualities. Academic accomplishments in rigorous, technically demanding courses are considered especially noteworthy. During the student's years of college study, the Navy pays tuition, the cost of textbooks, fees of an instructional nature, and a subsistence allowance of $100 per month for a maximum of 40 academic months. For information concerning the NROTC scholarship program contact any college that offers NROTC or write to: Commander, Navy Recruiting Command/Code 314, 4015 Wilson Blvd., Arlington, VA 22203.

The U.S. PUBLIC HEALTH SERVICE administers the NURSING STUDENT LOAN PROGRAM for undergraduate and graduate nursing students. This program is intended to assist students pursuing careers in nursing by providing long-term, low-interest loans to help meet the costs of education. The Public Health Service also sponsors the HEALTH PROFESSIONS STUDENT LOAN PROGRAM (HPSL), the HEALTH EDUCATION ASSISTANCE LOAN (HEAL) PROGRAM, THE EXCEPTIONAL FINANCIAL NEED (EFN) SCHOLARSHIP PROGRAM, and the program of FINANCIAL ASSISTANCE FOR DISADVANTAGED HEALTH PROFESSIONS STUDENTS (FADHPS). These latter programs are for graduate students enrolled in accredited schools in the United States, Puerto Rico, or the Virgin Islands. For more information on financial aid programs administered by the U.S. Public Health Service, please write to:

U.S. Department of Health and Human Services
U.S. Public Health Service
Health Resources and Services Administration
Bureau of Health Professions
Division of Student Assistance
5600 Fishers Lane
Rockville, MD 20857


Students should be encouraged to contact their STATE AGENCIES for information about STATE PROGRAMS. A student might qualify for a private grant or scholarship for any of the following reasons: academic achievement, religious affiliation, ethnic or racial heritage, community activities, artistic talents, leadership potential, athletic ability, career plans, proposed field of study, or hobbies and special interests. The American Legion offers an inexpensive guide to private sources of aid called NEED A LIFT? (See Appendix A for the address.) Other books about financial aid may be available through your school library or public library. In addition, many postsecondary schools have their own sources of student financial aid. A student should contact the schools he or she is applying to for information about institutional aid.

Lastly, there are COMPUTERIZED SCHOLARSHIP SERVICES that will match a prospective student with sources of financial aid. These services tend to be relatively expensive, so a student or parent should consider the extent of the search being offered before committing to such a service. More than 75 percent of all aid awarded comes from federal and state programs that students can easily find out about through THE STUDENT GUIDE and other publications. If someone has had problems with a scholarship search firm, he or she may contact the local Better Business Bureau or the U.S. Postal Service. Some services guarantee that the student will be eligible for at least five sources of financial aid; however, please be aware that these sources may include the major Federal student aid programs that are discussed in this handbook and in THE STUDENT GUIDE. Students may get a free copy of THE STUDENT GUIDE from their local school or library or by calling the U.S. Department of Education's toll-free number, 1-800-4-FED-AID.

Last Modified: 04/30/1998