Consumer Ed

Introduction

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Students who graduate with their GED® have a lot of options. Some cost more than others. The good news is that some type of financial aid is available to most students.

The most desirable forms of financial aid are scholarships and grants, which are essentially "free money"-funds given to students for college that don't have to be paid back.

Scholarships:

These are generally awarded for merit in academics, athletics, or a particular field of study. Some are based on past performance (like a student doing incredibly well on the PSAT), and some are based on future performance (like a talented drummer joining the college marching band). More specific private scholarships can be given based on anything from artistic abilities to ethnic background to religious affiliation.

The funds awarded vary greatly from one scholarship to the next, and it requires some investigative work on the student's part to seek out appropriate resources. The Internet is a good place to start searching. There are a variety of web sites like www.fastweb.com or www.petersons.com that have searchable listings. High school guidance offices, university financial aid offices, community organizations and private business are also worth looking into for scholarship opportunities.

Grants:

A whopping 90 percent of financial aid comes from the federal government, and part of that is awarded in grants-another form of financial aid you don't have to repay. By filling out the Free Application for Federal Student Aid (FAFSA), you'll immediately be considered for grant eligibility. Here are some widely used grant programs:

• FAFSA (Free Application For Student Aid) -- First and foremost, this is the application for all kinds of aid available to students in the public forum. http://www.fafsa.ed.gov/This link will open in a separate browser window
• Pell Grant - The Pell is the nation's largest grant program, and it can be used at any school. This is a need-based grant and the maximum award amount is just over $4,000 per year. All eligible students will automatically receive the amounts for which they qualify.
• SEOG - This is a need-based award that can cover a large amount of the cost of tuition for those who qualify.

Self-Help

Other forms of financial aid are the "self-help," such as loans and work-study. Since most everyone qualifies for some version of these types of aid, they're usually good options for students who aren't eligible for grants or scholarships.

Loans:

Loans make up about 65 percent of all financial aid each year and there are plans to fit virtually every need. Of course, loans must be paid back, but they are a great way to finance an education that you might not otherwise be able to afford. You'll find out which ones you may be eligible for by filling out the FAFSA. Here are a few of the most popular loan programs:

• Subsidized Stafford Loan - This is a subsidized federal loan for students with need. The biggest advantage of this loan is that the government pays the interest on the loan while the student is in school, which saves a nice chunk of change in the long run.
• Unsubsidized Stafford Loan - With this version of the Stafford loan interest does accumulate while the student is in school. Also, it's not need-based, so anyone is eligible. Even though the interest rate is low, the student is responsible for all those charges. Repayment can be deferred until after graduation on both types of Stafford loans, and they both provide flexible cancellation provisions.
• Perkins Loan - The school itself is the lender for this fixed-interest, need-based federal student loan. Both undergraduate and graduate students are eligible, the only drawback is that there are fewer funds to go around for the Perkins loan than the Stafford loans.
• PLUS Loan - This is a non-need-based loan for parents that comes from the federal government and is capped only by the cost of education. That means that parents can borrow enough money to cover all tuition and fees for any school in the country. The interest rate is very low, but it does start accumulating immediately. Basically, even if you qualify for nothing else, you can still get a PLUS loan, as long as you don't have bad credit.
• Alternative/Private Loans - There are a wide variety of alternative and private loans that should fit virtually any circumstances. From state-managed plans like the College Access Loan to loans from private lenders, these are helpful for bridging aid gaps or for paying for unusual programs like studying abroad. These will have higher interest rates than the government plans, so looking into getting a PLUS loan first is usually a good idea.

Work-Study:

The Federal Work-Study Program provides jobs (usually on campus) for students with financial need, allowing them to work part-time and earn money to help cover college costs. The best thing about participating in work-study is that employers know that their employees are students first, which means work doesn't get in the way of school. Studies have even found that students who work on campus generally have better GPAs and graduate at a higher percentage.

There's no way to know which type of financial aid works best for you until you apply. So the earlier you fill out the FAFSA, the better. FAFSA application starts January 1st of your GED® completion year).