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Are you preparing to enter college or are you a parent preparing to pay for college? Are you considering financial aid as an option to assist in the planning process? Are you unsure where to begin or what kind of financial aid is available to you? If so, you aren’t alone.

Financial aid is available from the federal government in three forms: grants, loans, and work study. Here are the basics.


Grants provide money for college tuition that is not required to be paid back.

The Federal Supplemental Educational Opportunity Grant (FSEOG)

  • FSEOG grants are only available to undergraduate students with the most financial need.
  • Grant awards range from $400 to $4,000 per year.

Pell Grant

  • Pell grants are also available to undergraduate students with financial need.
  • A Pell grant award is based on enrollment status, cost of attending the school, and estimated financial contribution required by the student.
  • The maximum award for the 2016-17 school year is $5,815. This maximum award changes annually.

Iraq/Afghanistan Service Grant

  • Students are eligible for Iraq/Afghanistan grants if their parents or guardians were members of U.S. armed forces and died during services performed in Iraq or Afghanistan after 9/11.
  • This grant is available to students under 24 years of age or those enrolled in college at the time of the death of their parent or guardian.
  • The maximum award for the 2016-17 school year is $5,815. This maximum award changes annually.

Hybrid Grant/Loan


  • TEACH Grants are available to undergraduate and graduate students and intend to become teachers in high-need fields in low income areas.
  • Initially this is a loan meaning the money needs to be repaid. If certain criteria, including attaining a certain type of job, are met the loan is forgiven essentially making it a grant rather than a loan. If criteria are not met, the grant shifts to a direct unsubsidized loan.
  •  The maximum award for a TEACH Grants is up to $4,000 a year.

Direct Loans

Direct loans for students may have lower interest rates than a commercial loan.

Direct Subsidized Loans

  • The Subsidized loans are available to undergraduate students only and are considered a more favorable loan.
  • While in school as well as six months after you leave school the accrued interest on these loans is paid by the federal government.
  • The loans are at a fixed interest rates set by the government.
  • The loans are available in increments ($3,500, $4,500, $5,500) and are awarded based on the number of credit hours earned by the student.

Direct Unsubsidized Loans

  • The Unsubsidized loans are available to both undergraduate and graduate/professional students.
  • While attending school, accrued interest is added to the principal loan balance which the student is responsible for repaying.
  • The amount of the award varies based on program of enrollment.

PLUS Loans

  • PLUS loans are available to parents of undergraduate students and graduate/professional students.
  • Awards vary based on cost of attending the school and other aid received

Work Study Programs

  • Work study programs are available to undergraduate and graduate/professional students.
  • The financial awards are earned through employment, typically by the institution of higher learning.

The available federal awards vary by school and student. Check with the financial aid administrator of your school for additional details and eligibility. Always inquire with your school of the availability of institutional aid (private scholarships, grants, etc.). Visit Federal Student Aid site for additional information.

Amanda Socha, CPA

Amanda Socha works with clients in various industries, including private educational institutions, municipalities, trade associations, and non-profit organizations.