What You Need to Know About
Financial Aid!
About the Imagine
America Foundation
IAF provides scholarships for education
with a focus on career schools. Find
the best scholarships to help fund your
education today! Read more
Scholarship, Scholarships and More
Scholarships!
Finding scholarships and resources
can be a time consuming task. But it’s
worth it! Scholarships and grants can
help alleviate college expenses. Read
more
Helping You Understand Federal Financial Aid.
Quick Links
All About Federal Financial Aid - Grants
During these hard times, people are looking toward the
future. For many this includes seeking a higher education.
During the 2008-2009 academic year, $168 billion in grants
from all sources, federal loans, federal work-study assistance,
and federal tax credits and deductions was available through
financial aid, according to the College Board. Read more
All About Federal Financial Aid - Loans
What are Your Repayment Options?
After you have graduated, left school, or dropped below half-time
you will need to start thinking about what repayment plan will
work for you. It is important to watch for information from your
lender that specifies your repayment options and your start date
for repayment. Read more
Additional Resources
Free Application for Federal Student Aid
(FAFSA)
Student Aid on the Web
U.S. Department of Education (funding)
Student Loan Network
Five Terms You Should Know
About Loans!
Before you graduate, you should
understand these five important
terms about your student loans.
Read more
Imagine America Foundation • 1101 Connecticut Ave., N.W., Ste. 901 Washington, DC 20036
P: 202.336.6800 • www.imagine-america.org
Scholarship, Scholarships, and More Scholarships!
F
inding scholarships and resources can be a time consuming task. But it’s worth it! Scholarships and grants
can help alleviate college expenses. The cost of a higher
education can be daunting for some students; however it
should never prevent a student from getting an education.
Many adult students, military personnel, parents and their
high school students are trying to figure out how they’ll
afford college expenses. Before resorting to student loans,
students should seriously research scholarships and grants
opportunities. There are thousands of scholarships and
awards out there for all ages and levels of education. Let
the research begin!
Internet Research
One way to find scholarships and grants is to perform
some online research. Most of the online scholarship
search engines will require you to register for the site. In
some cases, during the
registration process the
sites will ask you many
questions and this may
take time. This is done
to filter the scholarships
that will be specific
to you. So fill out the
information completely
and in detail. There are
numerous scholarship
search engines out there,
but be aware: if a site
asks you to pay a fee, it
may be a scam.
Some of the top free
scholarship search engine sites are www.fastweb.com
and www.scholarships.com. Scholarships listed on these
sites serve the general population of students by helping them find grants based on a wide variety of factors
such as personal interests, abilities, hobbies, activities and
involvement in various organizations and, yes, also military
involvement. Sites that cater specifically to military are
www.military.com, www.moaa.org/education, and www.
finaid.org/military/.
High School Counselors/Colleges
If you don’t know where to start, you can always get help
from a high school guidance counselor or financial aid
advisor at the college the student plans to attend. For high
school students, guidance offices will have a list of scholarships either on a bulletin board or even on the school’s
website. Additionally, if you need help applying for scholarships many guidance counselors will help you put together
the information you need such as a resume or essay. Making
an appointment with your guidance counselors to discuss
financial aid can never hurt.
Need more help? Make an appointment with a financial
aid advisor at the college you plan to attend. Financial aid
is their job; they will be able to answer most of your questions and can be a great resource for finding scholarships. Be
sure to ask if the college you are attending has any in-house
scholarships for which you may be eligible.
Community
Many public libraries will compile a list of scholarships available in your region and have
librarians willing to help you
with the search. Also, local
organizations often support
students by offering scholarships
and awards. It is a good idea
to check with your employer,
a parent’s employer, or other
organizations you have experience with. If you volunteer with
an organization, be sure to check
with them, too. When you are
talking to organizations, it is good to have a resume on hand,
along with a clear outline of your educational goals!
Some career college state associations offer scholarships. A
list of state associations can be found HERE.
Imagine America Foundation • 1101 Connecticut Ave., N.W., Ste. 901 Washington, DC 20036
P: 202.336.6800 • www.imagine-america.org
Helping You Understand Federal Financial Aid.
Finally, don’t forget the Imagine America Scholarship and
Award programs for students attending participating
career colleges!
Imagine America for graduating high school seniors.
Military Award Program (MAP) for military personnel.
Adult Skills Education Program (ASEP) for adult students
age 19 and above.
Find more information about the Imagine America Foundation at www.imagine-america.org.
Helping You Understand
Federal Financial Aid.
D
uring these hard times, people are looking toward the
future. For many this includes seeking a higher education. Unfortunately, the cost of a higher education continues to rise, which means many individuals and families are
becoming increasingly reliant on financial aid.
There are several options that can help fund your higher education. During the 2008-2009 academic year, $168 billion in
grants from all sources, federal loans, federal work-study assistance, and federal tax credits and deductions was available
through financial aid, according to the College Board
First, students should apply for scholarships and grants
since they do not have to be paid back. Another option
for students is federal loans; remember these must be paid
back! The two most common federal loans are the Perkins
and Stafford. With the exception of scholarships and some
grants, in order to receive federal financial aid a Free Application for Federal Student Aid (FAFSA) must be completed by
the student.
Free Application for Federal Student Aid (FAFSA):
A FAFSA application must be completed in order to receive
federal financial aid, or to apply aid from other sources such
as your state or school. You will need your social security
number, driver’s license (if any), W-2s, tax returns, and bank
statements among other documents. When you fill out the
FAFSA application, it will determine if you are dependent or
independent. If you are considered dependent you will need
your parent’s information. Independent students will need
their own information.
Be sure to check with your high school guidance counselor or financial aid administrator regarding the application deadlines.
After your FAFSA application has been processed you
and the schools you listed on your application will be
sent a Student Aid Report (SAR). This report will show
your Expected Family Contribution (EFC), or how much
money you and/or your family is expected to contribute
to your college education. EFC is usually determined
by income, assets, number of college-age students, and
household size among other factors. The school(s) you
have selected to receive your SAR information will review this information and determine what financial aid
you are eligible for. You will receive notification of your
award from the school(s) in the form of an award letter.
This will list your financial aid package. You do not have
to accept the entire financial aid package. You should
only accept the amount of money you absolutely need
for school expenses.
GRANTS DO NOT HAVE TO BE REPAID
Academic Competitiveness Grant (ACG)
ACG grants are for first or second year undergraduate
students who have successfully completed a rigorous
high school program of study after January 1, 2006
(January 1, 2005 if you are a second-year student).
Each calendar year, a list of rigorous secondary school
programs of study is published (http://www2.ed.gov/
admins/finaid/about/ac-smart/state-programs.html).
First year students are eligible to receive up to $750 and
second year students $1,300. Students must complete
a FAFSA to be eligible.
Federal Pell Grant
Pell Grants are usually awarded to low-income undergraduate students and do not have to be repaid. Completing your FAFSA application will determine if you
are eligible for the Pell Grant. Amounts are determined
by the students financial need, cost to attend school,
full-time or part-time status, and whether the student
attends for a full academic year or less.
Imagine America Foundation • 1101 Connecticut Ave., N.W., Ste. 901 Washington, DC 20036
P: 202.336.6800 • www.imagine-america.org
Helping You Understand Federal Financial Aid.
Teacher Education Assistance for College and
Higher Education (TEACH) Grant Program
TEACH Grants are for students who agree to serve as a
full-time teacher in a high-need field in public or private
elementary or secondary schools that serve low-income
students. These grants provide up to $4,000 per year. If
the student fails to complete the obligation, the total
amount of grants recieved will be converted into Federal
Direct Unsubsidized Stafford Loans.
To receive a TEACH Grant you must meet the following
criteria:
• Complete the FAFSA
• Be a U.S. citizen or eligible non-citizen.
• Be enrolled as an undergraduate, post-baccalaureate, or
graduate student in a postsecondary educational institution that has chosen to participate in the TEACH Grant
Program.
• Be enrolled in coursework that is necessary to begin a
career in teaching or plan to complete such coursework.
• Meet certain academic achievement requirements
• Sign a TEACH Grant Agreement to Serve
For more information see, http://studentaid.ed.gov/PORTALSWebApp/students/english/TEACH.jsp
Federal Supplemental Educational Opportunity
Grant (FSEOG)
FSEOG Grants are need-based grants to low-income
undergraduate students. Priority is given to students with
exceptional financial need and those who have received
the Pell Grant. Completing your FAFSA application will
determine if you are eligible for the FSEOG Grant.
The National Science & Mathematics Access to Retain Talent Grant (National SMART Grant)
Additional information on grants can be found at http://
studentaid.ed.gov/PORTALSWebApp/students/english/
grants.jsp
FEDERAL WORK STUDY
Federal Work Study (FWS) provides part-time jobs for
undergraduate and graduate students with financial need.
The school you attend must participate in the FWS
program in order for you to be eligible. The student
will be given a total award amount that they may not
exceed. Students are paid by the hour and the school
normally pays you directly at least once a month. For
more information of FWS contact your college financial
aid department.
FEDERAL LOANS: MUST BE PAID BACK.
Federal Perkins Loan
The Perkins Loan is a low-interest loan available to
undergraduate and graduate students with exceptional
financial need. The student will need to complete
a FAFSA application to determine eligibility for the
Perkins Loan. The amount of the loan is determined
by your college’s financial aid office, usually based on
those with the most financial need. The Perkins Loan is
the best student loan due to its low interest and the interest is paid by the federal government during school
and the 9-month grace period. The repayment period
is 10 years.
Federal Stafford Loan
Stafford Loans are fixed interest rate loans for undergraduate and graduate students attending college at
least half-time. The student will need to complete a
FAFSA application to determine eligibility. The major
benefit of the Stafford Loan is the fixed interest rate,
which means the loan’s interest rate will remain the
same for the entire term of the loan. Another benefit
of the Stafford Loan is that it is not based on financial
need.
Subsidized Stafford Loan
Subsidized loans are low fixed interest rate loans that
do not require payments while you are enrolled in
school, are not based on financial need, and accrue no
interest while you are enrolled.
Unsubsidized Stafford Loan
Unsubsidized loans are fixed interest rate loans, no
payments are required while enrolled, and they are not
based on financial need. However, unsubsidized loans
start accruing interest after the loan is disbursed to the
school. You do not have to pay the interest while in
school. If you choose not to pay interest while enrolled
it will still accrue on the loan, which will increase the
total loan amount after you graduate. It is best to pay
the interest while in school to save money.
Imagine America Foundation • 1101 Connecticut Ave., N.W., Ste. 901 Washington, DC 20036
P: 202.336.6800 • www.imagine-america.org
All About Federal Financial Aid Programs - Table
GRANTS
Name of Program
Description
Annual Amount
Repayment
Academic
Competitiveness Grant
(ACG)
A monetary grant for
students in their first or
second academic year.
First-year students must
have completed high
school on or after Jan. 1,
2006. Second-year students must have completed high school on or after
January 1, 2005.
Up to $750 for first year.
Up to $1,300 for second
year.
None
The maximum Pell
Grant for 2010-11 award
year is $5,000.
None
Teacher Education
Assistance for College
and Higher Education
(TEACH) Grants
A monetary grant
awarded to students
who intend to teach in a
public or private elementary or secondary
school that serves students from low-income
familes.
Up to $4,000
per a year.
None
Federal Supplemental
Educational Opportunity Grant (FSEOG)
A monetary grant for
undergraduates with
exceptional
financial need.
The range for this grant
is $100 - $4,000 a year.
None
The National Science &
Mathematics
Access to Retain Talent
Grant (National SMART
Grant)
A monetary grant available during the third
and fourth years of undergraduate study to at
least half-time students
majoring in physical life
or computer sciences;
mathematics, technology, or engineering; or
in a foreign language
determined critical to
national security.
Up to $4,000 for each
of the third and fourth
years of undergraduate study. The SMART
Grant when combined
with a Pell Grant may
not exceed the
student’s cost of
attendance.
None
Federal Pell Grant
Federal Work Study
(FWS)
A monetary grant for undergraduates and certain
post-baccalaureates with
exceptional financial
need.
Allows students to work
part-time to earn money
for education expenses.
Eligibility based on
financial need.
Earnings are at least minimum wage but may be
more.
Imagine America Foundation • 1101 Connecticut Ave., N.W., Ste. 901 Washington, DC 20036
P: 202.336.6800 • www.imagine-america.org
None
All About Federal Financial Aid Programs - Table
LOANS
Name of Program
Description
Federal Perkins Loan
A low-interest, 5% federal student loan with
the college serving as
the lender. Principal
and interest charges
deferred while enrolled
at least half-time. Eligibility based on financial
need.
Federal Stafford Loan
(Subsidized)
Federal loans made
available to student
regardless of credit with
a fixed interest rate of
4.5% for the 2010-11
award year. Subsidized
loans are based on
financial need, and the
U.S. Department of Education pays the interest
accrued on the loan
while in school.
Federal Stafford Loan
(Unsubsidized)
Federal PLUS Loan
(Parent Loan for
Undergraduate Students)
Federal loans made
available to student
regardless of credit
with a fixed interest
rate of 6.8%. Subsidized
loans are not based on
financial need.
Loan to borrower on
behalf of dependent
student to help pay for
education expenses.
Student must be enrolled
at least half-time and the
borrower must pass a
credit check.
Annual Amount
Repayment
Up to $5,500 per year
for undergraduate
study, not to exceed
$27,500. Up to $8,000
per year for graduates.
Repayment begins
nine months after the
student graduates, falls
below half-time, or
leaves college. A standard repayment may
run up to 10 years.
Full-time dependent
and independent undergraduate: first year
up to $3,500, second
year up to $4,500,
thereafter up to $5,500
- must be enrolled in a
program of study that
is at least a full academic year.
Repayment of the principal begins six months
after graduating, leaving school, or whenever
enrollment drops below
half-time. A standard
repyment may run up to
10 years.
Full-time dependent
undergraduate first
and second year up to
$2,000, thereafter up to
$2,000.
Full-time independent
undergraduate: first
and second year up
to $6,000, thereafter
up to $7,000. (Must be
enrolled in a program
of study that is a full
academic year.)
May borrow up to the
difference between college cost minus estimated financial assistance.
Repayment of the principal begins six months
after graduating, leaving school, or whenever
enrollment drops below
half-time. A standard
repayment may run up to
10 years.
Borrower can begin
repayment 60 days
after the loan or wait six
months after the dependent student ceases to
be enrolled on at least a
half-time basis
Imagine America Foundation • 1101 Connecticut Ave., N.W., Ste. 901 Washington, DC 20036
P: 202.336.6800 • www.imagine-america.org
What are Your Repayment Options?
Income Based Repayment (IBR)
This new repayment plan caps the amount that is intendhalf-time you will need to start thinking about what repay- ed to be affordable based on income and family size. If
ment plan will work for you. It is important to watch for
your student loan debt is high relative to your income and
information from your lender that specifies your repayfamily size, you may be eligible for the income-based rement options and your start date for repayment. You will payment plan. You can use the IBR calculator to determine
have several repayment plans to choose from. It is impor- your eligibility.
tant to choose the right repayment plan for your budget
because if you are not able to make your loan repayments Some of the benefits of IBR include, if the interest on Subyou could go in to default, which has very serious consesidized Stafford Loans is not fully covered by your monthly
quences.
IBR payment the remaining balance will be paid by the
After you have graduated, left school, or dropped below
The main repayment options for Federal Student Loans are:
Standard Repayment
The standard repayment
plan is the most common
and economical plan for
borrowers. The borrower will pay a fixed
monthly payment for
the term of the loan,
which is usually 10
years. With the standard
repayment plan your
monthly payment may be
higher than other repayment
options, but overall you will pay
less because less interest will accrue.
Extended Repayment
If you are unable to choose the standard repayment, another choice would be the extended repayment plan. This
plan will lower your monthly payments by extending the
term of your loan not to exceed 25 years. However, with
the extended repayment plan you must have more than
$30,000 in outstanding Direct Loans (subsidized, unsubsidized, and Plus loans). This plan will give you a more
manageable bill, but by extending the term of your loan
you will accrue more interest, making your total loan more
in the long run.
government for 3 consecutive years. If you meet certain
requirements and have been repaying
the loan for 25 years under IBR, the
remaining balance will be cancelled. For those who choose
to work in public service,
your remaining balance
after 10 years in a public
service job could be
cancelled if you made
loan payments for
each month of those
ten years.
Income-Contingent Repayment (ICR)
For students seeking jobs with
lower salaries such as public service,
the Income Contingent Repayment plan may
be for you. The monthly payment is based on the borrower’s income, family size and total loan amount. This plan
is only available from the U.S. Department of Education
and you must have a Federal direct loan. The maximum
repayment period is 25 years. After 25 years the remaining
balance of the loan is forgiven. The interest rate is fixed
for the term of the loan and is based on the weighted average of the interest rates of the loans.
Note: Effective July 1, 2010, loans are no longer made under the Federal Family Education Loan (FFEL) Program. All
new loans are being made under the Direct Loan program.
The main difference between the programs is with the
lending service. With the FFEL Program, the lender could
be a private lender. With the Direct Loan Program, the
lender is the U.S. Department of Education.
Graduated Repayment
Often after you graduate, your salary will be lower and
steadily increase. If this is the case, then the graduated
repayment plan may be an option for you. The graduated
repayment plan starts out with low monthly payments and
over time, every two years, those payments increase. The
For more information on student loan repayment options
loan term can be from 10 to 30 years. Again with this plan visit, http://studentaid.ed.gov/PORTALSWebApp/students/
the longer the term the more interest will accrue, increas- english/OtherFormsOfRepay.jsp
ing the total amount of your loan.
Imagine America Foundation • 1101 Connecticut Ave., N.W., Ste. 901 Washington, DC 20036
P: 202.336.6800 • www.imagine-america.org
Five Terms You Should Know About Loans!
Before you graduate you should understand these five
With subsidized Stafford Loans and the Federal Perkins
Loan, interest does not accrue. However, for unsubsidized
or FFEL Stafford Loans, interest does accrue and you are
responsible for payment.
1) Grace Period
You must continue to make payments on your student
loans until you are approved for a deferment. If you do
not your loan could go into default, which will negatively
affect your credit.
important terms about your student loans.
Grace period is the time period between when a student
leaves school and before they have to start making payments on their loans. Grace period starts once the student
has graduated, drops below half-time enrollment or leaves
school. Common grace periods are six to nine months. To
find out your terms, you will
need to check your promissory
note.
3) Forbearance
If you are not eligible for a deferment
and experiencing financial difficulty,
you could be eligible for forbearance.
Forbearance is a temporary postponement or reduction in payments for a
period of time. Unlike a deferment, with
forbearance interest on both subsidized
and unsubsidized accrues and you are
responsible for paying it. As with deferment you must contact the lender and
apply for forbearance. All payments
must be made until your have been
granted the forbearance.
Stafford Loans, subsidized and
unsubsidized have a six-month
grace period and Perkins Loans
have nine months. With subsidized loans, the government
pays for interested accrued
during school and during the
grace period. Unsubsidized
loans accrue interest during
these times and the borrower
is responsible for payment.
Borrowers should know the grace period for each loan
taken. If you do not know the grace period, contact the
lender or a financial aid advisor at your school for help.
Also borrowers can go to the National Student Loan Data
System (NSLDS) to access the student information website.
NSLDS provides information on your federal loans including loan types, disbursed amounts, outstanding principal
and interest, and the total amount of all your loans. http://
www.nslds.ed.gov/nslds_SA/
Remember, failure to make payments on your student
loans will negatively impact your credit.
2) Deferment
4) Default
When a borrower has not made a payment on their student loans for 270-360 days, the loan(s) are considered in
default. You are responsible for repaying student loans
even if you have not finished school or are unemployed.
Additionally, most student loans will not be discharged
through bankruptcy.
If you loan is in default you are no longer eligible for deferment or forbearance. Once a loan is in default several
negative things may happen:
•
•
If the borrower is experiencing economic hardship, unemployment, or reenrolling in school, they may be eligible for
a deferment.
For borrowers who are having trouble with repayment of
their student loans, a deferment can temporary suspend
loan payments. Before you miss a payment the borrower
should contact the lender and inquire about obtaining a
deferment.
•
The IRS can intercept any income tax refund you may
be entitled to until your student loans are paid.
Your paycheck may be garnished, meaning the government can take a portion of your wages to apply to
your student loans. The government can require your
employer to forward 15% of your disposable income
to be applied to your loans.
The government can take your federal benefits such
as Social Security as payment for your loans. It cannot
take more than 15% of your total benefits.
Imagine America Foundation • 1101 Connecticut Ave., N.W., Ste. 901 Washington, DC 20036
P: 202.336.6800 • www.imagine-america.org
Five Terms Your Should Know About Loans!
•
•
•
Defaulted loans will appear on your credit history for
seven years. This will make it difficult to get loans in
the future when you are buying a house or car.
Legal action can be taken against you. You can be
sued by the government or private lenders for the
total amount of your loan.
Your loans can be turned over to a collection agency
and you may be responsible for the collection
cost.
You should take every step not to
default on your loans. If you are in
default, contact your lender and
see if you can arrange a repayment plan right away. If the
lender has sent your loan to a
collection agency, contact the
collection agency to see if you
can arrange a repayment plan.
Again this must be done right
away.
Are you able to make your current monthly payments?
Consolidating your loans may lower your overall monthly
payment, however it will increase the time of your loan.
You will end up paying more monthly payments and interest.
If you are having a hard time repaying your loans, this is
an option to prevent you from defaulting. You should
compare your currently monthly payment to the
consolidation lenders you are researching.
Also look into their repayment plans to
see if one will work with your current
budget.
Are having a hard time keeping
track of the different lenders and
loans?
If so, consolidation will combine
all loans into one single monthly
payment with one lender.
Do you have variable interest rates
on your loans? When consolidating your
student loans, the interest rate is based on the
This allows the borrower to combine several
weighted
average
interest rate of all loans being consolistudent loans into one loan with a single lender. Once you
dated.
This
interest
rate is fixed for life with consolidation.
consolidate your loans they cannot be removed, therefore
it is important to research your options before consoliIf the borrower is able to make the current monthly paydation. To determine if consolidation is a good option,
ments, consolidation may not be right for you. Consolidatconsider your response to the following questions:
ing your loan may lower your monthly payment, however,
this is usually done by increasing the lifetime of your loan.
If you choose to do this you may end up paying more in
the long run through the accrued interest.
5) Direct Consolidation Loan
About the Imagine America Foundation
The Imagine America Foundation (IAF), established in 1982, is a not-for-profit organization dedicated
to providing scholarships for education, research and training support for the career college sector.
Since its inception, the Foundation has provided over $50 million in scholarship and award support for graduating high school seniors, adult learners and U.S. military personnel attending career
colleges nationwide through its award-winning Imagine America® programs. The Foundation also
publishes vital research publications for the higher education sector, honors achievement in career
education and offers faculty development training. For more information about the Imagine America
Foundation’s programs, please visit www.imagine-america.org.
Imagine America Foundation • 1101 Connecticut Ave., N.W., Ste. 901 Washington, DC 20036
P: 202.336.6800 • www.imagine-america.org