Maintained for Historical Purposes

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

Sources of aid

AwardYear: 1996-1997
Edition: PostSecondary
Part: 1 - - General information about postsecondary opportunities
SectionNumber: 1
SectionTitle: Sources of aid

PageNumbers: 5-13

Many high school students are not aware that they may be eligible
for financial aid to attend college. 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, be sure to
give them copies of The Student Guide, as well as any information
offered by your state's higher education agency. The Student Guide
describes the federal student financial aid programs offered by the
U.S. Department of Education. The Department sends copies of The
Student Guide to every college and university in the United States. It
may also be ordered by writing:

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

This handbook focuses on the Student Financial Assistance (SFA)
programs administered by the Department. These programs are
authorized by the Higher Education Act of 1965, as amended
(referred to in this text as "the law"). For 1995-96, the SFA
Programs delivered more than $28 BILLION in aid to more than
SIX 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.

The Major Federal Student Aid Programs Administered by the
Department of Education

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

Federal Pell Grants

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

William D. Ford Federal Direct Loans
- Federal Direct Stafford Loans
- Federal Direct PLUS Loans

Federal Family Education Loans
- Federal Stafford Loans
- Federal PLUS Loans

It is customary to group these programs by type of aid: GRANTS
(Federal Pell and Federal Supplemental Educational Opportunity
(FSEOG) Grants) that do not have to be repaid; LOANS (Federal
Perkins, Federal Direct Stafford, 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 Federal 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 the Department. 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 Grant and
will be reimbursed by the Department. In contrast, the Department
allocates a specified amount of funds each year to each of the
postsecondary schools that participate in the campus-based
programs. The school, following federal guidelines, then awards
these funds to students. 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.

The William D. Ford Federal Direct Loan (Direct Loan) Program
enables eligible students and parents to borrow from, and repay loans
to, the Department instead of a bank or other lending institution.
Thus, student and parent borrowers work with a single entity, the
U.S. Department of Education, through its Servicing Center. The
Direct Loan Program offers a range of flexible repayment options to
accommodate borrowers' varied financial circumstances. Funds lent
under the Direct Loan Program are supplied by the federal
government to schools that participate in this program. There are two
types of Federal Direct Stafford Loans: Federal Direct Subsidized
Loans and Federal Direct Unsubsidized Loans. 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 at least half time, 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 of their
dependent children; these loans are also not need based and are not
subsidized (interest is charged throughout the life of the loan).

The funds borrowed under the Federal Family Education Loan
(FFEL) Program are provided by banks and other lenders. The loans
are reinsured by the federal government in certain circumstances--for
example, in the event the borrower dies or becomes totally and
permanently disabled. Federal Stafford Loans can be subsidized or
unsubsidized. Like Direct Subsidized 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 subsidized loan while the student is in school (at least half time)
and during certain other authorized 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 school the
eligible student plans to attend will tell the student which program he
or she can borrow from at that school.

See the Student Guide for more information on the Department's
major federal student aid programs.

[A chart from page 8 is currently unavailable for viewing. Please
reference that page in the Handbook for further information].


The State Student Incentive Grant (SSIG) Program assists states in
providing grants to eligible students who attend postsecondary
schools. Each state has its own name for this grant program, as well
as its own award amounts and application procedures. Many of the
eligibility criteria are established by the state agency administering
the program, although SSIG recipients must also meet the same basic
eligibility criteria that apply to other SFA Program recipients. 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

The Department also provides 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 maxi-
mum 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.

Under the Robert C. Byrd Honors Scholarship Program (Byrd
Program), which recognizes and promotes student excellence and
achievement, the U.S. Secretary of Education makes grants to the
states to provide 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 cost of attendance) for each of their first four years
of study at any institution of higher education.


A program of National and Community Service provides full-time
education awards of up to $4,725 a year. Individuals may work
before, during, or after their postsecondary education and can use the
funds either to pay current or future education expenses or to repay
federal student loans. Students must be high school graduates or have
General Education Development Certificates (GEDs) to participate in
this program. For more information, call 1-800-942-2677 or write to:

The Corporation for National and Community Service
1201 New York Avenue N.W.
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 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. In addition, the Public Health Service sponsors the
Scholarships for Disadvantaged Students Program, which provides
scholarships for financially needy students enrolled in health
professions and nursing programs. A student interested in these
programs should contact the financial aid office of the school he or
she plans to attend. The Public Health Service also sponsors a
number of programs for graduate students in medicine. 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

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

- veterans who died from any cause while rated permanently and
totally disabled from service-related 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 so that a student may pursue an associate,
a bachelor's, or a graduate degree at any accredited college or
university. 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 1-202-273-5400.

Army Reserve Officers' Training Corps (ROTC) is a program that
provides college-trained officers for the U.S. Army, the U.S. 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 providing 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 targets 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
premedicine 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 that considers 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 for tuition, the cost of textbooks, instruction-related fees, 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.


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.

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 receive 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: 12/02/1999